Jojo Bannerman, Ag. Head of Financial Markets at Standard Chartered, has urged both retail and institutional investors to diversify their portfolios locally and globally, highlighting the elevated impact of current geopolitical developments.
Speaking at the launch of Standard Chartered’s 2024 Global Outlook, themed ‘Sailing with the wind,’ Mr. Bannerman highlighted the increasing interconnectivity of the world. He emphasized the ripple effects of developments in one part of the world affecting others and advised investors to seize the abundant opportunities available by diversifying their holdings.
“The world becoming increasingly more interconnected as such, developments in one part of the world are having ripple effects elsewhere. Opportunities still abound for investors but it is prudent that they diversify their holdings,” he noted.
Amidst these opportunities, industry experts, including Mr. Bannerman, are pointing to the global technology market as the most promising investment avenue. Projections indicate a surge from US$8.51 trillion in 2022 to US$11.47 trillion by 2026. Key segments, including electric vehicles (EVs), artificial intelligence (AI), and robotics, are expected to drive the next tech boom.
Mr. Bannerman drew attention to the tech sector’s robust future, specifically mentioning the electric vehicles (EV) market projected to reach a staggering US$623.3 billion globally in 2024. Data aggregator Statista predicts a steady 9.82 percent annual growth rate until 2028, pushing the market volume to US$906.7 billion.
The value of AI, estimated at nearly US$100 billion in 2022, is anticipated to grow twentyfold by 2030, reaching almost US$2 trillion. The rapid growth is attributed to advancements in generative AI. Additionally, the global robotics market is on track for significant growth, reaching a projected value of U$38.24 billion by 2024.
Mr. Bannerman emphasized that the tech boom and its investment opportunities are not confined to the global arena but extend to the domestic space.
“Not many of us in the mid-90s, when we first heard of the internet, thought it would become as integral to all that we do as it has become … if we missed out on the first tech boom, we should not miss out on the next,” Mr. Bannerman stated
He highlighted the dominance of a single technology stock on the Ghana Stock Exchange (GSE) and expressed support for increased listings.
In 2023, the Information and Communication Technology (ICT) segment accounted for 84.8 percent and 70.5 percent of the volume and value of shares traded on the Accra bourse. Acknowledging this trend, the GSE has expressed intentions to attract more listings.
Despite expectations of a drop in inflation to around 15 percent by the close of 2024, analysts foresee a modest decline in interest rates. While the Monetary Policy Rate could fall by up to 500 basis points during the year, analysts caution that developments in the Red Sea region may impact inflation in the United States.
Mr. Bannerman anticipates sustained government demand for money market instruments, projecting treasury bill rates to remain above 20 percent, surpassing the historical average of 18.6 percent.
On a similar tangent, Manpreet Gill, Chief Investment Officer of Africa, Middle East, and Europe at Standard Chartered anticipates a positive start for equity and bond markets in 2024 peppered with caution.
“Equity and bond markets are likely to start 2024 on a positive note, supported by hopes of a soft landing and central bank policy shifting towards supporting growth, but we remain on watch should macro winds shift towards a harder landing,” he said.
Mr. Gill, based on the bank’s outlook, proposed an overweight position in high-quality bonds in developed markets due to declining yields, and an overweight stance on equities, particularly in the US and Japan, expecting them to outperform cash yields.
He also recommended buying into technology, communication service, and healthcare equity sectors in the US, as well as China’s consumer discretionary, communication services, and technology sectors.
