Kenya’s fiscal policy is set to benefit from a renewed focus on managing external liquidity concerns recede even as fiscal challenges persist. This is according to the latest global Market Outlook Report for 2024 from Standard Chartered.
The Report, titled “Sailing with the Wind” finds that the US and other major economies are likely to witness sharply slower growth and sliding inflation in 2024. The Report is a compilation of views by the Bank’s Chief Investment Officer outlining the Bank’s investment strategy for the year ahead.
Manpreet Gill, Chief Investment Officer of Africa, Middle East and Europe at Standard Chartered, said that investors should carefully consider their investment objectives, matching them against long-term investment horizons and focus on building portfolios that can weather drawdowns in their portfolio.
“A key element of our advisory is that investors need to retain a strict investing discipline – they should not force sell, whether it be due to emotional or financial needs, and they should pivot to avoid excessive, permanent losses,” said Mr. Gill.
The report finds that US and other major economies are likely to witness sharply slower growth and sliding inflation in 2024. Equity and bond markets are expected to start 2024 positively, supported by hopes of a soft landing and central bank policy shifting towards supporting growth, but it remains on watch should macro winds shift towards a harder landing.
Closer to home, Standard Chartered advises that investors should anticipate more stability in lending rates, even as expected fluctuations in forex and the tax environment continue to shape the operating environment.
“Being able to spot where asset class risk/reward appears the most attractive will be key for Kenyan investors. For many, this will mean taking prudent steps to retain investments and look for long-term returns,” said Paul Njoki, Head, Wealth Management, East Africa, Standard Chartered.
Mr. Njoki said the developments have led to the Bank launching a new holistic investment framework that enables clients to build strategic portfolios to protect and grow their wealth. “The framework, named SC Wealth Select, allows customers to review and allocate assets in line with their today, tomorrow and forever goals and in response to the investment climate,” said Mr. Njoki.
The new service adds to Standard Chartered’s growing capabilities in wealth management, including local and International advisory, property management, the entry-level SC Shilingi Funds and the recently launched Signature CIO Funds.
The 2024 Outlook Report represents Standard Chartered’s take on how investors can optimally position their asset allocation as they navigate 2024 amid rapidly shifting economic conditions. Against this backdrop, Standard Chartered believes that investing in 2024 is likely to be influenced by investors balancing the evolution of the macro scenario.
The Report advises that for Foundation allocations – a model that can be used as a starting point for building a diversified investment portfolio – the highest convictions are in (i) high-quality Developed Market government bonds, particularly with longer maturities, (ii) global equities heading into early 2024, led by the US and Japan, and more broadly (iii) global equities and global bonds, which are likely to deliver cash-beating performance.
The team’s Opportunistic allocations look to take advantage of stock and sector dispersion to capture short-term opportunities, with a view to (i) buy communication services, technology and healthcare equity sectors in the US, (ii) buy consumer discretionary, communication services and technology sectors in China, and (iii) play the USD range.