Momentum’s 2025 financial market outlook: Here's what to know
Momentum has released its financial market outlook for 2025, saying that their investment preference for local over global assets in the next year is premised on the combination of superior expected fundamentals, more favourable valuations and some anticipated rand strength. Herman van Papendorp, Head of Investment Research and Asset Allocation at Momentum Investments joins CNBC Africa for more.
Tue, 03 Dec 2024 16:01:56 GMT
Disclaimer: The following content is generated automatically by a GPT AI and may not be accurate. To verify the details, please watch the video
AI Generated Summary
- The shift towards local assets over global ones in 2025 is driven by anticipated superior fundamentals and more favorable valuations, underpinned by positive political outcomes.
- Anticipated policy changes under the Trump administration, including tariff adjustments and tax strategies, are expected to influence market dynamics and asset allocation decisions, favoring equities over bonds in the short-to-medium term.
- South Africa's market outlook for 2025 reflects a transition from challenges to opportunities, with reduced inflation and interest rates supporting local asset classes, despite conflicting signals in the listed property sector.
Momentum Investments has recently unveiled its financial market outlook for 2025, hinting at a preference for local assets over global ones. This shift is based on the anticipation of superior expected fundamentals, more favorable valuations, and a potential strengthening of the rand. Herman van Papendorp, Head of Investment Research and Asset Allocation at Momentum Investments, shared insights and reflections on the past year while also offering valuable perspectives on the year ahead. In a recent CNBC Africa interview, Herman highlighted key factors influencing market expectations for 2025. Reflecting on the surprises of 2024, Herman emphasized the positive impact of political outcomes on South African assets, providing a foundation for cautious optimism moving forward. Discussing the potential policy changes under the upcoming Trump administration, Herman touched on the expected focus on tariffs and tax strategies. These changes could have implications for inflation rates and market dynamics, driving shifts in asset allocation strategies. While uncertainties linger until the inauguration in January, Herman suggested a proactive stance on equities over bonds in the U.S. market, considering the short-to-medium-term impacts of policy adjustments. As for South Africa, Herman outlined a transformation of headwinds into tailwinds, fueled by reduced inflation and interest rates, fostering a positive environment for local asset classes. Despite challenges in the local listed property sector, Herman highlighted conflicting signals in fundamentals and valuations, urging a cautious approach in tactical asset allocation. Looking ahead to 2025, Herman identified potential risks for the South African market, emphasizing the importance of monitoring political stability and maintaining diversified portfolios. As the global and local landscapes evolve, strategic and tactical asset allocation strategies will play a crucial role in navigating the dynamic financial markets of 2025.
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