VENTURES AFRICA – South Africa’s dual-listed companies were poised for “decent real returns” as long as China continued to churn positive economic data, Business Day SA reported on Monday, citing leading analysts.
South Africa’s biggest business daily said these analysts’ comments came as the JSE reached yet another milestone on Friday.
Africa’s biggest bourse and among the world’s top 10 biggest bourses nudged closer to 41.000 points on the back a brighter outlook on economic growth for the US and China. This set of news has raised investor appetite for riskier assets such as equities.
On Friday, the JSE all-share index closed 0.49 percent higher at a record 40.892 points, led by resources counters, Business Day reported.
“Prices are at … a high but price-to-earnings ratios are low compared to historic levels in 2008, and this provides insurance against any possible sell-offs,” Business Day quoted an independent analyst, Ian Cruickshanks, as saying.
It also quoted Momentum Asset Management senior portfolio manager, Wayne McCurrie, as saying resources were expected to lead the charge, fuelled by bulk commodities demand from China.
“Events that will drive the local bourse are twofold. On the one hand, you have excess cash flow in the market as a result of lower interest rates, and on the other hand you have got better than expected economic data coming out of China and the US,” he said.