SEVEN VI­TAL IN­VEST­MENT CALLS

Weekend Argus (Saturday Edition) - - PERSONALFINANCE -

South African in­vest­ment man­agers have to make seven big in­vest­ment calls, of which they will need to get at least four right to earn sound re­turns in the years ahead, Karl Lein­berger, the chief in­vest­ment of­fi­cer of Corona­tion Fund Man­agers, says. The calls are:

1. Whether to buy or sell com­modi­ties. The out­look for com­modi­ties is poor be­cause of over-sup­ply, the de­cline in de­mand from China and the threat posed by re­new­able en­ergy. The slump could per­sist for some time, but de­mand, and hence prices, will in­crease at some point.

2. Whether deep-level plat­inum and gold mines have value or are a value trap.

3. Whether to buy or sell rand-hedge stocks listed on the JSE.

4. Whether China will have a hard or a soft land­ing as it moves from an in­fra­struc­ture-led econ­omy to a con­sumer­based one.

5. The fu­ture of plat­inum. The move to elec­tric cars will re­move the need for cat­alytic con­vert­ers, which have sus­tained plat­inum prices.

6. Whether to buy the cur­rently cheap shares of pro­duc­ers such as steel man­u­fac­turer ArcelorMit­tal, alu­minium pro­ducer Hu­lamin and chem­i­cals pro­ducer AECI, which may re­cover at a fu­ture date.

7. Get­ting the big stocks right. This in­cludes Naspers, Richemont, BHP Bil­li­ton and SABMiller, which can all be af­fected by the global econ­omy and un­cer­tainty.

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