Old Mutual Investment Group

Meryl Pick and The Money Show’s Bruce Whitfield discuss latest global selloff

August 30, 2022 Old Mutual Investment Group
Old Mutual Investment Group
Meryl Pick and The Money Show’s Bruce Whitfield discuss latest global selloff
Show Notes Transcript Chapter Markers

Portfolio Manager, Meryl Pick, unpacks the sharp global market selloff this week following Fed Chairman, Jerome Powell’s hawkish comments in his Jackson Hole symposium speech last week.

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Bruce Whitfield  00:00

I didn't think markets could be more cheerful than that, but they are, despite quite a sharp sell-off. And Meryl Pick is a Portfolio Manager at the Old Mutual Investment Group, on the line to us from Cape Town. Quite a sharp sell-off globally, Meryl, following Jerome Powell's comments on Friday about higher interest rates for longer, and that scared markets on Friday and continue to do so today.

Meryl Pick  00:28

Absolutely, Bruce. Good evening and good evening to your listeners. I think you're right. Probably the market was looking for something more dovish, and starting to think that if inflation was softening, just a bit, I think - you know, a week or so ago, you were commenting that the market is getting excited about whatever it was, only 8% inflation. So, when we start celebrating numbers that are so far off the Feds' target range, because they're not quite as high as the month before. So clearly, the Fed is signaling that they are not impressed by inflation variables. And they intend to continue effectively dampening and weakening the economy to bring inflation under control. So, definitely the market has gone into risk-off mode, we're seeing the dollar strengthening with that safe haven trade. Of course, that's got a knock-on effect on almost every other currency. The Rand has not escaped that. And the JSE being largely a cyclical market under a risk-off environment, almost everything comes under pressure. And you really have to look very sparkly for the green on the board today.

Bruce Whitfield  01:48

What - the big news out of Massmart, we've kind of touched on it. Sun International results today. ADvTECH results. Other than Massmart, results are actually looking quite perky.

Meryl Pick  02:01

Ja, ADvTECH delivered a reasonable result. We've seen results this week from some of the mining companies. We can see inflation starting to come through and bite there. You've had reasonable trading updates from the retailers, Massmart's results I think are a somewhat of a unique case, in terms of them finding... having trouble over a number of years to find a good fit for their format. I think Massmart buying this out is interesting, because it's an ongoing trend of international buying out locally listed players. You've seen the likes of Pioneer. Well, we've got Remgro wanting to take out Mediclinic. And I was actually doing an exercise earlier on to see 85% of the JSE weightings' actually taken up by I think the top 41 companies now. It's quite... becoming quite concentrated in that top 30 to top 40 space as this trend of delistings continues. You know, hopefully if we see a change and some of the reforms that we're slowly starting to see in the energy sector, as well as slowly picking up corruption. We can get some GDP growth going and some new listings for the JSE in the next decade.

Bruce Whitfield  03:23

Meryl Pick, thank you very much indeed, we certainly hope so. It's getting very lonely, lots of echoes as you look in our market. Portfolio Manager at the Old Mutual Investment Group. 

Meryl Pick comments on the sharp global sell-off and inflation
Discussing results released over the past week, including Massmart and ADvTECH