SIMON BROWN: I’m chatting now with Schalk Louw from PSG Old Oak. Schalk, I appreciate the early morning during your summer holidays. I’ve got to say I thought I was a market nerd, but I think you top me on this. You were going through the forecasts released by all the large investment houses, and you collated them together. [There are] a couple of big themes.
Looking at some of these commodity prices, oil prices, food prices, I don’t foresee that becoming less of a problem. Looking at some of these things, Morgan Stanley actually came out at the end of last year, when they brought out their 2022 outlook, saying that oil could top $90/barrel in 2022, a rising demand. They mentioned the supply chain. Hey, we are here at $90 already, so here we go. It’s not even the end of January. So that is a clear worry, and a clear worry again for inflation.
SCHALK LOUW: We’ve had this theme. I think halfway through last year I [was] really harping on this whole value thing, and look where we are now. We’ve seen it. Look at the first part of this year – I wouldn’t say it’s a total reversion, but clearly some reversion. In a BNP Paribas view – I love their view – they said that the wide valuation gap between value and growth stocks and the prospect of high interest rates suggests upside is ahead.
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