The quarter ending 31 August 2018 has unfortunately seen a very negative state of affairs developing, predominantly as a result of politics and the decision by the ANC to forge ahead with land expropriation without compensation. This has caused significant uncertainty and, coupled with a risk-off approach to all emerging markets, has seen the South African currency and markets negatively affected. As a direct result of the political lack of direction, we have seen South Africa entering a phase of technical recession, along with the side-ways movement in the South African indexes over the last few years. This is not a good state of affairs. The ANC’s perceived lack of decision on how land expropriation without compensation will take effect has been poorly handled and caused further uncertainty.
Despite all the persistence of the negativity, there are positives. This includes the focus on state enquiry and the capture that happened under Jacob Zuma’s watch with the Gupta’s. One hopes that with the re-entrenchment of ethics and a focus on routing out corruption, we get traction in our state-owned enterprises which, to date, have cost the country billions. Cyril Ramaphosa has also engaged in raising International funding, predominantly from the Chinese, and good inflows have been seen in this space. Theresa May’s recent visit to South Africa was also a positive. However, the ANC politicians may well continue to cause extreme concern as they attempt to ensure that the voter base is appeased through their political agenda.
Internationally, the United States, despite their recent highs in markets and their Dollar strength, has been a volatile environment as a direct result of President Trump’s politics. His continuation of the implementation and focus on trade wars has and will continue to spook International investors. As a direct result of these policies, we have seen outflows from all emerging economies, particularly with the Italian and Turkish concerns.
In the United Kingdom, Brexit continues to be in the headlines almost daily and the indecision has resulted in a weakening Pound against the major currencies.
The local currency, coupled with the ANC’s disastrous policy implementations, as well as emerging market outflows, have seen the local currency weaken significantly and Rand Hedge stocks globally diverse revenue streams are still a preferred investment.
The Oil and resource stocks continue to perform well, however, there is some concern around China and the slowing growth environment.
From a compliance point of view, the new enhanced FICA rollout is in full swing and we have attempted to ensure that all clients have been re-visited and re-FICA’d, although, from time to time, we may need to update your information.
Fraud is becoming an unfortunate reality and please be exceptionally careful with any emails that you receive from us and, if in any doubt, please phone and chat to either one of the Directors or your Relationship Consultant.
We are delighted to announce Kalan Billington, our lovely new receptionist, who is the daughter of one of our long-standing staff members. She will be a wonderful asset to the business.