James Turp, the Head of Fixed income, and our very own “Mr. Bond,” captured the attention of clients as he delved into the great expectations currently baked into the fixed income world.
The External Distribution Channels (EDC) team hosts monthly lunches, where we not only showcase the ABSA Asset Management franchises but also create an environment where clients and have meaningful interaction with our portfolio managers. This month we showcased the fixed income franchise. One cannot ignore the stark difference between the two lunches. The one was set in the Winelands in Cape Town, at a serene and tranquil restaurant with plenty of light and cool air flowing. The other in Rosebank in Johannesburg, in a serious and dark private room, with a Manhattan feel to it. The differences speak to the nuances within the client set and the conversation reflected that the things plaguing our retail investors in the different provinces vary due to their different client profiles. Fortunately, the sales team has dedicated individuals who understand these different locations.
While many things can differ, the consistent theme was inflation expectations and interest rate forecasts. James kicked off the lunch by asking what each individual thought about the path of interest rates for South Africa (SA) and gave everyone a chance to respond. This got everyone thinking about the current macroeconomic landscape. The conversation flowed and most participants held the view that rates would be on hold or would move marginally lower. The Central bank has done a good job of not only signaling their thinking and tempering expectations, but has also allowed for market participants to realise that the era of 50bp cuts are a thing of the past, for the foreseeable future.
After James walked the audience through the current market fundamental factors, he then focused on the funds in the fixed income stable, as shown below.
After good food and great wine, it’s safe to say that our own “Mr. Bond” lived up to the expectations of the clients and so do the fund returns.
Tsitsi Hatendi-Matika is Head: Retail Investment Specialist at Absa’s Wealth and Investment Management unit.