SPECIAL PROJECTS

SALES REPRESENTATIVE: ELMARIEMARTIN

WRITER: ALF JAMES crease.

“From a South African perspective, much of the country is effectively located in semi-desert regions.

“This means that companies not geared to either efficient water usage or from an ESG perspective will suffer negative consequences. From a positive perspective exposure to new technologies and distribution ( piping) will benefit certain quarters,” says Mayet. Tony Bell, CIO, VUNANI FUND MANAGERS says investors need to shift their focus to identifying and incorporating sources of growth (earnings power) from around the world that may well be influenced by these macro themes. While Africa may be the most popular “frontier” market right now the dynamics shaping the US and China could lead to some very impressive growth numbers over the next 25 years.

America is in serious need of infrastructure upgrades, more high tech manufacturing facilities and more research and development into areas such as food production, clean energy and recycling.

Companies in the US have repositioned themselves for the next 15 years by focusing on labour cost and productivity as well as improved competitiveness lost to China over the last 15 years.

“We see America offering strong investment growth opportunities as companies benefit from this macro trend. Ironically China has a very steep hill to climb. Its SOEs are bloated, corrupt and very inefficient with little flexibility in the banking system and credit markets.

“Liberalisation will unlock value but the process will be painful and slow. China is at an inflection point – from an investment perspective we see the opportunity through companies doing business in China – not Chinese companies (other than a select few).

“China’s great policy restructure is Africa’s opportunity (as it will take time and involve many setbacks). Will policymakers in Africa see this?” Matthew Warren, head of financials and retailers at FIRST AVENUE INVESTMENT MANAGEMENT says the lack of bargaining power on the part of many global workers can be of benefit to shareholders that pay less for this input.

However, as Henry Ford realized long ago, it can become difficult for companies if workers can no longer afford to buy the products they are selling.

In the meantime, companies that cater to the high end (owners of capital) and the low end (labourers) tend to do much better than those serving the middle class, specifically in high cost countries.