Innholdsfortegnelse for 10/08/2021 i Finweek - English

as I opened my emails before writing this, one (of the many) press releases that awaited my attention was about the “dawn of a cashless future”. I have some deep reservations about this utopia where money is transferred through watches, cards, taps and whatnot. Please hear me out. In this edition’s Collective Insight, the many facets of debt are explained succinctly by experts. An article that wasn’t submitted, and a topic which was brought up during an advisory committee meeting of Collective Insight last year, refers to a simple psychological notion of humans: seeing and touching is believing. What one of the committee members mentioned back then was that people are disconnected from their money due to the ease of paying for stuff and services. The premise is simple: If…

imagine that your next job interview is with an artificial intelligence (AI) recruiting platform. It is a virtual meeting and the computer-generated person on your screen looks as life-like as you could imagine. It displays all the emotions and facial expressions that you would expect from a real person. You feel comfortable as it expresses empathy and even laughs at your jokes. If it only knew that you crack jokes when you are very nervous. For all you know it already does. During the interview, a vast number of data points are being analysed. Facial recognition technology scrutinises your micro-expressions to determine potential signs of deceit. The algorithms in the background determine a baseline on your behaviour – like with a polygraph – to figure out how much anxiety and…

clicks is a provider of health and beauty merchandise and is the largest retail pharmacy chain in South Africa. The company also owns the pharmaceutical wholesaler United Pharmaceutical Distributors (UPD). Share price history Clicks’ share price gradually appreciated from a low at 1 115c/share after acquiring 60% of Direct Medicines for a cash payment of R13.2m in 2008. The group then assumed control of all Medicross pharmacies on 1 December 2016 and 45 retail front shops of the Netcare hospital division on 1 February 2017 – its share price surged to a high at 22 220c/share. Through a series of good financial results and impressive growth, Clicks’ share price tested a high at 28 115c/share in December 2020. The group’s share price subsequently formed a new high at 31 165c/share…

debt is bad and should be avoided at all costs. Never go into debt. Debt is wrong. These are phrases that we have all heard before. However, what if this is incorrect. Wait, maybe not incorrect but taken out of context. What if the correct use of debt can not only benefit someone (for instance helping a newly married couple get on the property ladder) but also helps grow the economy, and may be good for society? Look, do not get me wrong, debt, like any financial product, when misused can be catastrophic; one just needs to read Denis Diderot’s essay “Regrets on Parting with My Old Dressing Gown” to understand that. However, having the correct lens when we have conversations about debt is important. In this issue around debt,…

On a scale of zero to ten: How sexy do your wheels make you feel? Here is the key to your answer: 1–3: I feel super sexy. I get an adrenaline rush everytime I am (seen) in it. 5–7: I feel cool, I can get to where I want to be, and it oozes my independence. 8–10: I don’t attach myself to material things. My car does its job, it’s reliable – that’s all I need. If you answered: 1–3: You are wondering why your number on the scale is not larger and why your car is so small! 5–7: You are wondering whether to change your answer to be hotter, you are that cool. 8–10: You are not status-conscious and are comfortable in your own skin. And a handful…

While we often focus on the dangers of too much debt, debt is necessary for a healthy modern economy to grow through consumerism. Just mentioning the word “debt” instils fear in many consumers. No one wants to be in a position of owing money, yet reality dictates that in some way, we’ll always owe money to someone due to the realisation that we can’t all afford to pay for everything in cash. There will always be cars and houses to pay for, and with many client portfolios, we need to consider the gearing principles which allow for good debt. There are many forms of debt, but I want to focus on the three main principles of debt, being the good, the bad and the ugly debt. If it comes down…

i have discussed the concept of danger pay on a few previous occasions. Basically, this term was mostly associated with soldiers who were required to work in very dangerous areas. These days it can even include special types of insurance benefits against events like kidnapping for families whose occupations require them to relocate to areas where the risk of abduction is high. Whatever the package entails, in essence it refers to extra benefits or compensation for people who are risking their lives to work in dangerous places, amongst other things. Many individuals find these benefits extremely attractive, but it’s crucially important that whoever considers them is aware of the associated dangers. In most cases, workers must be willing to pay with their lives in exchange for a few extra thousand…

the Index Card is a popular personal finance book, first published in 2017. Its thesis is simple: Buy an index fund – like the ALSI Top 40 – rather than paying the fees of asset managers, who in the long run rarely outperform the market. I asked Nico Katzke, head of portfolio solutions at Satrix, why we should not all follow The Index Card’s advice and go for passive rather than active investing. “The debate has often been framed, wrongly in my opinion, as either active or passive. In reality, both have their place. Active managers have an important price discovery role to play and preserve the ability to outperform indexes. Index-tracking funds, often referred to as passive funds, provide investors with a low-cost alternative, while tracking indices that have proven…

Caxton& CTP Publishers and Printers’ results forthe yearthrough 30 June, released on 20 September, saw headline earnings per share (HEPS) more than triple to 75.4c. Of that amount, 50c will be paid as a dividend. Caxton has no debt and about R2bn cash. It also has a 31% stake in packaging company Mpact worth almost R1.5bn while the Caxton market cap is around R3bn. Traditionally, Caxton has operated in printing of community newspapers and The Citizen, as well as magazines for third parties. They exited the magazine business last year. The newspapers generate advertising income and are very much linked to the South African economy. Caxton is moving towards becoming a packaging company with much better potential. They’re interested in increasing their stake in Mpact to a controlling stake, which…

if you watched The Matrix, you know that there is no reality – there is only perception. What we don’t all know, however, is the fact that the language we use shapes our perception of the world as well as our behaviour and actions in reaction to that perception. I’m Ndebele. IsiNdebele is the first language I spoke. I then learnt English in preschool. In high school, I learnt French. Due to an interest in a boy, I learnt a smattering of Setswana. While I studied law, I learnt enough Latin to do well in my exams. I learnt that many English words are rooted in French and Latin. Because of the people I’ve worked with, I also learnt enough Afrikaans to participate in meetings, and I’m now fluent in…

the financial instructions emanating from the ivory towers of the financial industry of “save more” and “put money aside to invest” is, at best, oblivious to the financial reality that many South Africans live with every day. And at worst, ignorant. Of course, this advice comes from the best intentions to ensure that people – from all classes – have a financial foundation that is strong enough to withstand any economic storm. That is, when the economic storm is felt by all classes. The issue lies in misunderstanding the reality of when it is even possible to put money aside. What may seem like enabling financial conditions to save for you may not be enabling to someone else. The luxury of having enough money at the end of all your…

although South Africa has Africa’s most developed financial system, the country faces a worsening household debt problem which is affecting the financial wellbeing of many families. While responsible credit access helps households to acquire assets and supports economic growth, there are unintended negative consequences when people are overindebted. These include lower savings, pressure on disposable income and the risk of retiring without an adequate financial buffer. An important number to consider, for every consumer, is their credit rating. Why you should know your credit rating Your credit score is a number, usually between 0 and 999, which represents your use of credit and your financial conduct. Companies that extend credit use your credit score to see how likely you are to repay loans and if you are at risk of…

SPUR RocoMamas performing well Spur released good financial results on 23 September for the year ending 30 June with headline earnings per share (HEPS) 33.1% higher even as revenue dropped 10.5%. While this was year-end results, Spur did not pay a dividend, opting to rather pay an interim deferred dividend for the 2020 financial year. They had declared a dividend last February but as the pandemic started, they elected not to pay and will now be paying the 78c per share. Despite hard lockdowns and fears of a fourth wave, they did well with RocoMamas the top performer. This is not a surprise as it can more easily work around lockdown restrictions. Overall, the group is well-positioned with good brands. With an historic price-to-earnings ratio (P/E) of around 17 times,…

It’s hyena season This issue’s isiZulu word is impisi. Impisi is a hyena. When you hear a hyena laugh, never think it’s coming in peace – it will be true to its nature, wanting to sink its teeth into your flesh. Yes, I am talking about elections campaign season. To truly demonstrate how South Africans feel about election campaigning and political campaigners with toothy smiles, wanting a piece of us, I’ve reworked the Nightmare on Elm Street theme song. 1, 2, impisi’s coming for you 3, 4, better lock your door 5, 6, buy a crucifix  7, 8, gonna stay up late 9, 10, never sleep again 1, 2, impisi’s coming for you 3, 4, there’s a knock on the door  5, 6, grab your crucifix 7, 8, it’s too…

“THEY NEEDED TO GET INVOLVED MUCH EARLIER.” – Tshifhiwa Tshivhengwa, CEO of the Tourism Business Council of South Africa, criticised the SA government for not acting swiftly on the UK’s decision to keep SA on its red list for travel. The UK said it kept SA on the red list due to concerns over the Beta variant of the coronavirus. Tshivhengwa told Business Times that the High Commission should have immediately initiated negotiations with the relevant government departments in the UK and organised a coordinated SA response. Had this been done from the start, SA would not have been blindsided by the UK’s “ill-informed fears”, he said. “China … will not build new coal-fired power projects abroad.” – China’s president, Xi Jinping, announced that the country would not build new…

government has been silent about a proposed export levyon chrome ore since hatching the idea in October last year. According to proponents of the levy, making chrome ore more expensive for Chinese ferrochrome producers will benefit the local ferrochrome sector, which is struggling to make money owing to Eskom’s prohibitive, above-inflation energy tariff increases. The chrome ore industry, through ChromeSA, has hit back forcibly. It first described the proposal as “egregious” but failed to win exemption from theCompetition Commission that would have enabled it to discuss alternatives to the export tax. All eyes now fall on the country’s medium-term budget policy statement, which has been tabled by newly appointed finance minister Enoch Godongwana for 4 November. The hope is that Godongwana provides more clarity, although ChromeSA is hoping it can…

Rand Merchant Investments (RMI) is a listed financial services investment holding company. It owns brands likeOUTsurance in SA, UK personal insurer Hastings and othercompanies globally. In September, RMI announced plans to unbundle its large stakes in Discovery (currently25%) and Momentum Metropolitan (currently 27%) to its shareholders. Why the unbundling? The main reason is to unlock shareholdervalue by shrinking the discount at which RMI currentlytrades to its primary intrinsic value. This will allow RMI to focus on property and casualty insurance. The unbundling is intended to also facilitate a R6.5bn rights issue to help RMI tackle its R11.8bn debt. The unbundling will most likely be concluded by end-June 2022 and the rights issue will be implemented before the unbundling – shareholders are scheduled to approvethe rights issue in November. How to…

Video streaming is a fascinating business opportunity for investors for two reasons. First, video streaming’s addressable market is huge, suggesting the possibility that those companies which succeed in this sector will enjoy extensive growth. Second, it is an industry in which scale matters, so those dominant companies should be able to offer more content to consumers whilst spending less than their competitors. In this article, we examine these two dynamics. We find an industry that is still relatively far from maturity, and we also see the importance of scale and how it has led to increased consolidation within this sector. The global addressable market for over-the-top (OTT) video streaming is large. There is estimated to be between 800m and 900m broadband or pay-television households globally, outside of China. Several companies…

money dealers during the Renaissance banking boom of the 16th century in Florence, Italy operated from a table or bench known as a “banca”. Running out of money would soon attract the attention of the authorities, who would seek out irresponsible dealers and break or “rottura” their table, loudly decrying the dealer as “banca rotta!”. Quite literally breaking the bank. To this day a person pronounced in law unable to pay his or her debts is declared as “bankrupt”. A stigma with an associated social and psychological burden. A recent meta-analysis conducted across the UK, US and New Zealand confirmed links between increased levels of debt and long-term mental, psychotic disorders, depression, suicide attempts, problem drinking and drug dependence. It doesn’t end here. There are also societal costs to pay…

the problem with debt, and the reason so many people struggle with debt for a lifetime, is that its impact on one’s financial situation is insidious. It’s not obvious how damaging it is just by looking at any single loan in isolation or the rate of interest on that loan or even the affordability of the monthly repayment. The financial slide backwards is gradual but incremental. To gain a clear appreciation for the stealthy but substantial impact of debt on a person’s overall financial wellbeing, it’s necessary to consider an extended period. To illustrate the point, consider two friends. To intuitively identify who is who, we’ll call them Borrow and Save. Borrow and Save are identical in almost all respects – they earn the same salary, they get the same…

in 2011, three years after the Global Financial Crisis, a rather remarkable publication reached the commercial bookshelves. The book was called Debt, The First 5 000 Years. What made the book a “must read” was that it looked at the issue of debt from a totally different perspective: that of an economic anthropologist with a keen interest in how the concept of debt has evolved in societies around the world over the last 5 000 years. But David Graeber was more than just a noted academic who taught at both Yale (until he was denied tenure) and the London School of Economics. He also had become one of Time Magazine’s 2011 Persons of the Year for his role in nudging Wall Street towards what he called “a fresh vision for…

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