Risk

Following weeks of contestation, Jacob Zuma resigned on 14 February 2018 after nine years in office, leaving a mixed legacy to South Africa’s new president, Cyril Ramaphosa.

Equities and real estate can structually deliver returns in excess of economic growth, but within limits, says Robeco investors Lukas Daalder.

When it comes to valuing shares, the price-to-earnings (P/E) ratio is a bit like the baloney sandwich of equity valuation. Wall Street’s finest might all know about more elegant, sophisticated and nutritious alternatives.

We remain constructive for equities, due to the synchronized global recovery, which we expect to underpin strong earnings growth. Given that until recently, investor sentiment was near record highs, we think that some sort of correction was indeed overdue.

We have been expecting a pick-up in market volatility as part of our global outlook for 2018. The current volatility episode should, however, be temporary as market participants take note of the gradual normalisation of inflation and monetary policy.