Market Forces Articles

  • At the crossroads, Gordhan maps out a path for growth
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    Budget 2017: At the crossroads, Gordhan maps out a path for growth
    anemptytextlline
    23 February 2017
    There were no surprises in Budget 2017 relative to pre-Budget expectations, which maps out a credible path to the stabilisation of the government debt ratio over the medium term. Importantly, government revenue is projected to exceed non-interest spending on the Main Budget by 2018/19. The consolidated budget deficit narrows from -3.4% of GDP in 2016/17 to -2.6% of GDP in 2019/20, while gross loan debt, which investors must fund, is expected to peak at 52.9% of GDP in 2018/19. Meanwhile, the net debt ratio (gross loan debt adjusted for government’s cash balances) is expected to increase to 48.1% of GDP by 2019/20 from 45.5% of GDP at the end of the current tax year. The importance of stabilising the debt position is illustrated by the continued sharp increase in Main Budget debt service costs on this debt from R146.3 billion in 2016/17 to R162.4 billion in 2017/18. This is absorbing scarce resources, which could be used for development expenditure.
  • the highs and lows for investors
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    Budget 2017: the highs and lows for investors
    anemptytextlline
    23 February 2017
    As with last year’s Budget speech, Minister Gordhan showed just how many avenues are in fact available to him for increasing tax revenue. This year the bulk of the additional R28 billion, which he stated in the MTBPS he would need to raise in 2017/18, could – without deeper investigation - be called ‘wealth taxes’. Addressing inequality among South Africans appears to be top of the minister’s agenda.
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    Market update: January 2017
    anemptytextlline
    14 February 2017
    The year 2017 started with world leaders decisively executing on voters’ wishes. And on the European continent there are signs of economic recovery, even if it’s happening slowly. Locally, inflation has accelerated further and political tension is mounting. But despite this, the major market indices are all up.
  • SIM Balanced Fund
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    SIM Balanced Fund: the best of both worlds
    anemptytextlline
    3 February 2017
    ‘We live in a world with very low interest rates, which are likely to cause very low returns from global bonds and which have changed the pricing levels on all alternative asset classes,’ says Frederick White. It is also a highly indebted world. How did we get here? And going forward, how do we attain the best of both worlds: long-term growth together with short-term protection against downside risk? Fred White, the co-manager of the Sanlam Investment Management (SIM) Balanced Fund, shares how the fund is positioned to provide investors with yield in a risk-off environment.
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    Market Snapshot: December 2016
    anemptytextlline
    19 January 2017
    Locally, the most anticipated event for December, was the potential downgrade of SA debt by ratings agency Standard and Poor’s (S&P). In the end, S&P kept the foreign currency debt rating at one notch above sub-investment grade, but downgraded the local currency debt to BBB, still two notches above junk.
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    Events that moved the market 2016
    anemptytextlline
    8 January 2017
    We have summarised the main events that moved the markets – locally and globally – through-out the year 2016.