JSE offers opportunity if oil price decline triggers a recovery

Résumé détaillé

Local shares expected to deliver a return of at least 15% over the next year.

Anchor Capital’s quarterly Where The Money Will Be Made presentation, each one looking at market conditions and naming a couple of shares that might outperform over the following 12 months, has built up quite a following.

The group’s founder and CEO Peter Armitage said in the introduction to the latest episode that more than 1 300 viewers were watching.

Read: Which market gains the most from a collapse in oil? JSE rallies 3.67%

A recurring theme emerged during the presentation – that share prices of local companies are offering outstanding value amid all the uncertainty in the world.

Armitage opened the presentation with an interesting statement. “In the dry run of the presentation I told the guys that we all sound very chipper, but there is a lot going on in the world.

“The high oil price is flowing through to inflation and US bond yields have reached their highest level in more than 20 years.

“Underlying all of this, and what is a much stronger force than all the negatives, is massive and almost unprecedented sustained earnings growth in America. Valuations of companies are going up.”

However, he warns that his return expectations are based on the resolution of the world’s energy crisis, which he expects will happen at some point.

“The natural oil price is half of the current levels. We have said often that there is more than enough oil in the world.”

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