Offshore equities in investors’ sights
Offshore equities and property stocks are gaining in popularity among South Africans as investment choices due to lack of investor confidence, low growth and credit rating downgrades in the local economy.
Offshore equities and property stocks are gaining in popularity among South Africans as investment choices due to lack of investor confidence, low growth and credit rating downgrades in the local economy.
One good buy would be US multinational General Electric (GE), says Cratos Wealth’s senior analyst, Ron Klipin.
“This diversified investment holding company has been reinventing its business model over the past few years. This began with the sale of its financial services division, GE Capital, which required substantial capital in terms of the [US] Federal Reserve’s banking regulations.
“In addition, other noncore, low-yielding assets were also sold, with capital recycled into acquisitions such as French group Alstom’s power division. This enabled GE to build up critical mass in this area, as well as enlarge its global footprint. The recently announced deal, to acquire Baker Hughes, a manufacturer of oil and gas capital equipment, should complement the company’s operations.”
Smart technology was a major growth area, according to Klipin. GE could collect and analyse data, thereby monitoring the efficiency of capital equipment performance.
GE operates in both developed and emerging markets, giving it a good geographic footprint, as well as a diversified range of products and services.
Even though its share price has been lacklustre, having underperformed the S&P 500 index over the past year, new leadership, underpinned by an attractive 3.50% dividend yield, should lead to capital growth during 2017 and 2018.
Technology stocks aside, industrial property groups are promising attractive returns.
Stanlib head of listed pro perty funds Keillen Ndlovu said as far as offshore real estate was concerned, logistics stocks stood as offering the best value.
ONE OF THE STRONGEST SECTORS RIGHT NOW IS INDUSTRIAL, PARTICULARLY LOGISTICS
“One of the strongest sectors right now is industrial, particularly logistics, which is mostly related to e-commerce.
“The biggest player in this place is the US-based Prologis. Londonmetric as well as Segro, both from the UK, are also nicely positioned in the industrial or logistics space. We like to have exposure to quality, defensive and dominant properties,” Ndlovu said.