By Michael Foundethakis, Partner, and Global Head of Project and Trade & Export Finance, Baker McKenzie Paris and Virusha Subban, Partner specialising in Customs and Trade, and Head of Tax, Baker McKenzie Johannesburg The African Continental Free Trade Area (AfCFTA) is predicted to increase Africa’s trade income by USD 450 billion by 2035 and will boost intra-African trade by more than 81 percent, according to a recent report by the World Bank. Since the start of trade under AfCFTA in 2021, African countries have been implementing changes to diversify their economies, increase production c ..read more

By Francis Marais, Head of Product at Morningstar South Africa In 2024, South Africa will finally see another major change to our retirement system. Although known as the “Two Pot system”, in reality, and for most, it will be a new three pot system. All retirement savings invested before 1 September 2024 will vest in a vested pot (pot 1), while all new contributions after 1 September 2024 will be allocated between a savings pot (pot 2) and a retirement pot (pot 3). Investors aged 55 and older as of 1 September 2024 will only have one pot – if you so choose. Sounds complicated, doesn’t it? In ..read more

By Debra Slabber, Portfolio Specialist Director at Morningstar South Africa I always like to start a new year reflecting on the last, especially taking stock of the lessons I learned. The article below unpacks three reminders that stood out to me in 2023 from a market and investing perspective: Short-term predictions add little value Returns are often earned in a short amount of time Volatility is a bad indicator of risk Short-term predictions add little value Investors came into 2023 on high alert for a potential recession and scars from 2022’s brutal sell off in both bond and equity mar ..read more

Proposed solutions to improve investing education and inclusion, especially for marginalised communities Travis Robson, CMgr MCMI, MBA, PGDM, FIFM The financial landscape in South Africa is undergoing significant transformations. While initiatives like Capitec’s innovative model have propelled financial banking inclusion forward, a notable gap persists, namely: investing literacy. Many individuals, particularly those in marginalised communities, lack the knowledge and confidence to navigate the complexities of investment, thus limiting their capacity to accumulate wealth and safeguard their f ..read more

By Sean Neethling, Head of Investments at Morningstar South Africa The increased number of companies de-listing from the JSE has elevated investor concerns about the investment outlook for SA Equities. The shortage of new listings, the relatively weak performance of local shares and depressed levels of business confidence have further exacerbated fears among market participants. While the de-listing trend is concerning, the debate is actually less about the number of de-listings and more about the level of market concentration and its impact on investment portfolios. The graph below shows new ..read more

Bianca Botes With substantial foreign exchange market growth predicted for 2024 and over the next five years, and the world facing another tumultuous year, risks are mounting for forex clients. Bianca Botes, Director at foreign exchange experts Citadel Global, makes four predictions for forex risk trends in 2024, from elections and geopolitical risks to investment declines and more ups and downs for the rand. Recently released research indicates that the global forex market size, for North America, Europe, UK, Switzerland, Middle East, Africa, Asia-Pacific, South America, China and Japan comb ..read more

By Sean Neethling, Senior Portfolio Manager at Morningstar Investment Management SA The South African economy is currently plagued by both cyclical and structural challenges that are negatively impacting market sentiment. Business confidence is especially low, while elevated inflation, higher interest rates and a weakening currency suggest consumers are likely to come under increased pressure in the current environment. Government policy uncertainty and South Africa’s unreliable electricity supply are specific structural concerns that investors are also grappling with. Markets are often not a ..read more

By Debra Slabber, Portfolio Specialist Director at Morningstar South Africa With equities no longer the only game in town and free money perhaps something of the past, asset allocation has become so much more complicated and a somewhat fascinating puzzle to solve. With the dislocation present in equity markets from a regional as well as sector perspective – where could money be made in the next decade? Because starting yields from fixed income assets today are much higher, could one argue that bonds have more roles to play today than the traditional uncorrelated nature to equities? How do you ..read more

By Sean Neethling, Head of Investments at Morningstar Investment Management SA S.A. government bonds endured a tough second quarter, delivering a negative return of 1.5%. Longer maturity issues were especially weak and sold off heavily alongside the rand, as adverse investor sentiment contributed to increased volatility in the domestic bond market. Despite attractive yields, foreigners have remained net sellers over the last few years as concerns around loadshedding continue to detract from the investment thesis for local currency government bonds. The outlook for the asset class is further c ..read more

Travis Robson, MBA, PGDM, FIFM Introduction In an era characterized by heightened awareness of environmental, social, and governance (ESG) issues, ethical investing has emerged as a powerful force shaping the financial landscape. Investors are no longer solely focused on financial returns; they are increasingly seeking investments that support their values and contribute to positive societal and environmental outcomes. This trend is particularly evident in the South African market, where the legacy of social and economic inequalities has driven a strong interest in responsible and ethical inv ..read more