Coronation’s third quarter market outlook has recently been published and can be found on our website, www.investonline.co.za. We have summarised it below for your convenience. We rate Coronation as the top fundamental research asset manager and hence give their outlook for markets special attention.
Coronation – House View Outlook
- Interest rates – most indicators support that rates have bottomed. This is our core view. The main risk comes from the continued weakening US dollar and its potential effects on lower inflation leading to another cut.
- Inflation – is troughing and should start moving up. The Rand remains the key risk for the inflation outlook.
- Rand – there is support for the Rand while global interest rates remain low. However, we believe the Rand is overvalued and expect some depreciation in the meduim-term.
- Equity Markets – we continue to believe that global equities are more attractive than local. We overweight banks and industrial rand-hedges and underweight resources.
- Global Markets – we expect volatility to continue as the global economy slowly recovers. We continue to believe the outlook for equities is very positive.
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