Indholdsfortegnelse for 7/23/2021 i Finweek - English

the story of destruction and renewal is as old as the human race. In Nordic mythology, it is known as Ragnarok. It’s the moment that all the ice and fire giants (let’s refer to them as scoundrels) unite against the gods (the good guys) and go head to head in the biggest battle ever. The end result of Ragnarok is that the world is under water. When the water recedes, there are only two people left who repopulate the world. We also see this destruction and renewal in the Biblical tale of Noah where the whole planet is under water and then repopulated by a handful of chosen ones – with the aim of less sinfulness. If we move from mythology to history, there are many examples of devastation and…

“EFFORTS TO BRING THE GUPTAS BACK HAVE INTENSIFIED.” – Hermione Cronjé, head of the National Prosecuting Authority’s investigating directorate, said that Interpol has issued red notices for two Gupta brothers wanted in connection with alleged corruption. Atul and Rajesh Gupta, their wives, and four other people were issued with notices. According to Interpol, a red notice is an alert to all Interpol member states that an individual is a wanted fugitive. Although a red notice does not equate to an international arrest warrant, it can be used to support extradition requests. The United Arab Emirates ratified an extradition treaty with South Africa this year. “The world is ready to end the global race to the bottom on corporate taxation.” – US Treasury Secretary Janet Yellen said there is broad consensus…

in line with its value chain master plan, the sugar industry plans to come up with specialised services and products, including sustainable aviation fuels (SAFs) forvisiting jets that have to refuel once they have touched down in Johannesburg, CapeTown or Durban. This is according to Richard Nicholson, who was an SA Cane Growers panellist in an Agri SA-Farmer’s Weekly webinar recently. Since a sharp drop in sugar sales within the Southern African Customs Union in the 2017/2018 season, the industry has made slow but steady progress to regain lost ground. The industry’s attempts to bolster demand came amidst the introduction of a “sugar tax” in 2018, which made sugar roughly 200% more expensive for the sweetened beverage manufacturers, who then switched to artificial sweeteners. Moreover, the local industry had to…

The Satrix China Exchange-Traded Fund (ETF) listed just a year ago and at the time there were lots of excitement about being able to get direct exposure to the Chinese stock market. But a year later it trades 7% lower than its listing price and almost 25% off highs it reached in February this year. This has resulted in many readers emailing me asking what to do. The short answer is that ETFs are long-term investments, and one should not worry. The Chinese government has been cracking down on the nation’s large technological companies, sending share prices lower, but this will not be an issue forever. So, ignore this and ask yourself about China in ten years’ time. Will they be an even larger economic powerhouse? Will these tech companies…

i know I have mentioned this a few times over the course of the last year, but these are very strange times we find ourselves in. The Covid-19 pandemic hasn’t just played havoc with many investors’ finances, but many of them have been forced to withdraw from their retirement savings in, for example, the form of a preservation fund, just to survive. They know they must somehow replenish their retirement savings, but a more pressing question these days is, “How much do I need to retire comfortably?” Expected monthly income Let’s start at the beginning. In this case, it will be the amount of money you need to live off right now. Many experts recommend that you use 80% of this amount as a benchmark for what you will need…

the recent growth in South Africa’s economy, which defied IMF predictions, can be attributed to global demand for resources linked to infrastructure-led recoveries and pandemic-related decompressions around the world which have led to high commodity prices. This, coupled with a bumper agricultural export performance and the added benefit of Covid-19 relief grants, have helped the economy recover off what was arguably a low base. It is important to understand that this growth is partly the result of pent-up demand which accumulated during 2020. The big question in the next few months is whether this short-term growth can be translated into long-term sustainable momentum. One of the most significant risks to the country’s economic recovery continues to be the Covid-19 pandemic, including the Delta variant currently driving SA’s third wave of…

a call by President Cyril Ramaphosa to calm widespread unrest in KwaZulu-Natal and Gauteng following the jailing of former president Jacob Zuma wasn’t enough to stop thousands of looters, many opportunistic, to attack and pillage businesses in South Africa’s two most populous provinces. Especially small businesses, many of which are owned by foreigners, bore the brunt of attacks linked to supporters of the former president, now a criminal. “The Small Business Institute strongly condemns the wanton looting of businesses, destruction of vital economic infrastructure, burning of trucks and blockading of roads, primarily in KwaZulu-Natal and Gauteng,” the institute said in a media release. The SA Chamber of Commerce and Industry’s CEO, Alan Mukoki, said: “There is no protest that involves breaking into a shop, removing TVs and fridges, damaging property,…

do a quick Google search, and you will discover that wine is one of the oldest industries on earth. A 2017 study by a team of archaeologists found evidence of wine-making in Tbilisi, Georgia almost 8 000 years ago. To put that in perspective, it is almost 2 000 years before humans domesticated horses, 2 600 years before we invented writing and 3 300 years before we built the first pyramid. What is more, Georgian winemakers today use largely the same tools and methods as their ancestors eight millennia ago. Hein Koegelenberg is CEO of La Motte Wine Estate, where the French Huguenot Gabriël du Toit planted the first vines in 1752. Why, I asked Koegelenberg, do we associate wine with timelessness? “Much of wine’s romance lies in its age.…

With over 60 real estate agencies competing for sole mandates across the country, it is near impossible for new agencies to break into the high-end property market. Julia Finnis-Bedford, owner of Amazing Spaces, a film locations company, and Andrew Dewey, managing director of a national property services company, have joined forces to overcome this barrier by expanding the Amazing Spaces offering into a lifestyle property investment division, called Amazing Spaces Lifestyle Investments. To qualify for the Amazing Spaces Lifestyle Investments portfolio, properties do not necessarily have to be upmarket or “luxury” but have to be unique to capture the new trend in buying after the pandemic. Dewey explains that being forced to stay at home because of the lockdown and the freedom to work remotely from anywhere in the world…

Transaction Capital is an investment holding company that operates as a non-deposit-taking financial services company. Its segments include SATaxi, WeBuyCars and Transaction Capital Risk Service. In September 2020, Transaction Capital concluded a transaction to become a 49.9% non-controlling shareholder in WeBuyCars and recently concluded agreements to increase that stake to 74.9% – subject to regulatory approval. To obtain that desired shareholding, Transaction Capital had to raise capital through an accelerated bookbuild. During the first half of July, SA’s biggest taxi financier announced that it has successfully raised R1.17bn in an oversubscribed bookbuild, with shares placed at R35.50 apiece – a 4.4% discount to the group’s share price at the close of trade on 8 July 2021. How to trade it: Since listing on the JSE in 2012, Transaction Capital’s share…

NEDBANK Work from home Nedbank announced a work-from-home (WFH) policy to be implemented after the pandemic. The bank expects 60% of staff to be on one of their campuses each day, relating to two days of WFH every week. We are seeing various companies locally and globally adopting different policies, with Apple at the extreme with only two weeks of WFH a year while other US technological companies are looking to adopt more flexible WFH schedules for staff. This means the death of the office has been greatly exaggerated recently, but it does mean lower demand for offices in the years ahead as there will be excess capacity in current space. QUANTUM FOODS Keep a close watch Remember a year ago when all the excitement was about Quantum Foods as…

the structural reforms that President Cyril Ramaphosa is currently introducing are a strong indication he is gaining an upper hand over left-leaning populists in the battle for control of economic policy formulation inside the ruling ANC. After taking over the reins of the ANC in December 2017, Ramaphosa made a raft of promises to tackle our country’s biggest bugbears – endemic corruption, a failing economy, and runaway unemployment. For a while he dithered, then stalled, on making good on his promises, to the disappointment of many South Africans who had bought into his message of “renewal”, “unity” and a “new dawn”. The murmurs of disappointment also extended to the investment community, which has been losing patience over the slow pace of policy reforms needed to breathe new life into a…

naspers* is a broad-based multinational internet and media group, with a 14% weighting on the JSE together with its spin-off Prosus. Naspers is Africa’s largest company by market value and most successful technology investment firm. It offers services in more than 130 countries, with its principal operations in internet communication, entertainment, gaming and e-commerce. Share price history Naspers was once the FTSE/JSE All Share Index’s top performer; it maintained a long-term bull trend which commenced in 2014. By 2015, Naspers had returned 82% over 12 months and was hitting psychological levels at R2 000 per share. In 2018 the share price had grown by over 440% and the company’s price-to-earnings (P/E) ratio was at a whopping 95 times. As upside momentum continued, concerns that Naspers was overpriced grew and investors…

markets have shown little fear in reaction to renewed revelations of vast personal wealth accumulation among the wealthy over the past decade. The Nasdaq has risen to an all-time high, Facebook hit a market cap of $1tr and Apple remains comfortably above the $2tr level. A new minimum global tax level of 15% for companies has been agreed to by 130 countries. This is lower than the 22% which has been calculated to offset any tax arbitrage, whereby a tax rate of 28% is levied in one country, say South Africa, as compared to 11% in another, say Ireland. And obviously, the country with the lower tax rate is preferred. Therefore, a rate of 15% may not be as effective as hoped. The reality is that the global tax system…

adapt IT is currently the subject of a bidding war between JSE-listed Huge Group and Volaris, the subsidiary of a Canadian company called Constellation Software. We own Constellation Software in our funds on behalf of clients and we believe that the share is worthy of consideration for those investors looking to allocate capital to offshore equity portfolios. Constellation Software focuses on acquiring what it terms “vertical market software businesses”. These software businesses are in a variety of “vertical markets”, from marine asset management to catering and parking. Constellation has a fantastic long-term track record. The share listed in 2006 and has compounded at a rate of more than 40% per year between 2010 and 2020. This was driven by good operating performances. Earnings per share (EPS) grew at a compound…

finweek asked Pranita Daya, real estate analyst at Anchor Stockbrokers, to weigh in on the subject of listed property companies’ debt levels. The listed property sector has been experiencing the challenge of balance sheet pressures. These include elevated loan-to-value (LTV) ratios, which were exacerbated by property value devaluations over the past year, as well as significantly lower interest cover ratios due to pressure on earnings from rental support provided to tenants, aside from an overall tough trading environment. Many Reits, says Daya, have made substantial progress in terms of decreasing (and managing) their LTV ratios, mostly through disposal programmes and retained earnings. A few stocks, like Growthpoint Properties and Equites Property Fund, have completed equity raises, however most counters have opted to steer away from this option given the deep discounts…

“In good times, at the top of the cycle, supply is tight and contracts are written with good margins and beneficial terms for construction companies. When the cycle turns, however, companies in need of work will begin to accept poorer terms and more challenging projects that carry greater risk of default. In construction, it matters a lot at what price you sign the contract,” says Ninety One’s Andrew Joannou. “If you price incorrectly, falling foul of stipulations can hobble the company – you can lose money on the contract quickly. Traditionally, a company like WBHO wrote good contracts and knew how to price up front. Getting that calculation correct and implementing effectively meant customers were happy,” he adds. To be fair, says Joannou, the catalyst for mistakes in managing risk…

Fighting for w(right)ing This issue’s isiZulu word is amalungelo. Amalungelo is rights. The singular is ilungelo. Just the other day Facebook violated my amalungelo by limiting my posting abilities. I have no idea what I did wrong to have them violate my amalungelo like this. As such, I will be hosting a press conference where I will address the nation. There will be snacks and tea, but they will be for me, as the press conference will be virtual because I follow Covid-19 protocols. This violating of my amalungelo willy-nilly shows that the leadership of Facebook has a hidden agenda. Hidden in plain sight. But because it is hidden, I don’t know what this agenda is. Yes, I said it is hidden in plain sight, but it is still hidden.…

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