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The 10 key themes investors must not ignore in 2017

11 April 2017 | General

Global macro indicators are currently strong, with a clear cyclical recovery underway in most regions of the world. In particular, industrial and consumer survey data in the US is extremely positive. However, we are cognisant expectations are high for a continuation of this economic strength, which is currently underpinning risk assets.

After the downgrades

11 April 2017 | Economy

South Africa experienced tremors of the seismic, political and economic kind over the past two weeks. A few days after the midnight Cabinet reshuffle in which Finance Minister Pravin Gordhan and his deputy were replaced, S&P Global Ratings cut South Africa’s sovereign credit ratings. Foreign currency bonds are now rated BB+, while local currency bonds are still investment grade at BBB-. The outlook on both ratings is negative. Fitch followed suit, cutting both foreign and local currency bonds to BB+, but with a stable outlook. Moody’s has postponed its ratings announcement by one to two months. In other words, the much-feared drop to junk status has finally arrived. This is undoubtedly a negative development for South Africa, but there are also several misconceptions around the implications of a ratings downgrade.

How much is enough to hold offshore in 2017

10 April 2017 | General

Representing less than one percent of the global economy and expecting less than 2% growth in GDP per annum over the next two years, the South African economy appears unlikely to offer local investors the chance of decent returns, which remains hindered by socio-political and economic factors. To mitigate the risk of over-concentrating assets domestically and increase their potential for greater and diversified returns, high net worth investors are increasingly taking advantage of their R 11 million allowance to invest outside of South Africa.

SA post downgrade – has the sell-off stabilised?

10 April 2017 | Economy

The downgrade by Standard & Poor’s (S&P) of SA’s local currency by one notch to (BBB-) and it’s foreign currency debt to (BB+), one level below investment grade, has long been anticipated by markets, and was largely priced in by the time of the announcement on Monday 3 April.

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