Indholdsfortegnelse for 31 December 2015 i Finweek - Afrikaans

it may not feel like this at the moment, but we don’t hold the monopoly on bad news. For one, we’re not the only country where a substantial chunk of the population – or then at least the Twitterverse – is frustrated with their president. Brazilians have been trying for months to get their president Dilma Rousseff impeached, with thousands (estimates vary from 90 000 to 407 000) demanding her removal during protests on 14 December 2015. Facing corruption allegations and overseeing a floundering economy, Rousseff will likely not lose too much sleep over the latest protests, which have been losing steam. In March 2015, for example, an estimated 2.4m anti-Rousseff protestors took the streets. (Also see page 34.) While Rousseff seems to be sitting pretty, Brazil’s economy shrunk by…

looking into the future and making predictions is fraught with difficulties. The only real upside is that if you don’t make that much of a mess of it, nobody will remember. For me the key thing is to focus on recency bias, the bias that makes us think that whatever has been happening in recent times will continue to happen. This is a double-edged sword. Firstly, if everything just carried on as usual, life would be simple. But the reality is that while things do change, that change often occurs at a far slower rate than anyone expects. So we need to know when to embrace recency bias and when to be bold and ignore it. Three key features of the 2015 investment world was the collective holding of breath…

before I jump into my stock picks for 2016, let’s first check in on my 2015 selections. I had Richemont*, Calgro M3*, DBXUS*, Consolidated Infrastructure Group and, for some spice, I added Adapt IT. They all did well enough, with Calgro M3 the clear winner, up some 130% for the year. Richemont just managed a positive return before dividends, while Consolidated almost managed a double-digit return. Adapt IT was over 70% up and DBXUS* added some 35% mostly due to the weaker rand. What stays and what goes? All in all I am chuffed, but that of course puts pressure on me to make a great selection for 2016. Firstly, which of these five from 2015 do I keep, if any? I am not a fan of constantly chopping and…

2015 has by and large been an annus horribilis for investors around the world, with many portfolios battling to eke out a positive return for the year. Add to that the continuation of a downward trend in global growth prospects, an acceleration of sociopolitical unrest and the suffocating pressure of regulation on financial markets, and it is easy to understand why the approach to 2016 is viewed with a healthy dose of disillusionment and scepticism – how will we ever be able to meet the rising financial demands of our own increased life expectancy, and the inability of a sluggish economy to meet the expectations of a “better life for all”? A tough mountain to climb The topics of economic inequality, lack of access to finance and capital and concentrated…

the short answer is yes – as long as the economy carries on stagnating. The main reason we have seen no load-shedding for around 120 days now (barring a few hours here and there) is simply because demand for electricity has dropped off significantly since 2011. The tiny proportion of economic growth that has occurred has not been in energy-intensive sectors like mining. In fact, that sector is in dire straits today. Eskom’s new CEO Brian Molefe has accordingly promised South Africans a load-shedding-free summer. Molefe has gone so far as to say load-shedding may be avoided up until May 2016 when the winter season kicks in. These guarantees are excellent news for South Africans, who experienced 33 days of load-shedding in the first 100 days of 2015. However, considering…

arecent conference convened by Goldman Sachs, the US bank, polled delegates on which metals they expected to recover the best in 2016. About 27% of delegates expected gold to be the best-performing commodity in 2016 with copper coming a close second at 20% of delegates. Embarrassingly, this is the contrary view to Goldman Sachs which believes copper has the best prospects. The truth of the matter is – and whisper this – nobody actually knows. Fending off questions as to why Anglo American hadn’t acted quicker to cut loss-making operations and restructure central costs, CEO Mark Cutifani responded somewhat wryly: “I don’t recall anyone two years ago predicting the prices we have today. I find that quite interesting.” He’s right. Nobody was. The metals price declines, especially in the second…

south Africa’s water resources are under serious pressure. In 2015, demand was already surpassing supply by 1.1km3. This is aggravated by declining supply levels due to the worst drought the country has faced in decades, with four provinces – KwaZulu-Natal, Free State, North West and Limpopo – being declared disaster areas. To make matters worse, the country’s water infrastructure – such as purification plants, pipelines and reservoirs – are in dire need of upgrades that will cost the fiscus R810bn over 10 years. This translates to R81bn per year, although the budget only makes provision for R55bn per year. Furthermore, more than a third of the water treatment plants at South Africa’s municipalities are in a critical condition, seriously affecting the quality of drinking water. So, is water heading down…

Chances are good that Julius Malema’s EFF could double its vote in next year’s local government elections at the end of May. In less than a year after the former ANC Youth League leader founded the EFF, it managed to garner 1.1m votes in the national elections and is represented in all nine provinces. The party, which is known for its red overalls, hard hats and berets, disrupted Parliament on a number of occasions in 2015, insisting that President Zuma answer questions about security upgrades to his homestead in Nkandla. In less than a year after the former ANC Youth League leader founded the EFF, it managed to garner 1.1m votes in the national elections and is represented in all nine provinces. The ANC is expected to win comfortably if…

owning a holiday home has a ring of success attached to it. It speaks to advancement in social and financial status, especially if that home happens to be in an exotic location or along South Africa’s mega-expensive real estate strips. Yet the status symbol of a second home is not always the primary motivation for acquiring a leisure property. For most wishing to own their own piece of utopia, the chief incentive is the ability to escape to that property at a moment’s notice, for as long or as often as they desire. Not too many people have the financial wherewithal to be able to own more than one property. The percentage of holidayhome buyers is small, around 3% of total home buying, mostly from higher income earners. Yet a…

YouTube 1. Caspar Lee 5 389 717 subscribers 424 138 762 views Caspar Lee is South Africa’s most famous YouTube personality. He started his self-titled vlogging channel as a teenager in 2011, which now has over 5m subscribers. His second channel, “morecaspar”, has over 1m subscribers. He appeared in the 2014 film Spud 3: Learning to Fly and voiced a character in The SpongeBob Movie: Sponge Out of Water, which was released in 2015. Lee was born in London, but was raised in SA. He has since returned to the UK and lives in London with fellow YouTuber, Joe Sugg. 2. Die Antwoord 633 123 subscribers 196 609 955 views South African rap-rave group, Die Antwoord was formed by rappers Ninja and Yo-Landi Vi$$er and DJ Hi-Tek in 2008. The…

the 2015 #Fall movement was inspired by, of all things, a pile of excrement. Incensed by having to walk past the Cecil John Rhodes statue on his way to lectures every day, University of Cape Town student Chumani Maxeke threw faeces at the colonialist’s effigy. From that simple act of vandalism grew a powerful force that would define 2015. Fellow UCT students joined Maxeke and the #RhodesMustFall campaign was born. The UCT administration was eventually forced to pull down the statue and re-examine the values and culture of the institution. Other statues of colonial and apartheid icons were also attacked around the country as part of a student-led campaign of “decolonising” SA. To some this campaign of attacking concrete representations of dead white men seemed rather absurd and pointless. But…

BUY Sappi Sappi has shifted its focus in recent years on producing dissolving wood pulp, which can be converted into a range of products, including textile fibres, specialty paper grades and packaging products, for growth. The group, which has shut or sold a number of lossmaking and non-core mills in recent years, has seen its fortunes improve under CEO Steve Binnie, who has been at the helm since July 2014. Although a strong dollar affects the group’s results negatively (it reports in US dollars, even though Sappi’s Europe division accounts for more than 50% of group sales), my long-term positive view on Sappi remains sound – I expect it to extend its bull trend next year. My long-term positive view on Sappi remains sound – I expect it to extend…

World markets are set to continue their volatile performances of the past 12 months in 2016 as a number of contrasting factors will be pulling them in different directions, says Kevin Lings, economist at Stanlib. The biggest factor determining the flow of capital in 2016 will be the US Federal Reserve’s “normalising” of monetary policy, which has seen unprecedented low levels of interest rates in the world’s largest economy since the financial crisis of 2008. At the same time, the European Central Bank will probably continue its so-called quantitative easing in a bid to boost the eurozone economies. A world out of sync The Fed’s tightening of monetary policy, or increases in interest rates, would be determined by the strength of the economic recovery in the US, says Lings. This…

South Africans are collectively holding their breaths for further tax hikes when finance minister Pravin Gordhan delivers his 2016 Budget Speech. In the 2015 Budget Speech, former finance minister, Nhlanhla Nene, increased personal income tax for all taxpayers earning more than R181 900 a year. He also announced an increase in the general fuel levy of an additional 30.5c per litre and a 50c per litre rise to subsidise the Road Accident Fund. A further increase in personal income tax in 2016 will have a negative impact on middle-income earners who are already buckling under significant tax pressures. But with an ever-widening budget deficit, a poor economic growth outlook and two downgrades in South Africa’s credit rating, Gordhan is expected to have little choice but to introduce some kind of…

the government has a bucket list of plans for shale gas. In a 2014 briefing the department of mineral resources (DMR) claimed that the potential economic benefits of fracking included economic growth through electricity generation, gas-to-liquid processes and job creation. The DMR told Parliament that shale gas could be used to meet SA’s demand for domestic fuel consumption through the gas-to-liquids process. It claimed: “The development of shale gas will also contribute to revenue with estimated gross sales of about R1tr.” One early study has found the potential gas in the Karoo to be up to 390tr cubic feet (Tcf). These benefits have however, never been properly verified or even proven to be achievable. In fact, there remains a lot to be done before the actual feasibility can be accurately…

the price of oil such as the benchmark Brent crude is heavily influenced by the Organization of the Petroleum Exporting Countries (Opec), a cartel of producers mostly from the Middle East and Africa that controls its supply depending on economic conditions and price. During periods of price pressure, Opec gets its members to reduce supply. Equally, it increases supply, sometimes for nefarious reasons. Take the increase in supplies over the past few years, which is thought to be the means by which Opec member states have attempted to fight off the growth of energy from North American-based shale producers. From about mid-2011 to 2014, non-Opec supply increased to some 2.5m barrels per day largely owing to oil from shale, a move which prompted Opec to lift its own supplies in…

The #FeesMustFall movement rocked the country in October and November of 2015 when angry students descended on Parliament, Luthuli House and the Union Buildings. Though mostly peaceful, acts of vandalism, violence and theft were reported and a number of students were arrested. The demonstrations generally died down as 2015 came to a close, but students and university authorities have acknowledged that protests could flare up again in 2016. Student leaders say the struggle for free education will continue in 2016, as no fee increase only means there won’t be fee hikes in 2016 and 2017, but there are no guarantees for future years. The National Student Financial Aid Scheme (NSFAS), which provides tuition fees for qualifying students, could be another reason why protests continue. The scheme has difficulty with debt…

one of the major events of 2016 will be the US election in November. Election season is never a good time to get agreements or treaties ratified, and so it is with the Trans-Pacific Partnership (TPP), a free trade agreement currently being negotiated by 12 Pacific Rim countries, including the US, Australia, New Zealand and Singapore. Peter Draper, trade specialist and MD of Tutwa Consulting, says the next question then is whether Obama will be able to rustle up sufficient support in his own party, much of which is opposed to it, and in the Republican Party, most of which is in favour. Odds are that he will, but a lot can change between now and then. The TPP agreement was concluded in October 2015, and covers a combined 40%…

of course we can. Wayde van Niekerk is already the world 400m champion and he can take gold or silver at the Brazil Olympics. His time for the 400m in the Beijing World Championships this year was the fourth-fastest ever recorded. Sunette Viljoen came third in the women’s javelin at the World Athletics Championship this year and her form is improving. Another athlete to watch out for is Anaso Jobodwana, who claimed bronze in the men’s 200m in Beijing, behind the Jamaicans Usain Bolt and Justin Gatlin. SA has the potential to win a medal in the men’s 4x100m relay, despite a poor baton pass in the Beijing race that messed up the team’s chances of winning a medal. Jobodwana’s time of 19.87 seconds was a record for SA. Other…

look into the crystal ball of 2016, and there is much to be worried about. The global economy is stumbling along. The conflict in Syria has created geopolitical shifts: the refugee crisis and the political repercussions in Europe; the rise of ISIS and fear of terrorism; the intolerance of Donald Trump and his supporters. Closer to home, the volatility of the rand is partly a consequence of the internal power struggle within the ruling party: the removal of finance minister Nhlanhla Nene on 9 December 2015 followed by Pravin Gordhan replacing Nene’s successor four days later was a case in point. The medium-term effects of this strange episode in our political history are still unclear, but it is likely to have reminded SA’s politicians, and those who vote for them,…

I was having year-end drinks on 9 December with a bunch of friends when I got the message that President Jacob Zuma had fired finance minister Nhlanhla Nene and replaced him with an absolute unknown. My immediate response was twofold: firstly, that – as absurd as it sounded – it was likely true. Secondly, the president had just thrown the country off the cliff. So how does this play out, and what do we do with our investment portfolios? The reality is that even with a tough finance minister pushing back on spending, there was a small but real chance South Africa’s credit rating would be downgraded to junk status during 2016. With former finance minister Pravin Gordhan back at the helm at Treasury, junk status is therefore still possible…

afund fact sheet gives an investor a snapshot of how a fund has performed, where the money is invested and what the risk profile of the fund is. It also sets out the trustees of a unit trust, as the fund manager who operates the trust is only responsible for the investment decisions. So how does one read a fund fact sheet? Performance The performance of a fund, which is normally recorded as net of fees, could be given in two ways, according to Niël Hougaard, analyst and portfolio manager at Autus Fund Managers. Cumulative performance shows the fund’s total performance over a specified period, for example one, three or five years or since the fund was established. Annualised performance provides the fund’s returns as an annual equivalent, or how…

By finweek team until recently, investors in the South African stock market enjoyed relatively strong returns. But with the JSE trading at historically expensive levels, and seen as expensive compared to both emerging and developed markets, how sustainable are these returns? Neal Smith, portfolio manager for SIM Global Emerging Markets Fund, says SA’s weak domestic growth outlook, expensive valuations and the fact that the rand is not oversold relative to other emergingmarket currencies imply that there is greater value to be unlocked offshore. “Investing in SA alone restricts investors’ access to a multitude of opportunities that exist offshore (countries, industries, companies) that cannot be accessed locally,” Smith says. Wehmeyer Ferreira, head of db X-trackers in SA, also advocates for increasing international diversification by South African investors, particularly given the recent…

The issue in respect of a carbon tax in SA is not whether one will be written, passed into law and levied in industry, but rather how it will be implemented. That’s because SA’s National Treasury is set on the tax coming into existence in 2017, while the Davis Tax Committee is hoping there will be 100% threshold in its first year. The threshold means that industry would be required to submit returns in the first year of implementation, but be exempt from having to pay a tax until the following year in 2018. Currently, there is no harmony between the committee’s view that a 100% threshold be applied. It has recommended one, but the Carbon Tax Bill – which was recently issued for public comment – does not provide…

nuclear power is coming and the process is gathering momentum. The government considers a new nuclear build programme, of around 9 600MW in size, to be an excellent idea and one that must be embarked upon as soon as possible. In the Medium-Term Budget Policy Statement in October, former minister of finance Nhlanhla Nene announced a R200m allocation for preparatory work for nuclear power. Currently the major challenge is financing this massive project. What will it cost and where will the money come from? No tender can (theoretically) be allocated before the funding is nailed down. Will the country even be able to afford a mega nuclear build programme? That’s another question. Government debt is already increasing massively and an additional nuclear programme worth R600bn (unverified and vague estimate) will…

There’s no doubt that property tycoon Donald Trump has added some fizz to the normally dour US presidential race, but can he actually win it? He’s slayed some sacred cows by repeatedly insulting reporters who disagree with him, by calling for a ban on Muslim immigration and telling the Jewish lobby that he cannot be bought. That’s a deep gash to the body politic but each time his opponents call for him to repent, he doubles down, and his ratings go up. Trump is tapping into a brooding vein of discontent on the Republican right. The establishment would like to see a Jeb Bush versus Hillary Clinton showdown, but there is a sense that these two families have ruled the empire for too long and it is time for a…

investors will be hard-pressed to find asset classes that perform well in 2016 as a myriad of global and local factors hammer certain stocks and regions. The US Federal Reserve is tightening monetary policy, or rather, was (at the time of writing on 15 December 2015) expected to start increasing interest rates, in the world’s largest economy. At the same time oil is trading at multi-year lows, while the prices of precious metals – including platinum and gold – remain under pressure. Locally, the SA economy stutters along on a lowgrowth path. Jobs are being shed, the ghost of high inflation is looming and the rand plummeted to record-lows due to a lack of international confidence in the government. Basic metal prices, such as for iron ore, aren’t likely to…

Welcome to the last quiz of the year! It’s a bumper edition with twice as many questions. If some of them sound familiar, it’s because we did a recap of the year’s quizzes. You also stand a chance to win a prize – we’re giving away one copy of Wallop! – An advertising phenomenon called Rightford, Searle-Tripp & Makin by Toni Younghusband, which takes you behind the scenes of one of SA’s most successful advertising agencies. The titular ad agency joined Ogilvy in 1984, but the book chronicles some of the agency’s best work from its founding in Cape Town in 1976. 1 Name the company the online retailer Kalahari merged with. 2 Name the local company that is partnering with Starbucks to bring the coffeehouse chain to South Africa.…