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The winds of change are blowing in Saudi Arabia, carrying the potential to dramatically shift the investment climate there. One of the most anticipated financial events in the Middle East region seems as if it could finally come to pass in the near future — the opening of the Saudi Arabian stock market to foreign investors.
The debate between active versus passive investments has been a debate which is turning out to be a mainstay of the South African investment space. While government is adamant that it is advising fund managers to adopt a passive investment strategy, the recent performances of the JSE index has put forward a serious case for active investment.
The recently launched Adjusted Big Mac Index* shows that the South African Rand is currently one of the most undervalued currencies in the world. The Adjusted Index – which addresses the criticism of the original Big Mac Index assumes that the average burger prices to be cheaper in emerging countries than in developed ones because labour costs are lower – shows the Rand is undervalued by 23.6% against the Dollar.
It is a well-known characteristic of most stockmarkets, that have relatively high degrees of efficiency, for some 70% or so of active managers to fail to beat the performance of a comparable benchmark index, over time. This holds true for the South African equity market as well, which etfSA.co.za and other researchers have pointed out regularly.
The strongest deterrent against FSP compliance missteps is or should be: