deVere’s Investment Strategist features on South Africa’s two biggest radio stations


02 Feb, 2017

deVere’s Investment Strategist features on South Africa’s two biggest radio stations

Tom Elliott, deVere Group’s International Investment Strategist, spoke on two of South Africa’s largest radio stations yesterday to discuss the top three risks investors face in 2017.

Mr Elliott was a guest on Fine Music Radio’s ‘Fine Business Radio’ programme, presented by Lindsay Williams, one of South Africa’s most popular financial news broadcasters; and also featured on Classic FM’s ‘Classic Business’ show, presented by highly respected South African financial news broadcaster, Michael Avery.

During the first interview, deVere’s Investment Strategist outlines the three main uncertainties to investors this year. He states: “Number one, we have the risk of inflation coming in from the U.S. as President Trump applies fiscal policy that is totally inappropriate to the American economy, which could lead to the Fed over responding with high interest rates”.

“Second, the wave of populist support that we’ve seen in the Brexit vote and Trump getting elected, coming into continental Europe this year. We have the Dutch election soon, the French in the Spring and the German election in the Autumn, which could lead to further tensions within the EU”.

Thirdly, he adds: “The risk that the oil price drops if the recent agreement between OPEC and non-OPEC countries dissolves. This is mainly due to the growing realisation on the part of Saudi Arabia and the Gulf states that with the use of renewables and ever-more efficient energies, they are sitting on what could be an asset that has little long term value”.

Presenter, Lindsay Williams continued, asking Tom if he is worried about the markets, or has any other apprehensions. Mr Elliott comments: “My main concern is that after a year or 18 months of an over-heating U.S. economy, with the U.S. and global stock markets doing well on the back of it, that suddenly it all comes down to earth with a bump, as the Fed decides to pre-empt a serious long-term inflation risk by hiking rates up, signalling the end of the bull market”.

In addition, Tom Elliott took part in a panel discussion on Classic FM’s ‘Classic Business’ show, entitled ‘Wealth Themes for 2017’, along with Bradley Mitchell from Sasfin, to identify what this year’s key geopolitical, economic and other market dynamics are likely to be, and how those might impact people’s wealth strategy.

Asked by the presenter his thoughts on the theme of divergence in trade, fiscal policy and monetary policy in 2017, Tom comments: “Where we are seeing a big divergence is between those countries that have politically embraced populism, such as Poland, Hungary, the UK under Brexit, and the U.S under Trump, and those who are resisting”.

“I believe that the Netherlands, France and Germany, all of which have elections this year, will resist that move to populism. Therefore, I think it’s on that count where we’ll see the real divergence”.

Presenter, Michael Avery goes on to ask Mr Elliott about the likelihood of interest rates moving higher in emerging markets over the next four years.

deVere’s International Investment Strategist concludes: “Regarding emerging market interest rates, I think they will go up as they’ll have to defend their currencies, because of the $9 trillion debt burden, that’s been widely reported, which has been taken on by emerging market companies and governments since the financial crash.

“Therefore, I think we will see global tightening of monetary policy in emerging markets”.

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