Novare Bets on Insurers, Small-Caps as Big Winners in SA Market Rally

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South African insurers, banks, retailers and domestically focused small-cap stocks are set to be the biggest winners from a rally in the country’s stock market, driven by growing optimism that the Government of National Unity (GNU) will make progress in promoting stability and economic reforms.

South African insurers, banks, retailers and domestically focused small-cap stocks are set to be the biggest winners from a rally in the country’s stock market, driven by growing optimism that the Government of National Unity will make progress in promoting stability and economic reforms.That’s the view of Handre Retief, a portfolio manager at Novare Holdings, who also sees strong potential for South African bonds to outperform global averages.

Novare has been buying shares in companies such as Motus Holdings, Southern Africa’s largest automotive company, and other small-caps trading at attractive valuations. Novare is a strong advocate of including hedge funds in a retirement portfolio. Retief argues that hedge funds provide an important layer of risk mitigation, particularly in uncertain markets.

However, hedge funds are growing in popularity, with assets under management in the local industry soaring 24% to a record R94 billion in 2022 compared to the previous year. The annual hedge fund survey, which debuted 20 years ago, has become a key industry guide, providing deep and objective insights into the sector.On the bond side, Retief says Novare sees further potential for yields to fall, pushing prices higher, as bond yields and their prices move inversely.

 

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