News
Comments from the Chief Operating Officer
Rob DowerLiving in London several years ago my wife and I were able to borrow money to buy a house and we have hung onto it since then. Like many people who borrowed money in the UK at a floating rate before the financial crisis, we are now being charged very little interest on our debt.
After UK inflation, our cost of borrowing is negative – you may say we are being paid to not pay the debt back... read more
A zero interest rate world
Sandy McGregorFollowing the financial crisis of 2008, central banks in Europe and the United States have reduced short-term interest rates to almost zero. The precedent for this was set by Japan, where rates have been at or below 0.5% since 1995.
In practice, the world’s financial system is on a dollar standard, which means that the US monetary policy is the principal determinant of monetary policy elsewhere... read more
Lest we forget
Mahesh CooperWe sometimes forget what an extraordinary period the last 10 years has been for local investors despite the Global Financial Crisis. The local stock market has gone up over four times, with strong real returns from local cash and bonds as well.
Meanwhile, the rand has strengthened from R11.42 to the US dollar 10 years ago to R7.47 by 29 February 2012... read more
Insurance: better than you think
Duncan Artus and Leonard KrugerWe have previously set out the reasons Sanlam has an above-benchmark position in our clients’ portfolios (see Quarterly Commentary 1, 2010). On a ‘look-through’ basis our position is however not limited to Sanlam (although it is currently the only insurer in our Top 10).
Total exposure to the insurance and related sectors currently amounts to 11.2% of local... read more
High correlations present challenges
Seema Dala and Chris du ToitActively managed funds, including the Orbis Global Equity Fund, have struggled to outperform the market over the past year. Actively managed funds are able to beat the market because they are different from the market.
In recent periods, however, share price movements have been highly correlated, so being different has not necessarily helped... read more
Online: your service channel of choice?
Shabnam OsmanSouth Africa has seen a surge of internet users recently, with the number doubling over the last two years, and the current count standing at around 6.5 million.
We are becoming more present digitally, and getting more comfortable transacting in the online world, with well-established online banking, travel and shopping services and more sophisticated online security... read more
The real effect of Dividend Withholding Tax
Johann GrandiaOur research shows that although the change in the way dividends are taxed will impact your investment, the net effect of the latest change is relatively small... read more
