Resources in demand

2011-02-05 00:00

SELECTED equities in South Africa and the developed world could offer investors better returns than other asset classes in 2011.

This is according to Gail Daniel, portfolio manager at Investec Asset Management, who addressed guests at a briefing in Durban this week. Daniel noted that they are fundamentally bullish on equities, adding that this view applies primarily to certain resources stocks, United States equities such as U.S. banks, as well as certain South African equities.

She said that the world saw a collapse in the supply of resources after the 2008 financial crisis. Daniel said emerging markets continue to show a healthy demand for resources.

“There is a deficit in a lot of commodity markets. Prices are rising … and Chinese steel inventories are low.”

Having made a compelling case for equities, she added: “We think that equities are going to grind higher. There are pockets of excitement. It’s going to be expensive sitting in cash.”

Much has been said about the fate of the U.S. consumer in recent months. Daniel believes that they will recover in the near future.

“U.S. growth is expected to continue. U.S. consumers are paying off debt. Job growth is coming through and they will resume spending. U.S. corporates are profitable and the payroll numbers are expected to be on the up.”

She believes that U.S. banks will perform well once the U.S. consumer recovers. Consumers will begin to demand loans on the back of big-ticket purchases such as new vehicles and houses.

She added that South African equities valuations look good relative to other asset classes and she anticipates returns in the “mid-teens” this year.

Stocks of interest to Daniel include Rand Merchant Bank, Sasol, SABMiller, Anglo American, JP Morgan, BHP Billiton, Barloworld and Santam.

Join the conversation!

24.com encourages commentary submitted via MyNews24. Contributions of 200 words or more will be considered for publication.

We reserve editorial discretion to decide what will be published.
Read our comments policy for guidelines on contributions.

24.com publishes all comments posted on articles provided that they adhere to our Comments Policy. Should you wish to report a comment for editorial review, please do so by clicking the 'Report Comment' button to the right of each comment.

Comment on this story
0 comments
Comments have been closed for this article.

Inside News24

 
/News

Book flights

Compare, Book, Fly

Traffic Alerts
Traffic
There are new stories on the homepage. Click here to see them.
 
English
Afrikaans
isiZulu

Hello 

Create Profile

Creating your profile will enable you to submit photos and stories to get published on News24.


Please provide a username for your profile page:

This username must be unique, cannot be edited and will be used in the URL to your profile page across the entire 24.com network.

Settings

Location Settings

News24 allows you to edit the display of certain components based on a location. If you wish to personalise the page based on your preferences, please select a location for each component and click "Submit" in order for the changes to take affect.




Facebook Sign-In

Hi News addict,

Join the News24 Community to be involved in breaking the news.

Log in with Facebook to comment and personalise news, weather and listings.