Finweek English Edition - - INVESTMENT -

With the JSE All Share In­dex re­turn­ing a palat­able 21.4% for 2013, al­beit lower than the 26.7% for 2012, an­a­lysts have warned in­vestors to tame their re­turn ex­pec­ta­tions go­ing for­ward.

Sil­ver­man says that the next five years could be very tough for lo­cal mar­kets – val­u­a­tions are high, and off these lev­els, fu­ture re­turns have tended to be low.

He adds that an even weaker than ex­pected rand, though, could mit­i­gate the weak­ness, en­sur­ing a more flat All Share per­for­mance, rather than a sharp fall.

Vint­cent says for South Africa to turn this cor­ner, the coun­try needs a stronger pro­duc­tive el­e­ment – ei­ther from the min­ing or con­struc­tion sec­tors. He says the growth cat­a­lyst that needs to be un­locked is the coun­try’s multi­bil­lion-rand in­fra­struc­ture de­vel­op­ment roll-out. The de­tails of the roll-out are ex­pected to be re­vealed by fi­nance min­is­ter Pravin Gord­han when he ta­bles his 2014 Bud­get Speech on 26 Fe­bru­ary.

It seems, there­fore, that cau­tion and fo­cus on val­u­a­tions and qual­ity of as­sets should be top of mind for in­vestors, whether or not one is a buyer of de­fen­sive stocks.

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