Indholdsfortegnelse for 5/14/2021 i Finweek - English

a year after Margaret Thatcher’s Conservative Party came to power in the United Kingdom, she made a speech at the party’s congress in Brighton. She is remembered for her “the lady is not for turning” remark. However, in my humble opinion, she mentioned something far more important earlier in her speech. “There are many things to be done to set this nation on the road to recovery, and I do not mean economic recovery alone, but a new independence of spirit and zest for achievement.” By the time Thatcher’s party came to power in Britain, the country’s economy was on its knees: high inflation, excessive state spending, sky-high tax and a state that did not trust the private sector to drive large industries. She paid attention to all of these…

“BREAKDOWN OF PARTY MORALITY.” – President Cyril Ramaphosa said corruption “leads to a breakdown of party morality, and the ANC becomes less attractive, and it leads to the loss of electoral support. If we don’t [do something], we are on a one-way ticket to oblivion and defeat,” on the second day of his testimony on state capture and his role in addressing it. He told the Commission of Inquiry into State Capture that when polls started coming in ahead of the local government elections in 2016, the ANC realised corruption had become a problem.…

bHP (originally BHP Billiton), which was formed in 2001 through a merger of the Australian Broken Hill Proprietary Company and Anglo-Dutch Billiton plc, is a multinational mining, metals and petroleum dual-listed public company headquartered in Melbourne, Australia. The company is one of the leading global players in this sector. In 2015, some of BHP’s assets were demerged and rebranded as South32. In the 2020 Forbes Global 2000, BHP Group was ranked as the 93rd largest public company in the world. Share price history BHP’s current uptrend commenced in 2016, after losing 70% of its share price value from 2014. In February 2011, BHP announced its arrival as a big and very ambitious player in the US shale oil game when it put down $6bn to buy the rights from Chesapeake…

unsurprisingly, the Covid-19 pandemic has had a devastating impact on the travel industry, but despite this, the performance of listed online travel agencies (OTAs) has exceeded that of global equity markets since the end of the first quarter of 2020 (see table). Major OTAs’ earnings have continued to be poor after the second quarter of last year, so we note that the outperformance of their share prices has not been driven by earnings growth. Furthermore, several OTAs have either guided to continued losses in 2021 or have suggested that any recovery will take years rather than quarters. Given this poor short-term earnings outlook, we believe the sector’s outperformance in equity markets since the first quarter of 2020 has been mainly driven by investors using it to gain exposure to a…

you often have to decide at a given moment in the investment world what the best possible investment option would be. The investor has to compare different geographical regions (whether you should allocate your capital to America or South Africa), industries (for example financial or industrial), supersectors (such as telecommunications or technology) as well as subsectors (banks or life insurers) with one another. The JSE introduced its industry classification benchmark (ICB) in March this year. After all, you want to invest in stocks that perform well and have a possible upward price probability. There are different methods to spot such stocks. One methodology you could use is a top-down analysis. You start with the big picture and then move down to the smaller view. A further simplification is to do…

while the pandemic severely disrupted the delivery of education across the world, listed education companies showed some resilience and their enrolments remained robust. However, their ability to increase fees and earn revenue from adjunct services were severely curtailed. The ongoing need for private education in the face of public sector failure, limited places at public institutions, and the growth in online learning resulting from the pandemic continue to be the drivers of growth in this sector. In the year to end-December, which included nine months of lockdown, listed education companies ADvTECH, Curro and Stadio performed relatively well, but investors remain somewhat reticent due to continued uncertainty about further Covid waves and escalating affordability issues due to the economic slump. Results ADvTECH, which owns schools including Crawford, Pinnacle, and Trinity House…

in 2017, more than 7 300 South Africans emigrated to the United Kingdom (UK). Currently there are more than 250 000 South Africans living in the UK and this number seems to be increasing. The proposed amendments to the withdrawal of retirement interest when an individual ceases to be a tax resident will directly affect those South Africans that are planning to move to the UK as well as those that have recently done so. These amendments have been proposed due to the nature of the DoubleTax Agreement (DTA) between, amongst others, the UK and SA, but apply across the board to other similar DTAs. While the proposal is still in its infancy and admittedly contains some grey areas, there are important points to take note of when planning your…

one of my favourite sporting memories is watching live Fifa World Cup games in 2010. Nothing could match the exhilaration of game day, the trip to the stadium, the singing of the national anthems, the buzz of the vuvuzelas, the goals, the banter, the cheering. Or could it? As Covid-19 hit, sport was one of the first industries to shut down. To find out just how much this had changed the sports industry, I asked Brendon Fourie, co-founder and CFO of Four Nations Football Consulting, a management consulting firm based in Barcelona dedicated to helping sports clubs and associations navigate the murky waters of sports business. “The unsustainable financial models at the majority of soccer clubs specifically were bound to fail. Total losses for all 20 clubs in the English…

—The department of public enterprises announced that South Africa is in the final stage of negotiations with a potential investor for its grounded flag carrier, a move that would give the airline a boost just as it emerges from bankruptcy protection. The deal will bring capital and “much-needed technical and commercial expertise” to South African Airways, said the department in a statement. The government didn’t disclose the identity of the potential investor. Ethiopian Airlines Group, Africa’s biggest airline, has publicly expressed interest, but has stressed in the past it would be an operational partner rather than financial backer.…

Revego Africa Energy* invests in developed renewable energy assets, initially in South Africa and eventually they will expand into the rest of sub-Saharan Africa. They will in time invest up to 10% into developments but the business model is largely to invest when the asset is operational and generating an income. Locally, these renewable energy operations have inflation-linked off-take agreements signed with guarantees from government. This essentially removes risk from the process, ensuring they can offer strong dividend payments. The target dividend yield (based off the1 000c listing price) is between 8% and 10% a year, offering the investor a strong yield and an alternative asset class that should experience less volatility due to the certainty of future earnings. Due to have listed on 29 April, the listing has been…

the last year has changed everything as we lived through the first major pandemic in more than a century. For many it meant a very tough year as incomes and lives were lost. This is our reality as a society and even as vaccines are rolled out, the effect of the 2020 pandemic will impact on individuals and communities for a long time. In the business space we have also seen devastation as companies went into business rescue; some, such as Comair, managed to survive with new shareholders. Others have had to make do with little, or in some cases, zero revenue for protracted periods of time, putting massive strain on cash flows and balance sheets; not to mention debt commitments. Some sectors will likely never return to how things…

following the release of Steven Spielberg’s hit film Jaws in 1975, the 1978 sequel, Jaws 2, had one of the most famous taglines ever: “Just when you thought it was safe to go back in the water”. I’ll try to not give too much away, in case anyone hasn’t seen these yet (spoiler alert), but after the massive shark stalking a seaside village is “defeated” in the first movie, the danger returns just as people started to feel safe again. Just over 12 months ago (23 April 2020) we saw the rand trading at over R19 against the US dollar for the first time in history. About a year later, it now trades closer to R14 for a dollar, and some are saying that the period of strengthening may be…

costs matter. The amount you pay in fees when buying or selling is just as important as the total expense ratio (TER) of a unit trust or exchange-traded fund (ETF) that you invest in. The question is when do we let these costs influence a decision to buy or sell? Ideally, you want the transaction fee to be below 1%, which includes the brokerage and all taxes. With many stockbrokers having minimum brokerage rates, this means we need to invest a minimum amount to get the effective rate. My broker charges 0.5% per trade, but the minimum requirement is R22 000 per transaction to get that brokerage. Some brokers, such as Easy Equities, have no minimum investment requirement, making this point moot. But for the rest of us, we need…

president Cyril Ramaphosa constantly emphasises the importance of investing in infrastructure in South Africa and has launched numerous initiatives such as the infrastructure fund to promote investment in this sector. Business Leadership South Africa (BLSA) agrees on the importance of this and emphasises the great potential of partnerships between the state and the business sector, but mentions that much more could be done to create opportunities for the private sector to invest directly in infrastructure. The National Development Plan’s target to invest 30% of GDP will ask vast investments from the private as well as the public sector. At the moment we do not see this; on the contrary, according to BLSA, investment levels have dropped over recent years and that is why they have launched an Intellidex study, and…

on 5 June 1947, US Secretary of State George Marshall announced the European Recovery Program (later known as the Marshall Plan) in a famous commencement address at Harvard University. He said that it was “logical” for the US to do whatever it could to restore the region to economic growth, “without which there can be no political stability and no assured peace”. The plan, funded by the US government and administered by a Europe-wide commission, spent $13bn over four years and engendered the highest rate of economic growth (about 35% per year) in European history. When the work of the plan was finished, the economies of every Western European country had not just returned to pre-war levels of growth and economic development but surpassed them. Ever since, the Marshall Plan…

– US President Joe Biden made a claim during his first address to Congress that the economy has gained some 1.3m new jobs in the first few months of his administration — more than in the first 100 days of any presidency. The BBC reported that he quickly pivoted to the need to pass his American Jobs Plan if the country is going to sustain momentum and get back to the historic low levels of unemployment before the pandemic. Since January, the US economy has added 1 384 000 jobs, according to the US Bureau of Labor Statistics.…

Sasol’s willpower is finally paying off after its Lake Charles Chemicals Project in the US and volatile oil prices bled the company dry over the past two years – its share price plummeted to an astounding 2 075c/share all-time low last year from a high at 65 300c/share. In a most recent announcement, the petrochemical giant cited that its headline earnings per share would improve by at least 20% for the year ended June 2021 compared with the headline loss per share of R147.45 a year earlier – despite hurricanes disrupting its US-based business and as oil prices recovered. Last year Sasol embarked on an overhaul in strategy to mitigate the impact of Covid-19 and record low oil prices through deleveraging measures together with a reset of its approach. How…

the role of fixed income in multi-asset portfolios is evolving with the unprecedented levels of market volatility we have seen this year, and it is hard to think of a better time to rethink fixed income. In today’s fixed-income markets, investors face increasing pressure to deliver returns, generate yield and maintain diversification. To do so, we believe there is a need to move beyond the outdated “active first and only” fixed-income approach and consider indexing and fixed-income ETFs. The best way to understand just why ETFs are suitable, is to consider how they can help address the main challenges in today’s bond markets. We see four big challenges. Resilience through diversification Firstly, the endless search for yield has reduced resilience. As yield becomes increasingly scarce, investors are allocating to riskier…

PICK N PAY Sales hit by bans Pick n Pay’s results for the year ending February, released on 21 April, were pretty much all about the lockdown, including the early hard lockdown. As such it was liquor and tobacco sales that were down 31% and being a high-margin part of their business, this really hurt the profits. Aside from this, the grocer’s results were solid, the operating margin was a strong 2.9% considering the loss of high-margin sales. This was CEO Richard Brasher’s last set of results and while the turnaround started slowly, ultimately I would consider it a huge success. Not only did he regain margins, he also expanded their lower-income Boxer brand, which is now well-positioned as an important part of the overall business. ALTRON Huge value in…

Jackie van Niekerk put herself through university, obtaining a BCom degree at the University of Pretoria. Now 39, she is married with two young children, aged seven and two. “There’s a saying about mom guilt that goes something like this: ‘you take the baby out and put the guilt back’. It’s something I work on. But you can be a mom and a career-led woman.” Her success, she says, comes from family support, in particular her husband. She is cognisant that he, too, has a career. “It can’t be all about me, my career and my husband supporting me. That’s unfair. It’s also about supporting my husband in his career.” An avid reader, she sometimes reads through the night. Currently on her bookstand is Barack Obama’s A Promised Land. She…