Chantal Marx – Head of Investment and Research at FNB Wealth – discusses investment trends, highlighting the oversubscribed Boxer IPO, WeBuyCars’ strong growth, and cautious optimism around crypto. She advises trimming US tech exposure while exploring value in diversified miners and small to mid-cap stocks. With December’s slowdown, she urges seizing overlooked opportunities in quieter markets.
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Extended transcript of the interview ___STEADY_PAYWALL___
Bronwyn Nielsen (00:00.819)
With me is Chantal Marx, the Head of Investment Research at FNB Wealth and Investments. Chantal, it’s always good to chat with you. As we near December, it’s great to have this conversation to understand what people are doing with their money right now from a retail investor perspective. There’s quite a bit happening from a news flow perspective. Of course, We Buy Cars is coming out with excellent results, and that stock just keeps hitting new all-time highs. Then there’s the Boxer listing on the 28th of November, which has a lot of people excited about the opportunities it presents. What do you think are the most important elements at the moment?
Chantal Marx (00:52.309)
Yes, we’re certainly seeing a lot of interest from retail investors in companies they know. I think that’s a big reason why there’s so much buzz around the Boxer IPO. We’ve been taking applications from clients, but we’ve had to give them a very small allocation because it was several times oversubscribed. People know the Boxer name—they see the stores popping up everywhere.
Boxer’s value proposition is clear to the market, so it makes sense for them to invest in it. We saw a similar trend with We Buy Cars post-listing. It’s a trusted name in an industry—used vehicles—that historically lacks trust. Investors understand how We Buy Cars can grow its business over the next five to ten years. Their results prove they’re delivering.
Earnings growth and the outlook are keeping up with the share price, which has more than doubled since its listing. The valuation doesn’t seem overly demanding, and Boxer’s listing price at R54 doesn’t look expensive either. Investors are looking for value and businesses they understand.
Bronwyn Nielsen (02:10.107)
Before we move off the South African market, are there other pockets of value that you’ve identified?
Chantal Marx (02:18.153)
Yes, there are two segments I’d highlight. First, within the small to mid-cap space, there are these hardcore industrial companies like Invicta, Hudaco, and Reunert. These are mid-cycle plays tied to the SA Inc story, with optimism around growth and improved business and consumer confidence.
These stocks are still trading at single-digit P/Es, and companies like Reunert also offer attractive dividend yields.
The second pocket of value I see is in industrial rand-hedges—companies like Richemont and Mondi. These have been overlooked due to their exposure to China and Europe, but I think there’s value there. These are long-term core holdings for any portfolio.
Bronwyn Nielsen (03:22.407)
On the international front, U.S. President-elect Donald Trump has named Scott Bessend as his choice for U.S. Treasury Secretary. Markets seem excited about this. What’s your take?
Chantal Marx (03:45.339)
Markets were likely seeking a safe pair of hands, and while there’s limited scope for financial engineering given the U.S. debt situation, there might be interesting strategies ahead.
The U.S. has high levels of debt, regularly flirts with breaching its debt ceiling, and faces frequent government shutdown threats. The Republican Party’s stance on deficits is well-known, so Scott Bessend, as a business-savvy figure, may excite markets. Personally, I’d prefer a technocratic, academic approach to fiscal management. But we’ll have to wait and see—it’s an unknown in the U.S. political landscape.
Bronwyn Nielsen (04:42.205)
Let’s talk crypto. Bitcoin is flirting with the $100,000 level, and the positive sentiment around crypto assets is strong. What’s your advice to people who ask, “Have I missed the boat? Should I sell my stocks and go all-in on crypto?”
Chantal Marx (05:16.167)
We always advise clients to treat crypto cautiously. Yes, it has added returns to portfolios historically, but uncertainty looms—particularly regarding regulation and volatility.
For crypto enthusiasts, we recommend limiting exposure to a maximum of 5% of your total portfolio. Diversify with equities (local and international), fixed-income investments, and emergency savings. Have crypto exposure if you want it, but don’t bet the house on it.
Bronwyn Nielsen (06:13.231)
On the South African front, gold prices are coming down hard, impacting top resource players. How should investors approach resource stocks?
Chantal Marx (06:25.795)
It’s time to consider pivoting out of gold stocks and into diversified miners. Companies like BHP offer exposure to stable demand commodities like copper and iron ore, making them less volatile.
Gold miners are still generating cash, but if gold prices drop, free cash flow yields will compress. I’d recommend focusing on diversified miners for now. As for PGM players, their time will come, but I’m cautious for now.
Bronwyn Nielsen (07:19.519)
What about Sibanye and their foray into renewable energy—does that excite you?
Chantal Marx (07:28.578)
It makes me less wary of Sibanye. They’re future-focused and investing in metals of the future. However, these investments will take time to bear fruit, and they’re still heavily dependent on PGMs and gold. I’m on the sidelines for now but appreciate their long-term vision.
Bronwyn Nielsen (08:01.449)
Some asset managers are overweight on banks. Do you share that sentiment?
Chantal Marx (08:10.679)
Banks feel similar to the retail space. They’ve had strong gains and may have run slightly ahead of fair value. My suggestion is to trim profits but maintain some exposure as they’ll benefit from improved confidence and economic growth over the next few years.
Bronwyn Nielsen (08:41.277)
Is there anything we haven’t covered that you think is worth discussing as we approach December?
Chantal Marx (08:55.66)
One big question is when to trim U.S. tech exposure, particularly in the semiconductor space. Stocks like Nvidia have seen massive growth, but it might be time to take some profits and explore opportunities elsewhere, such as European consumer stocks or U.S. small and mid-caps.
Bronwyn Nielsen (09:37.681)
Does Warren Buffett trimming his tech stock positions serve as a signal?
Chantal Marx (09:42.025)
Yes, potentially. Buffett is the ultimate value investor, and trimming his Apple position might indicate that valuations are stretched. It’s a good reminder that you can lock in profits while still retaining exposure to benefit from further upside.
Bronwyn Nielsen (10:25.851)
How do you approach the holiday season as a South African investor?
Chantal Marx (10:46.813)
Market volumes drop significantly from mid-December, so it’s a great time to step back. However, keep an eye on the market for any interesting opportunities that might arise.
Bronwyn Nielsen (11:21.267)
Lastly, how do retail investors get insights into small and mid-cap stocks on the JSE, given the limited research available?
Chantal Marx (11:50.664)
Some providers, like FNB Stockbroking and Portfolio Management, offer small and mid-cap research. Many of today’s large, beloved companies started as small caps—Capitec, Mr. Price, and even Naspers. Keeping an eye on these opportunities can be rewarding.
Bronwyn Nielsen (12:41.063)
Chantal, it’s been great catching up. Thank you for your time.
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