STEPHEN CRANSTON: Surprising silver lining
Most pension fund members should be celebrating rather than feeling depressed when the rand falls
It’s common knowledge that the companies on the JSE are exposed to international earnings to a large degree. But I hadn’t appreciated how little a conventional balanced fund relies on a growing SA economy. Dave Mohr, the chief economist at Old Mutual Multi-Managers (the old Symmetry) says its balanced fund is only 20% exposed to SA growth. And this is a fund that keeps to regulation 28 of the Pension Funds Act, with a maximum of 25% in internationally domiciled assets. But at least 55% of earnings on the JSE come from international sources, and much of this is not from exports but from products that never go through our harbours. The vast majority of British American Tobacco products are not made in SA factories, and the entire market value of Naspers is made up of its holding in Tencent, which dominates China’s messaging and transactional Internet services through WeChat. And an increasing proportion of the JSE-listed property board is outside SA — at least 40%, and more if you inc...
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