VICTOR MPHAPHULI: Topsy-turvy times call for sober investments and a long view
Defensive strategy needed as local landscape wobbles and global scene shudders and shifts
Investors are in the midst of a tumultuous time, locally and globally, politically and economically. A unique combination of important local and international events over the next few months are set to materially change the South African economic environment. The ANC elective conference, the future of quantitative easing and the implications of Brexit are among the events that could change the investment landscape. Investors should consider viewing this as a time to be defensive, not judging each event in isolation but waiting until the sum of the parts can be reviewed in its entirety. We share investors’ concerns about the direction of markets, continued foreign investment and SA’s impending credit rating reviews. The medium-term budget policy statement was a shock update of SA’s fiscal affairs, with almost every aspect of the government’s finances deteriorating sharply. Stanlib’s chief economist, Kevin Lings, identified three key factors: one is a decline in tax buoyancy as the go...
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