This week our investment committee meeting discussions were effectively a prelude to our Global Macro Overview webinar that we will be holding on Monday 22nd November 2021, so we’re going to keep the feedback short and sweet with the aim of giving you, the reader, a taste of what you can expect on Monday. Jacques de Kock provides a summary of this week’s investment meeting below:



From a technical analysis point of view, the general equity sectors (S&P 500, Nasdaq, Russel Value, FTSE, Nikkei, etc.) are still going strong. This confirms our call to stick with risky assets in the short term. Our only concern is on the EM Value side, where technicals looks less attractive vs DM counterparts. This is also echoed in our portfolio composition and fund asset allocations. Andy Pfaff summed up the feeling in the room quite well in stating that: “It’s all Bullish in G7-Land”

The US Dollar is up sharply as its position of strength continues versus most other currencies. We are also seeing similar strengthening characteristics from the Chinese Yuan. Commodities remain a mixed bag, with Gold looking strong in the short term, but with iron-ore and PGMs still under pressure.

We also discussed the impact of the US consumer price index rising by 6.2% in the 12 months to October, compared to the 5.9% expected by economists. This is the largest increase in consumer prices since 1991, and the US Bond market reacted accordingly. This is another shot at the proponents of a “transitory inflation” scenario playing out in the short term.

Within the Commodity sector, Agri seems to be on an upward trend. Energy supply is still a problem with demand due to ramp up in the near future. US can use stockpile resources (oil), but it still needs to be refined before it can used. This could cause a major lag in supply dynamics.

– Trader’s Lore

South Africa

On the local side, the equity market is mostly bullish, especially the industrial sector with Richmont, Naspers, Prosus and MTN leading the way. In contrast, the resources and financial sectors are trending flatter than the rest of the market.

Property is rather flat but trending upward over the medium term. We had a discussion on possible pressures and opportunities on the sector and moved our exposure from underweight to neutral. This is because of the diversification benefit, inflation hedge attributes and the correlation to the SA recovery story.

We are seeing the SA Bond yields (specifically the R186 and the R2030) turning down in the short term. We are now awaiting the local CPI figures to see how the local bond market responds. The consensus expectation as per Bloomberg surveys is for unchanged inflation rate of 5.0% y/y, which is high, but still well within the SARB’s 3%-6% target range. We feel that this would be a good place to be with the US going past 6% and should bode well for the Rand if we can keep the inflation rate in check for longer.

For a technical point of view, we are seeing Rand weakness continuing versus Dollar, but short-term strength versus the rest of the major currencies.



We are keeping to our risk stance for now and have borne the fruit thereof in the last couple of months. But we are ready to pull the trigger on a risk-off scenario if the scenario arises.


Risk Score





Learn more about our Risk Score

At MitonOptimal we utilise our proprietary optimiser to calculate a SA and Global risk rating. This is a rating out of 10, with a rating of 5 reflecting our neutral risk position, 0 being a totally risk-off stance and 10 totally risk-on. We review and set the tactical risk rating on a weekly basis at our global investment meeting, and the outcome of this review may result in a tactical tilt to our portfolios. In extreme circumstances we might review our strategic risk score. For example: when we declare a risk score of 4, it means we are cautious relative to our long term strategic asset allocation plan – alternatively, when we declare a risk score of 6 we are more aggressively positioned relative to our long term strategic asset allocation plan.


Jacques de Kock

Quantitative Analyst & Portfolio Manager



The content of this article is for information purposes only and does not constitute an offer or invitation to any person. The opinions expressed are subject to change and are not to be interpreted as investment advice. You should consult an adviser who will be able to provide appropriate advice that is based on your specific needs and circumstances. The information and opinions contained herein have been compiled or arrived at from sources believed to be reliable and given in good faith, but no representation is made as to their accuracy, completeness or correctness.

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