Share

JSE: Over-cooked or room to run?

Johannesburg – With investors shaking off the excesses of Christmas 2010, they now face the daunting decision of whether to put more money into global equity markets.

A look at recent full-year results out from JSE Foord Compass Debentures tells an interesting story which is relevant to investors trying to position their portfolios going into 2011.

Widely acknowledged as having some of South Africa's most consistent investment managers, the listed Foord Compass [JSE:FCPD] investment vehicle finished the year off with 95% exposure to equities - indicating a pretty bullish stance coming into the new year.

The Foord Compass debenture has delivered a total return of 13.4% per annum (over the past year), 11.9% (three years) and 13.2% (five years). Its target is to deliver a return of consumer price index + 10% over a rolling five-year period.

A look at its top five JSE-listed shareholdings makes for interesting reading. Resource heavyweight Anglo American [JSE:AGL] leads the pack, followed by property plays Redefine  and Capital Shopping Centres, retailer Foschini [JSE:FOS] and furniture conglomerate Steinhoff International Holdings [JSE:SHF].

Redefine and Anglo American are probably no surprises, but the other three are interesting stock picks considering the state of the global consumer.

Steinhoff in particular looks like a bold pick. The share has risen from around R17.30 in July 2010 to touch a high of R24.50 in December. This is not far off the levels it was trading at in February 2007, when the bull market was in full swing.

The question on the mind of all investors is whether equity markets are over-cooked and what kind of strategies to adopt in the current climate. Perhaps this is best answered by the commentary coming out of the Foord team.
 
“Interest rates are likely to remain low to assist those developed countries where debt levels are excessively high and problematic. These factors, together with strong corporate balance sheets and cash flows, should allow profits to continue growing, which should lead to higher dividends, hence our high allocation to equities.”

Given Foord’s track record, this could help set set your mind at ease as you map out your investment strategy in 2011.

- Fin24
We live in a world where facts and fiction get blurred
Who we choose to trust can have a profound impact on our lives. Join thousands of devoted South Africans who look to News24 to bring them news they can trust every day. As we celebrate 25 years, become a News24 subscriber as we strive to keep you informed, inspired and empowered.
Join News24 today
heading
description
username
Show Comments ()
Rand - Dollar
19.00
-0.5%
Rand - Pound
24.02
-0.5%
Rand - Euro
20.53
-0.3%
Rand - Aus dollar
12.37
-0.2%
Rand - Yen
0.13
-0.6%
Platinum
904.37
+0.8%
Palladium
1,014.65
+1.3%
Gold
2,205.79
+0.5%
Silver
24.61
-0.1%
Brent Crude
86.09
-0.2%
Top 40
68,281
+0.9%
All Share
74,458
+0.7%
Resource 10
57,014
+2.4%
Industrial 25
103,960
+0.7%
Financial 15
16,486
-0.2%
All JSE data delayed by at least 15 minutes Iress logo
Company Snapshot
Editorial feedback and complaints

Contact the public editor with feedback for our journalists, complaints, queries or suggestions about articles on News24.

LEARN MORE
Government tenders

Find public sector tender opportunities in South Africa here.

Government tenders
This portal provides access to information on all tenders made by all public sector organisations in all spheres of government.
Browse tenders