SEVEN VITAL INVESTMENT CALLS

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.