Our triumphant Olympians barely had time to unpack their bags and soak up the adulation of a nation buoyed by their performance – as well as by the strengthening rand and the successful outcome of the local government elections – when the celebrations came to a screeching halt. President Jacob Zuma declared himself in charge of state-owned enterprises while Finance Minister Pravin Gordhan still faces possible arrest – with little effective support from the President. There are allegations of corruption and bribery by the Passenger Rail Agency of SA (Prasa), and Eskom and the Treasury are in a spat over coal contracts with the Guptas.
The immediate effect has been a severe impact on that most fragile of financial assets, our currency. The rand has retreated since the start of the most recent round of political shenanigans, wiping out much of its gains following the election results. Fortunately, however, we haven’t reached the low point to which the rand plummeted in the wake of the last big political shock – the announcement of the axing of then Finance Minister Nhlanhla Nene in January.
What does all this mean for investors? Is it all doom and gloom? Without wanting to sound alarmist, I think we’ll have to accept that things may well get worse before they get better. We will have to brace ourselves for a continued period of uncertainty.
Whatever happens now, we’re highly likely to see a ratings downgrade to ‘junk’ by the end of the year. The three top ratings agencies, due to return to South Africa in December, are no longer likely to give us the benefit of the doubt, which they still appeared willing to do after Nenegate. A downgrade will naturally have enormous implications for our economy, business enterprise and investment. Despite a second-quarter GDP spike of 3.3%, our economy just cannot hope to grow over the long term under the present circumstances.
There has been huge commitment from the business community, in collaboration with Treasury, to get South Africa on the right track, including another roadshow planned for October to reassure investors, just before the mid-term Budget Review. No matter what national campaigns are launched, however, they won’t be worth much as long as our President continues his open warfare on Treasury and persists in making irrational decisions such as increasing his control over the parastatals.
It’s clear from recent events, however, that the President does not appear as strong as he used to be. His support base may have weakened somewhat following his party’s poor performance in the municipal elections, and we’re witnessing more influential leaders than ever before expressing misgivings about his leadership. At a funeral service for former Sports Minister Makhenkesi Stofile, ANC stalwarts and business leaders – including AngloGold Ashanti Chairperson Sipho Pityana – slated both the ANC and President Zuma. There have also been increased calls in the media for the current ANC leadership to stand up and take a stronger stance, or they will not be able to claim to be part of the post-Zuma era.
Let’s follow the example of the UK – where, after the initial Brexit vote shock and resulting anger, fear and general disbelief, the Brits have collectively decided to knuckle down and make things work in their country. Let’s take our cue from their determination and get back to business, not back to bedlam.
We can assist you with
Discretionary investment management
Sanlam Private Wealth manages a comprehensive range of multi-asset (balanced) and equity portfolios across different risk categories.
Our team of world-class professionals can design a personalised offshore investment strategy to help diversify your portfolio.
Our customised Shariah portfolios combine our investment expertise with the wisdom of an independent Shariah board comprising senior Ulama.
Outsourced investment service
We collaborate with third-party providers to offer collective investments, private equity, hedge funds and structured products.
Sanlam Private Wealth (Pty) Ltd, registration number 2000/023234/07, is a licensed Financial Services Provider (FSP 37473), a registered Credit Provider (NCRCP1867) and a member of the Johannesburg Stock Exchange (‘SPW’).
All reasonable steps have been taken to ensure that the information on this website is accurate. The information does not constitute financial advice as contemplated in terms of FAIS. Professional financial advice should always be sought before making an investment decision.
Participation in Sanlam Private Wealth Portfolios is a medium to long-term investment. The value of portfolios is subject to fluctuation and past performance is not a guide to future performance. Calculations are based on a lump sum investment with gross income reinvested on the ex-dividend date. The net of fee calculation assumes a 1.15% annual management charge and total trading costs of 1% (both inclusive of VAT) on the actual portfolio turnover. Actual investment performance will differ based on the fees applicable, the actual investment date and the date of reinvestment of income. A schedule of fees and maximum commissions is available upon request.
COLLECTIVE INVESTMENT SCHEMES
The Sanlam Group is a full member of the Association for Savings and Investment SA. Collective investment schemes are generally medium to long-term investments. Past performance is not a guide to future performance, and the value of investments / units / unit trusts may go down as well as up. A schedule of fees and charges and maximum commissions is available on request from the manager, Sanlam Collective Investments (RF) Pty Ltd, a registered and approved manager in collective investment schemes in securities (‘Manager’).
Collective investments are traded at ruling prices and can engage in borrowing and scrip lending. The manager does not provide any guarantee either with respect to the capital or the return of a portfolio. Collective investments are calculated on a net asset value basis, which is the total market value of all assets in a portfolio including any income accruals and less any deductible expenses such as audit fees, brokerage and service fees. Actual investment performance of a portfolio and an investor will differ depending on the initial fees applicable, the actual investment date, date of reinvestment of income and dividend withholding tax. Forward pricing is used.
The performance of portfolios depend on the underlying assets and variable market factors. Performance is based on NAV to NAV calculations with income reinvestments done on the ex-dividend date. Portfolios may invest in other unit trusts which levy their own fees and may result is a higher fee structure for Sanlam Private Wealth’s portfolios.
All portfolio options presented are approved collective investment schemes in terms of Collective Investment Schemes Control Act, No. 45 of 2002. Funds may from time to time invest in foreign countries and may have risks regarding liquidity, the repatriation of funds, political and macroeconomic situations, foreign exchange, tax, settlement, and the availability of information. The manager may close any portfolio to new investors in order to ensure efficient management according to applicable mandates.
The management of portfolios may be outsourced to financial services providers authorised in terms of FAIS.
TREATING CUSTOMERS FAIRLY (TCF)
As a business, Sanlam Private Wealth is committed to the principles of TCF, practicing a specific business philosophy that is based on client-centricity and treating customers fairly. Clients can be confident that TCF is central to what Sanlam Private Wealth does and can be reassured that Sanlam Private Wealth has a holistic wealth management product offering that is tailored to clients’ needs, and service that is of a professional standard.