Jan Vlok

As we enter Q2 2025, the global economic landscape remains complex. The Magnificent Seven stocks are likely oversold given their strong fundamentals and attractive relative valuations, but the Trump administration’s upcoming debt refinancing poses a risk to increasing these tech positions prematurely. 

We expect offshore equity to outperform local equity (would you buy Google on a 20 PE or Clicks on a 30 PE?), despite a strong start for local assets. However, excluding rand hedge counters like gold miners, Prosus and Naspers, local equity performance is less impressive.

 The commodity cycle appears to have bottomed, presenting opportunities, but timing is crucial. Local fixed income is preferred over global fixed income, evidenced by strong demand, and oversubscribed bond auctions underpinned by high real yields. 

Our preference is flexible bond exposures, based on the fickle global environment. We are neutral on the rand based on commodities and fixed income real-yield tailwinds, but negative due to own-goal ANC politics.