Latest Blog posts
It is often said that a currency is like a country’s share-price. Investors push up the value of a share if they have confidence in its long-term performance. There are many outside factors that effect currency values, but in general a currency will strengthen (or at least remain stable) when an economy does well, and weaken (or become less stable) when it performs poorly.
When it comes to its credit rating, SA had been circling the drain for some time before Standard & Poor's Global Ratings eventually pulled the trigger after the firing of Pravin Gordhan as Finance Minister. Fitch Ratings followed suit soon after. The third...
The issue of increased controls placed on foreign exchange transactions by the SA Reserve Bank is not only of concern to investors and business in general, but also a cause of great anxiety amongst Expat South Africans who still have investments back in the country....
Professional managers refer to upside versus downside when it comes to the management of investment risk. Probability. Confidence. South Africa has undoubtedly arrived at a political crossroad, and each investor needs to take stock of their financial interest in the...
A number of commentators – including local politicians and labour unions – have sought to apportion blame on the South African Reserve Bank for the state of the SA economy and the value of the SA currency. Is this a fair assessment? What tools do the SARB have at its...
I love South Africa. Charles and I maintain properties there, and we frequently visit. But I find myself in the company of many who are increasingly alarmed by the direction SA is heading. Newspaper and television headlines about state capture and the deteriorating value of the currency is a constant reminder that all is not well. International ratings agencies, the World Bank and the IMF are also concerned. Sporadic good news – such as the recent election of a new ANC president – provides temporary hope, but the long term prognosis remains bleak.
Politics, poor leadership, corruption, mismanagement, lack of policy, low growth, unemployment, high crime, labour unrest, disastrous education system; these are all problem areas that have long been identified with SA. What’s new is the soaring deficit: too high spending on a bloated, inefficient and corrupt government, whilst tax revenues are dwindling. How will the authorities respond to this crisis?
The three “Venezuela concerns” of SA expats are:
Tax increases on assets that will affect non-residents (we have already seen capital gains taxes raised!
Prescribed investments by captive investment funds including pension funds, to shore up government and SOE borrowing (Transnet, Eskom, SAA?)
Tighter exchange control regulations to prevent funds from leaving the country, either via reduced allowances or penalties (Remember the 80’s?)
If SA follows the Venezuela spiral, then the future ability to get one’s investments out of the country could diminish rapidly.
My aim in this section is to post selected information that is current and relevant to expats – the economy, the Rand, etc. There is a blog on specific subjects on the left hand side and curated media articles on the right. Do let me know what you think, and if there are specific topics that you would like to see covered.