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The offshore conundrum for SA investors

27 September 2018 | General

The recent announcement that South Africa has officially entered a recession, following two consecutive quarters of negative growth, appears to have largely reversed the optimism that took hold of the country following the change in leadership at the beginning of the year. While the global economy will likely retain above trend growth rates into 2019, concerns have risen over increasing threats of a global trade war, alongside pockets of emerging markets stress in the face of gradual policy tightening from the Fed. This current state of affairs has prompted increased interest among many South Africans in offshore investment.

Futuregrowth the only institutional investor in SA’s first ECD social impact bond

27 September 2018 | General

Specialist investment company Futuregrowth Asset Management, acting on behalf of client funds, recently concluded an investment in the Impact Bond Innovation Fund (IBIF), a South African outcome-based financing mechanism that seeks to improve early childhood learning and development (ECD) outcomes in the Western Cape.

Moving up in credit quality for better durability

26 September 2018 | General

Some investment-grade bonds are riskier than their ratings imply, while high-yield bonds have seen some positive tailwinds. Meanwhile, a large number of bank loan agreements now favor borrowers over lenders. Franklin Templeton Fixed Income Group’s Glenn Voyles, Marc Kremer, Matt Fey, Brian French and Reema Agarwal take a look at these areas of credit landscape today. They explain how credit research and long-term orientation helps them discern cash-flow durability in the companies they analyze and outline how they negotiate for better terms in credit agreements.

The end of quantitative easing

26 September 2018 | General

Re-pricing of risk has proved to be a theme for 2018 as central banks gradually reverse conditions that underpinned the risk-seeking behaviour of the last decade. Cracks in the system became apparent in the US funding market in January with the widening of Libor-OIS spreads. This was followed by a volatility spike in February, that catalysed a sharp equity market sell-off and the complete meltdown of popular strategies that bet on low volatility. While these events might appear to bear little significance in the broader scheme of things, we believe they embody symptoms of less accommodative global financial conditions - which underscored the US Dollar’s resurgence in the second quarter of the year.

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