It has been almost three decades since the African National Congress (ANC) came into power. Our job, as economists, is to interpret the economic results of their actions, or, in this case, the lack thereof. To do this, we try to determine how the decisions of the ruling party, in aggregate, impact on the economy and, by implication, on the livelihoods of South Africans.
Elevated levels of inflation and higher interest rates recently spooked the financial markets while the world watched with bated breath as Russia invaded Ukraine. These are two of the many factors that are currently affecting the global economy and markets.
Most South African investors know that they need to include global exposure in their portfolios, and that they should increase their exposure if they already have it. There are, however, many considerations, such as different asset classes and available investment options.
How do you create wealth? It’s not a new question and still it remains complex, even for people in the financial industry. As global investment specialists, we assist entrepreneurs in making better asset allocation decisions about their estates. Our job is to grow wealth and to protect it.
Until the early 2010s, South African investors had a strong bias towards investing in local markets. Offshore markets were generally perceived to be too far away and too inaccessible to consider.
During the first week of May, the Federal Reserve (Fed) in the United States (US) increased interest rates by 0.5%, the first time since 2000. Later, during the last week of the month, the South African Reserve Bank (SARB) followed suit.
In a daring move, the South African Reserve Bank (SARB) last week decided to increase interest rates by 0.5%, despite the pressure that it will undoubtedly place on South African consumers. Although 15 out of the 24 analysts that were surveyed, expected a 0.5% increase, I cannot help but wonder if it was not a little too much.
Benjamin Franklin said that “in this world, nothing can be said to be certain, except death and taxes”. This quote applies to most countries, as it does to South Africa. Death and taxes go together in the form of inheritance tax. Personal tax is levied on the income that a deceased person received before their death in the current tax year, whereas inheritance taxes are levied on what they leave behind in their Will in the form of estate duty.
Following the severe floods in KwaZulu-Natal, many companies have suspended their operations to recover and to restore damaged equipment and infrastructure.
In the past week uncertainty caused volatility in global stock markets to drag on. Uncertainty about war, commodity prices, inflation, interest rate increases, lockdowns in China, global economic growth, and the likes, are all keeping investors, and the markets that they represent, both nervous and restless.
