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Finweek English Edition — January 11, 2018

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18 January - 31 January 2018
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from the editor
i
JANA MARAIS
my 12 years as an economic migrant in Gauteng, this was the first
anuary I didn’t tackle the N1 north with an extremely heavy heart after
he holidays. Two weeks in the rural Eastern Cape with daily loadshedding (our municipality has failed to pay Eskom, again), not a drop
of municipality-supplied tap water at our house and frustratingly slow
mobile internet made me long for Joburg traffic and the joys of 4G.
What was particularly galling was that some similar, small neighbouring
towns appear to be doing much better – their rubbish collection system
seemingly functions; the main road is pothole-free; the pavements are
neat and well-maintained. As there is no discernible distinction in terms
of the towns’ resources and demographics, the key differentiator must
be leadership. A leader can make all the difference, as examples from the
demise of Steinhoff to the economic revival of France under Emmanuel
Macron illustrate.
And so it was with much interest that I read an article on Mike Duggan,
the mayor of Detroit, in a recent edition of the Financial Times (FT).
T
Duggan, described by the paper as “an unremarkable guy who has done
unremarkable things to achieve extraordinary results”, took office in 2013,
a few months after Detroit filed the largest municipal bankruptcy in US
history. Once a prosperous city, decades of mismanagement made Detroit
a poster child of the demise of America’s manufacturing cities. When
Duggan took over, 40 000 properties were vacant and 40% of street lights
weren’t working. Four years later, 99% of lights work; The New York Times
named Detroit “the most exciting city in America”; and unemployment is at
its lowest level in 17 years.
How did Duggan do it? By focusing on the boring stuff, he told the FT
– making sure street lights and fire hydrants are working, by improving the
response times of ambulances, by keeping parks neat and clean.
His own report card for 2017 focuses on the basics by highlighting the
city’s track record in simple things like the number of new trees planted
and dead trees removed; parks renovated; illegal dumping sites cleaned up;
broken sidewalk squares replaced; affordable housing units opened; vacant
houses renovated and occupied.
Duggan certainly offers a lesson for the Cyril Ramaphosas and Herman
Mashabas of the world. But as he says, turnaround happens “not because
one or two leaders do some brilliant thing – turnaround occurs when
everybody in the organisation performs better”. So whether we’re in Detroit
or Joburg or the Eastern Cape, we can’t afford to sit and wait for a saviour.
contents
Opinion
6 The hidden cost of free higher education
8 Crumbling roads, bridges a global threat
The week in brief
10 News in numbers
12 SA’s five mining bosses most under pressure in 2018
Marketplace
14 Fund Focus: An income-growing option for retirees
15 Invest DIY: How to achieve those lovvy new goals
16 Simon Says: EOH, Taste Holdings, Steinhoff, Star,
ETFRHO, rand
18 House View: ASHMID, Kumba Iron Ore
19 Killer Trade: Capitec, Richemont
22 Stocks: Simpler is (almost) always better
23 Personal Finance: Twelve months of smart money
moves
26 Behavioural Finance: Five biases investors need to
guard against
27 Directors & Dividends: Dealings and payouts
Cover
28 Outlook: What 2018 holds for SA
In depth
33 Steinhoff: Four questions the company must answer
On the money
36 Spotlight: Getting Cell C deeper into the black
38 Entrepreneur: Boxing an organic lifestyle
41 Motoring: Sure-footed finesse and gravel gravitas
from the new BMW X3
43 Careers: Feeling stuck in your job? Here’s what to do.
45 Crossword and quiz
46 Piker
EDITORIAL & SALES
Editor Jana Marais Deputy Editor Anneli Groenewald Journalists and Contributors Simon Brown, Moxima
Gama, Natalie Greve, Mariam Isa, Marcia Klein, Lloyd Gedye, Johan Fourie, Niel Joubert, David McKay, Timothy
Rangongo, Amanda Visser, Glenda Williams Sub-Editors Stefanie Muller, Katrien Smit Office Manager Thato
Marolen Layout Artists Tshebetso Ditabo, David Kyslinger, Beku Mbotoli Senior Sales Executive Paul
Goddard 082 650 9231/paul@fivetwelve.co.za Marita Schoonbee 082 882 7375/marita.schoonbee@
newmediapub.co.za Sales Executive Tanya Finch 082 961 9429/tanya@fivetwelve.co.za Publisher
Sandra Ladas sandra.ladas@newmediapub.co.za General Manager Dev Naidoo Production Angela Silver
angela.silver@newmediapub.co.za, Rae Morrison rae.morrison@newmediapub.co.za
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opinion
By Mariam Isa
INFRASTRUCTURE
Crumbling roads, bridges a global threat
Deteriorating infrastructure hurts business activity as it increases the cost of production and travel. And while South
Africa’s ageing infrastructure is in desperate need of an upgrade, the country is not alone.
8
finweek 18 January 2018
networks; ageing airports barely able to cater
In fact, many warn that the tax bill will
for a population that is more mobile than
both use up potential funding options for
ever before; and failing electricity grids that
repairing infrastructure and eliminate a
paralyse entire cities,” it said.
financing option which states have used to
It estimated that the cost of providing
support infrastructure projects.
adequate infrastructure to those 50
To make matters worse, Trump has
countries between now and
sparked widespread consternaThe US economy will lose
2040 would amount to $94tr,
tion by expressing misgivings
just under
rising to $97tr if the UN
about his administration’s infraSustainable Development Goals
structure plan, telling Republican
of universal provision of clean
leaders at a retreat on 5 January
water, sanitation and electricity
that building projects through
were taken into account.
public-private partnerships was
in GDP between 2016 and
But if current spending trends
unlikely to work.
2025 if investment gaps
continued, there would be a
This was clearly news to his
are not addressed.
shortfall, or funding gap, of $18tr
chief economic adviser Gary Cohn,
– around 20% of the overall requirement, the
who the following day delivered a detailed
analysis pointed out.
proposal on the topic which appeared to
The world’s biggest economy, the US, is
contradict Trump, according to The Washington
worst off while the world’s second-biggest,
Post. He said the administration hoped
China, accounts for nearly a third of global
$200bn in new federal government spending
infrastructure needs, it added. The US has a
would unlock almost $1tr in private, local and
projected gap in infrastructure spending of
state spending.
$3.8tr, the biggest of any country over that
According to the Global Investment
period.
Hub’s report, there are trillions of
The American Society of
dollars in private investment
Civil Engineers is even more
ready to be mobilised
pessimistic. It believes
globally to fund new
that the US economy
infrastructure if a pipeline
will lose just under $4tr
of quality, bankable
in GDP between 2016
projects were available.
and 2025 if investment
Its investor survey in
gaps are not addressed.
2016 found that 65% of
This could rise to $14tr
existing infrastructure
by 2040 if ageing roads,
investors in emerging
railways and bridges decay
markets wanted to
even further, it warns.
increase their allocations in
Deteriorating infrastructure
the next three to five years,
leads to higher business costs as
but 92% felt that there were not
A CSX train crosses the Ohio
it makes goods more expensive to
River via a steel railroad truss enough opportunities.
produce and travel more costly and
Similar opportunities could
drawbridge that was built
in 1868.
unreliable, making productivity fall
present itself in SA, with the right
and in turn hurting economic activity.
political leadership to overhaul the state
During his election campaign, President
institutions responsible for the country’s
Donald Trump promised to tackle the problem infrastructure. ■
with a plan to generate $1tr in infrastructure
editorial@finweek.co.za
spending. But more than a year later nothing
Mariam Isa is a freelance journalist who came to SA in 2000 as chief
has happened, with critics saying a golden
financial correspondent for Reuters news agency after working in the
Middle East, the UK and Sweden, covering topics ranging from war
opportunity was missed by not including it
to oil, as well as politics and economics. She joined Business Day as
in a sweeping overhaul of the country’s tax
economics editor in 2007 and left in 2014 to write on a wider range of
codes at the end of 2017.
subjects for several publications in SA and in the UK.
$4tr
www.fin24.com/finweek
Shutterstock
d
uring the flood of news about
politics, corruption and the
struggling economy late last
year, one significant event
was largely overlooked – the release of South
Africa’s third infrastructure report card (IRC).
The dismal assessment from the
South African Institute of Civil Engineers
(SAICE) showed that, overall, the country’s
key infrastructure – including transport,
electricity, water supply, education and health
– is at risk of failing.
Poor maintenance and sometimes
outright neglect have undermined the
resilience of existing infrastructure, while
inadequate management, planning and
data collection, together with a worsening
shortage of skilled engineers in the public
sector are contributing factors, it said.
The report gave SA an overall grade of
D+ compared to C- when the last one was
released in 2011, and warned that the water
resources sector is facing a similar crisis to
that of the electricity generation sector a
decade ago. Most of the shortcomings were
flagged in the previous report cards in 2011
and 2006, it pointed out.
“If you don’t do maintenance, you need
to repair and we end up doing a lot of repair
and rehabilitation which should not have
been necessary,” says Sam Amod, a former
president of SAICE and co-author of all
three report cards. “It ends up costing us a
lot than necessary.”
Similar reports are published by engineering associations in the US, the UK and
Australia, with the intention of informing and
influencing the planning, funding and debate
on the state of their infrastructure.
Ironically, in some cases the assessments
are largely ignored. A groundbreaking report
last year from the Global Infrastructure
Hub covering 50 countries showed that
inadequate provision of critical infrastructure
was becoming a major challenge in many
parts of the world.
Although the topic of infrastructure may
not attract bold headlines, the problem
was already visible in almost every country,
it noted. “It can be seen in strained and
crumbling highways, bridges and rail
in brief
>> Mining: Which CEOs are in the hot seat this year? p.12
“STEINHOFF IS AS
SIMILAR TO ASPEN
AS A IS TO S IN THE
ALPHABET.”
“STEINHOFF IS
DEFINITELY NOT A
BUSINESS WORTH
ZERO.”
– Byron Lotter, portfolio manager at Vestact,
highlighted the belief among fund managers
that good assets remain in the Steinhoff group.
“It is important to note – and what the market
has recently been reminded of – that Poundland
managed to raise capital as a separate subsidiary
in its own right and had a record festive season,”
Lotter said. “I have a feeling the business will
survive and the share price should revalue reflecting
the value of the underlying businesses, but there
might be a few more shocks on the way.” (Also see
pages 16, 22 and 33.)
– Stephen Saad, CEO of Aspen, defends the
pharmaceutical giant’s full-year earnings, citing that it is
“completely clear” with no bearings to Steinhoff’s during
an interview with Bloomberg. Aspen has been busting
moves to reassure investors, spooked by speculation that
Viceroy Research, which exposed Steinhoff’s accounting
irregularities, is busy preparing a similar dossier on Aspen.
Aspen said it “was not aware of price-sensitive information
that required communication to shareholders”. Saad told
Bloomberg it is “sad that unscrupulous operators can abuse
the fear in the market for their own greed”.
10
finweek 18 January 2018
– Leonard F. Yankelovich,
the founder of Dartz Motorz,
a car manufacturer in Latvia,
said he had a strong feeling
that his “most expensive vodka bottle in the world”
that was stolen on New Year’s Day in Copenhagen,
would be returned, nytimes.com reported. The
bottle, which was estimated to be worth between
$750 000 and $1.3m and has featured in the
Netflix hit series House of Cards, was fitted with
an original 1912 leather ribbon from the company’s
first Monte Carlo rally car, it reported. The bottle, the
theft of which made global headlines, was found,
empty and dented, on 5 January.
www.fin24.com/finweek
Gallo Getty Images/Waldo Swiegers/Bloomberg
Stephen Saad
CEO of Aspen
www.allposters.com
“I trust
the god of
vodka.”
DOUBLE TAKE
THE
GOOD
BY RICO
Fifteen months after former Public
Protector Thuli Madonsela published
her report on state capture, ordering the
president to appoint a commission of
enquiry into the matter and following a
Constitutional Court order confirming
Madonsela’s instructions, President
Jacob Zuma has finally appointed
Deputy Chief Justice Raymond Zondo
to head the enquiry. Though cynics
would question the political intentions
behind Zuma’s sudden change of heart,
his ongoing legal appeals in the matter
and the eventual scope of the enquiry,
let’s hope the compromised president’s
wish that “no area of corruption and
culprit should be spared” will indeed
come true.
THE
BAD
Eskom, which provides the lifeblood
of the South African economy, is
reportedly running out of cash, but
its executives and public enterprises
minister Lynne Brown seem completely
nonplussed about the looming crisis.
Following a sham disciplinary hearing
related to his failure to declare a
significant conflict of interest with
a supplier, Matshela Koko is back in
his role as head of power generation,
highlighting the complete disregard for
good governance at Eskom. Brown has
failed to overhaul the board or appoint a
new CEO, and the utility had to postpone
the publication of its financial results –
seemingly because it is bankrupt unless
further state guarantees can be secured.
THE
UGLY
finweek
NEW VEHICLE SALES RISE
2013
1.8%
The global hedge fund industry produced its best
returns since 2013 last year, driven by strong
performances by equity hedge funds, ft.com
reported. Hedge funds across all strategies
produced returns of 8.5% in 2017, compared with
5.4% in 2016, according to data from research
group HFR. Equities hedge funds, which include
long-short funds, growth and value funds and
sector-specific strategies, were up 13.2%, the best
performance in four years, ft.com reported. Some
smaller managers that did particularly well were
Whale Rock Capital, returning 36.2%, and Light
Street Capital, which returned 38.6%, thanks to
the rise of technology stocks like Alibaba, it said.
New vehicle sales in South Africa increased
by 1.8% in 2017, with a total of 557 586 new
vehicles sold last year, according to data
from the National Association of Automobile
Manufacturers of South Africa (Naamsa). Vehicle
financier WesBank attributed the improvement
to “the rand being resilient in the face of volatility
and the South African economy performing
better than anticipated”. The stronger rand
allowed manufacturers to pass value back to
consumers through very attractive marketing
incentives when purchasing new vehicles, it said.
Naamsa is expecting this year’s new vehicle sales
to grow by 2.6% to reach 572 000.
SLIGHT DECLINE IN GLOBAL M&A
Two passenger rail incidents since the
start of the year, including the death
of 19 passengers after a crash in the
Free State, have highlighted the serious
safety concerns at Prasa. DA shadow
minister of transport, Manny de Freitas,
says the two accidents are emblematic
of poor investment in safety-related
rail infrastructure, with 495 fatalities
and 2 079 injuries recorded on SA’s rail
network in the 2016/17 financial year. “It
is grossly unfair that while Prasa loses
millions of rands to corruption, millions
of commuters are left to grapple with a
compromised and unsafe rail system,”
De Freitas said in a statement.
@finweek
HEDGE FUNDS IMPROVE
TRAVEL FREEDOM
$3.5tr
52
Global mergers and acquisitions (M&A) activity
hit $3.5tr last year, a 1% drop from 2016 and the
lowest figure since 2014, ft.com reported, citing
data from Thomson Reuters. It was the fourth
year in a row that global dealmaking exceeded
$3tr, it said. Some of the major deals include the
purchase of healthcare insurer Aetna by CVS
Health, the US’s biggest drugstore chain, for
$69bn; the sale of much of Rupert Murdoch’s
21st Century Fox to Disney for $66bn; and
the Australian Lowy family’s sale of its global
shopping centre business Westfield to France’s
Unibail-Rodamco for $24.7bn, it reported.
South Africa ranked 52nd on the 2018 Henley
Passport Index, which ranks countries according
to the travel freedom that its citizens enjoy, a drop
from 35th in 2008/09. South Africans enjoy
visa-free access to 100 countries, according to the
index, and is ranked third-highest in Africa after
the Seychelles and Mauritius. Globally, Germany
ranks top for the fifth year in a row, with its citizens
enjoying visa-free access to 177 countries in total,
according to Henley & Partners. Nigel Barnes,
managing partner of Henley & Partners South
Africa, warned that SA is lagging behind when it
comes to both travel and settlement freedom.
finweekmagazine
finweek 18 January 2018
11
in brief in the news
By David McKay
SA’s five mining bosses most und
r The mining industry has had a tough go of it for some time, making an already tricky job even more of a balancing act.
unning a mining company is not beer
and skittles at the best of times, but
there are a number of industry bosses
who are under particular pressure at the
current time. finweek identifies those with the
most to prove and what they must do to keep
their seats.
takeover of Lonmin; and yet another in which
Sibanye-Stillwater has an option over control
in DRDGold.
But Froneman’s task is making all these
spectacular corporate moves coalesce into
a single, coherent strategy of geographic
and mineral diversification. Dividends –
once described by Froneman as the basis of
Sibanye’s investment case – have been put
on hold while net debt is pretty high,
so the last thing Froneman needs is to
falter operationally.
Nico Muller
CEO: Impala Platinum
Appointed: April 2017
Arne Frandsen
Impala Platinum mines palladium, which is
doing rather well at the moment, but its main
product – platinum – is stubbornly resistant to
price improvement. The rand has also firmed
as currency speculators line up the possibility
of improving business conditions in SA.
While this is good for mining firms in the
long term, it’s not great for the revenue lines
of struggling miners in the short term.
Set against these conditions, Muller is faced
with a mountain of a task in judiciously cutting
unprofitable ounces from Implats’s Rustenburg
mines. Unions will oppose him, however,
which is dangerous given that retrenchments
– estimated to be 2 500 people in the first
iteration of the firm’s restructuring – will heap
pressure on communities in a sensitive region
of the country.
What’s interesting about Muller, however,
is that in addition to cutting ounces, he’s
invested R400m for a 15% stake in the
Waterberg project of Platinum Group Metals,
a company listed in Toronto. Implats also
has the option to take control of the project
for a total cost of R2.5bn, giving the firm
operational flexibility for the future.
CEO: Pallinghurst Resources
Neal Froneman
CEO: Sibanye-Stillwater
Appointed: 2012
It seems odd to point to Neal Froneman as
an under-pressure mining CEO, especially
following a year in which the company
gobsmacked Johannesburg by splashing
out R30bn to buy Stillwater Mining, a US
company – an enormous transaction that
was followed up with the £285m proposed
12
finweek 18 January 2018
It seems odd to point to Neal Froneman
as an under pressure mining CEO,
especially following a year in which the
company gobsmacked Johannesburg
by splashing out
R30bn
to buy Stillwater Mining.
Ten years is a long time to have been a CEO,
especially given that the share price of the
company has fallen just over 10% in that time
and only two dividends have been paid.
But then Pallinghurst Resources is not
exactly a mining company in the traditional
sense. In fact, 2018 will be the first year it’s
considered an operating company. For the
previous 10 years it was an investment firm.
That strategy, which coincided with the
meteoric rise and fall of mineral prices, has
not yielded the return that Pallinghurst’s very
loyal shareholders would have desired.
The plan for Frandsen now – and hence
the pressure – is to restructure the company
so it has meaningful exposure to the
commodities in which it wants exposure. It
has already seized full control of Gemfields,
a coloured gemstones company, which it
delisted (amid some minority shareholder
opposition); and has suggested entering into
joint venture in its Fabergé brand through
which it markets the gemstones.
It’s also questionable that Pallinghurst
will want a long-term exposure to Sedibelo
Platinum Mines, an unlisted firm that is
burning cash. It does, however, want a greater
piece of its manganese investment – the
Tshipi mine which it owns indirectly through
Jupiter Mines, an Australian firm. As one can
see, the Pallinghurst investment universe
sprawls. So Frandsen has to tidy it up and
give shareholders comfort that there is an
actionable plan that makes money.
www.fin24.com/finweek
Gallo/Getty Images
Appointed: September 2007
in brief in the news
er pressure in 2018
High commodity prices and a strong
rand are cause for concern.
Mike Jones
President & CEO: Platinum Group Metals
Appointed: 2000
Seventeen years after founding Platinum Group
Metals, Jones has precious little to show for it.
The firm’s mine – Maseve – has been shut and
its processing facilities sold off to Royal Bafokeng
Platinum. All that’s left is the Waterberg project,
a large palladium and platinum deposit which is
being touted as the next big thing.
At least Jones has extracted some value out
of this project by selling a 15% stake to Impala
Platinum, but the pressure is on to turn promises
into monetary returns, and try not to spend
another 17 years trying to achieve that. Nobody
has that long.
Peter Geleta
Interim CEO: Acacia Resources
Appointed: November 2017
Being “the interim guy” is no fun; just ask anybody
at Eskom, or the significant number of individuals
serving in SA government departments which
have redefined the term. In the case of Peter
Geleta, a South African running UK-listed Acacia
Resources (formerly African Barrick), it’s like being
the fattest turkey during Advent.
A massive run-in with the Tanzanian
government around disputed tens of billions of
dollars in unpaid tax, and newly promulgated
regulations requiring free-carry government
investment in selected mining firms, resulted in
the firm’s CEO and chief financial officer quitting
on the same day.
In stepped Geleta, previously human
resources. His job is to keep Acacia ticking over
even though its flagship mine has been put on
care and maintenance while the firm’s 64.9%
shareholder, Barrick Gold, has undertaken – on
Acacia’s behalf, mind you – to pay $300m to the
Tanzanian government in compensation for the
tax claims.
First, though, minority shareholders in Acacia
must approve the tax payment; then begins
the process of negotiating the free-carry sale of
shares in the company to the government. Who’d
be a CEO? ■
editorial@finweek.co.za
@finweek
Mining stocks
to implode?
finweek
finweekmagazine
Analysts believe
there are significant
differences between
2011 and today, and
are recommending
their clients to stay
in certain mining
stocks, with BHP and
Glencore the most
commonly cited.
Commodity prices kicked on in the early days of 2018
– the Bloomberg Commodities Spot Index jumped
to its highest since December 2014 on 5 January –
raising the valid question as to whether mining stocks
were due for another implosion as they had in 2011
after a prolonged rally.
But analysts believe there are significant differences
between 2011 and today, and are recommending their
clients to stay in certain mining stocks, with BHP and
Glencore the most commonly cited. “We continue to
think that the combination of modest growth, improving
returns and capital efficiency should lead to a re-rating,”
said Macquarie in a report on diversified mining stocks.
Its most important observations were that mining
firms were not spending hell for leather as they
had in the lead-up to 2011, and that from a demand
perspective, the growth wasn’t all related to the
performance of China. Back in 2011, the European
debt crisis had derailed a lot of mature economies;
now those economies are back on track.
Supply is also constrained, said Goldman Sachs
in a report. Peak capital expenditure was in 2012/13
and projects related to that capex have mostly been
delivered, it said. “We believe capex will rise in 2018
mostly as a result of catch-up, but the volumes from
this capex will arrive in 2021/22, so this isn’t a concern
to supply-demand balances, in our view,” the bank said.
According to Macquarie, there was also less chance
of resource rent grab from host countries because
mining companies were much more transparent on
their tax payments – although, tell that to the mining
firms operating in Tanzania, where law changes suggest
a tax grab is very much the dish of the day.
“Strong growth sentiment together with a
renewed push towards the US infrastructure bill sets
up a stage for a strong 2018,” said Goldman Sachs.
The bank’s economists were bullish on global growth,
forecasting real GDP growth of 4.1% this year, it said.
“Also, news flow from China suggests policymakers
are likely to keep the growth target at around 6.5% – in
line with our economists’ view – which should assuage
any immediate investor concerns that growth would
fall off a cliff amid a push to tackle debt,” it said.
From a local perspective, the picture is always
slightly muddied by the performance of the rand,
which is liquid and volatile. Currently, the perception
of fundamental political change in the country, which
would result in a new pro-investment administration,
has seen the rand strengthen against the dollar.
The JSE’s gold counters, for example, are receiving
roughly R40 000 less per kilogram of gold produced
than a month ago because of the rally. ■
finweek 18 January 2018
13
market
place
>> Invest DIY: How to achieve those lofty new goals p.15
>> Simon Says: EOH, Taste Holdings, Steinhoff, Star, ETFRHO, rand p.16
>> House View: ASHMID, Kumba Iron Ore p.18
>> Killer Trade: Capitec, Richemont p.19
>> Investment: Simpler is (almost) always better p.22
>> Personal Finance: 12 money moves to fix your finances p.23
FUND IN FOCUS: BRIDGE STABLE GROWTH FUND
By Niel Joubert
An income-growing option for retirees
This multi-asset class fund’s objective is to provide investors with a balance between growth and income at moderate to
conservative risk levels.
FUND INFORMATION:
Fund manager insights:
Benchmark:
CPI for all urban areas + 2% over rolling 36-month periods
Fund managers:
Ian Anderson, Andrew Dowse & Richard Henwood
Bridge Fund Managers actively construct portfolios that they refer to as “Payers”
and “Growers”.
These portfolios are specifically designed and managed to deal with the dilemma
of producing a high income and a growing income stream for post-retirement
investors, says Paul Stewart, head of fund management at Bridge Fund Managers.
“The risks facing investors in retirement are profound due to the unique pressures
that are applied to portfolios that face regular cash outflows.”
According to him, a successful retirement income portfolio demands three
unique characteristics: First, an asset allocation that is focused on growth assets
(equity and real estate) to produce high capital returns in the long run and keep the
capital intact versus inflation; second, stock selection that is focused on securities
that pay regular and predictable income in the form of dividends and property
income; and third, stocks that can grow their income over time at a pace that
matches inflation to hedge the inflation risk of the income.
Stewart says once these three elements are incorporated into a single portfolio,
the outcome produced for the retirement investor closely matches their liability
profile and hence produces a high probability of a successful 30-year postretirement outcome.
According to Stewart, the fund is ideally suited to
The portfolio’s exposure
investors either near or in retirement who are looking to
to equity instruments will
draw a regular income from their retirement capital. The
never exceed
fund is specifically designed to provide investors with a
high level of income (currently above 6.5% net of costs)
in the form of dividends, property income and interest
income and is managed in such a way that the income
of the total portfolio.
grows through time at a pace that exceeds inflation.
The fund, which was previously named the Grindrod
Stable Growth Fund, invests in a portfolio of equities, fixed-interest securities,
money-market instruments and listed property. The portfolio’s exposure to equity
instruments will never exceed 40% of the total portfolio.
“By investing in this portfolio, the retiree can manage some of these unique
retirement risks in a sensible and pragmatic manner,” says Stewart.
Fund classification:
South African – Multi Asset – Low Equity
Total expense ratio:
1.21% (Class A)
Fund size:
R1.015bn
Minimum lump sum / R5 000 / R500
subsequent investment:
Contact details:
0800 117 842
TOP 10 EQUITY HOLDINGS AS AT 30/11/2017:
1
Safari Investments
3.21%
2
Fairvest Property Holdings
3.2%
3
Dipula Income Fund B
3.19%
4
Delta Property Fund
3.17%
5
Accelerate Property Fund
3.14%
6
Arrowhead Property Ltd A
3.11%
7
Tower Property Fund
3.1%
8
Equites Property Fund
3.08%
9
Truworths International
2.03%
10
Spar Group
2.01%
TOTAL
29.24%
PERFORMANCE (ANNUALISED AFTER FEES)
As at 30 November 2017:
■ Bridge Stable Growth Fund
■ Benchmark
10
9.33%
9.19%
8
6.95%
6
7.35%
Why finweek would consider adding it:
4
2
0
14
40%
1 year
finweek 18 January 2018
Since inception in May 2009
The fund won the 2017 Morningstar Award for the Best Cautious Allocation Fund.
It charges no performance fees and has consistently outperformed its benchmark,
including over a one- and five-year period and since inception in May 2009.
The fund complies with all prudential requirements and regulations governing
retirement funds. It is also available to be used as a tax-free savings plan. ■
editorial@finweek.co.za
www.fin24.com/finweek
marketplace invest DIY
By Simon Brown
NEW YEAR’S RESOLUTIONS
How to achieve those lofty new goals
It’s a new year and that means many will plan to do things differently this time around. This year, rather start
by making smaller, achievable resolutions.
w
into our calendar. Not a recurring schedule
e survived 2017. It may
as that’s too easy to ignore. Rather,
feel as if we just barely
once a week look at the week ahead and
made it, but here we are
find a gap when you can work on your goal
in 2018. And that means
– enter it into your calendar and remember
that many of us will have made New Year’s
to set reminders.
resolutions. Usually these go along the lines
You are far more likely to achieve biteof doing more exercise and drinking less,
sized, achievable goals set for specific
maybe combined with notions of trying to
times rather than huge intimidating ones.
improve one’s spending and saving habits.
Most of us can admit there’s something
But for most of us, by the time we’re
in our financial lives that could be done
reading this, our resolutions are already out
smarter. Maybe something as simple as
the window. This is mostly because we’re
adding a little extra every month to our
doing them wrong.
savings or actually doing a budget so we
The problem with resolutions (or goals,
can track spending. It could be building an
as I prefer to call them) is that we make
emergency fund or finally digging into the
large, grand statements that are desirable.
true costs of our investments with a view
But they are so large that they scare us and
to getting better performance at lower fees.
we crumble.
I have a few goals for my money in
For example, we decide we need to get
2018, with one being an old one I strive
fit. Then we announce that we’ll go to the
towards every year: a perfect trade. Every
gym three times a week and run twice a
time I finish a trade, my goal is to do
week. It’s like trying to eat an elephant in
another perfect trade. One by one perfect
one sitting – it’s just not going to happen.
trades will make a trader profitable. What’s
Instead, we should eat the elephant slowly
important here is that I am trying to do
meal by meal, accepting that it’ll take time.
one perfect trade at a time. What a perfect
We dream about our great ideas for our
trade looks like is up to you and I will write
goals, but starting seems impossible as the
on this in the weeks ahead.
endeavour is too big and scary.
A new goal for my investing this year
Deep down, we don’t believe we’ll
is something I’ve always done but want to
achieve our goals. Fearing failure, we do
make a weekly part of my investing. Every
nothing and another year passes with us
week I’ll schedule an hour and pick some
sitting on the couch.
company I don’t know and dig into it – I’ll
Instead, we should have a series of small
check its financials, website and
and simple bite-sized goals
I have a few goals for
news articles with the aim of
that we can easily measure
my money in
getting a basic understanding
and achieve and that will get
of that business.
us to the ultimate goal. So
I would not be looking to
rather than the mad fitness
buy the company, but this
idea above, a better goal
with one being an old one I
process does two things.
would be to start small with
strive towards every year: a
First, if I spend more time
a brisk 30 minute walk right
perfect trade. Every time I finish
researching, I’ll be a better
now. This is simple and as a
a trade, my goal is to do another
researcher, but it also
bonus, in half an hour’s time
perfect trade.
provides a better, broader
you’re already succeeding,
understanding of the market and I may
having achieved your first goal for the year.
even find the occasional winner.
We don’t stop there; we target twice
So, find some areas you want to improve
more in the week and start building our
upon, break them into bite-sized chunks,
ability one step at a time. This is easy and
schedule the time and start reaching your
soon enough we’re actually getting fitter –
goals in 2018. ■
doing it small step by small step.
Also important is to schedule the time
editorial@finweek.co.za
You are far more likely
to achieve bite-sized,
achievable goals set for
specific times rather
than huge intimidating
ones.
Getty Iamges
2018,
@finweek
finweek
finweekmagazine
finweek 18 January 2018
15
marketplace Simon says
By Simon Brown
EOH
Dodgy dealings
Aside from the Steinhoff collapse, the other
big story that rocked the market recently was
the EOH crash. The share price tumbled to a
six-year low of 2 655c on the back of forced
director selling (this after a high of almost
R180 in late 2016). The story is that two
directors had taken out loans to buy more EOH
shares using existing EOH shares as collateral,
essentially gearing their holdings. This is
perfectly legal and within the JSE rules, as
long as the trades are disclosed. But I think it
should be illegal and if a director of a company
I ran did it, I would fire them. As we’ve
witnessed, the risk here is that a falling share
price means the shares held as collateral are
not sufficient to cover the loan. The lender then
starts selling. This selling drives the price lower
and triggers more selling by the lender. In the
case of EOH, the price weakness was initially
prompted by reports of possible impropriety
from a company it had acquired in November
2015. EOH is now unwinding that transaction.
But the reality remains – forced director selling
caused a share price collapse. Directors earn
great salaries, bonuses and share options. Why
are they then also gearing their holdings in a
situation that can, and in this case did, result
in massive share price destruction? EOH has
recovered to a degree, but lasting damage has
been done.
TASTE HOLDINGS
Gallo/Getty Images
Just avoid
The company has confirmed the details of
its latest rights issue, with new shares being
issued at 90c while the share currently trades
at around 70c. The rights issue will raise
R398m. I think this is the last roll of the dice
for Taste Holdings. It needs to make this work
or it will likely hit the wall. But this should
be enough cash for them for now while it
waits for a buyer for the luxury division. For
shareholders asking why they would want
to buy new shares in the rights issue when
they can buy on the market for cheaper – the
answer is you should not. The bigger issue is
that Taste is a company in trouble and I am
staying well away for now.
16
finweek 18 January 2018
STEINHOFF
Simon’s
stock tips
Founder and director of investment
website JustOneLap.com, Simon
Brown, is finweek’s resident expert
on the stock markets. In this column
he provides insight into recent
market developments.
STEINHOFF
Uncertainty
reigns
Where does one even start with the destination
of this former giant? We know that it collapsed,
but information is thin on the ground and what
little we do know is not good. The company
seems to be missing some €6bn and has
“significant near-term liquidity” problems. The
2015 and 2016 results cannot be trusted; the
2017 results have not as yet been released; the
board and management team are continually
being shuffled with the CEO and chief financial
officer (CFO) both out; and Moody’s has
downgraded the company. (The CFO remains
on board to “focus on the preservation and
procurement of liquidity in the group”.) The
end of December was the deadline for the
2017 results and if they’re not released by
the end of January, the JSE will suspend the
company. This is tricky as the primary listing
is in Frankfurt and the JSE can’t really act
unless the DAX suspends first. For now, those
buying the share are gambling, as we simply do
not know how this will end. In the worst case,
the company could be wound up. Otherwise
it may manage to limp along or even boom
again. Readers may consider it unlikely that it
will declare bankruptcy, and this is probably the
case. However, with so little hard information
anything is possible and I am staying away.
The rights issue will raise
R398m
and I think this is the last roll of the dice for
Taste Holdings.
Why the JSE
shouldn't
suspend it
One of the concerns regarding the Steinhoff
saga is why the JSE has not suspended
the share, with many calling the local stock
exchange lax and irresponsible. I disagree. Aside
from the issue of a primary listing on the DAX,
any local suspension would seriously prejudice
JSE shareholders as this is a free market. Sure,
we know very little about the actual state of
the company, but as long as everyone is in the
same boat trading should continue. Suspension
is for when inside information has leaked or
listing rules have been breached – neither has
happened as yet. Many are claiming insiders
do know more than we do, but that is always
the case with listed companies as results are
being prepared. It becomes an issue if they’re
acting on that information and the JSE will be
monitoring the situation, as it always does.
STAR
Steinhoff’s
ripple effect
The Steinhoff debacle also resulted in other
shares that the company and its directors have
stakes in coming under pressure. Steinhoff
Africa Retail (Star), KAP Industrial Holdings,
PSG and Shoprite* are all feeling the squeeze.
The latter three are all untouched by the issue as
Steinhoff (or Christo Wiese) is just a significant
shareholder, and I was buying Shoprite when
the sellers pushed it lower. Star is likely fine, but
the concern is that it only recently came out
of Steinhoff and that former Star CEO, Ben la
Grange, was also the Steinhoff chief financial
officer (who has now sort of quit). Star’s
assets are great. But the whole Steinhoff story
shows us that while the quality of the assets
is important, so is the quality of management.
Right now, a huge question mark is hanging
over the entire Steinhoff management team
and its abilities, which is tainting Star. I wouldn’t
panic but do be cautious.
www.fin24.com/finweek
Shutterstock
marketplace Simon says
ETFRHO
RAND
Rhodium
shines
Where is the
rand going?
Checking the list of the 2017 top movers within
exchange-traded funds (ETFs), I see that
ETFRHO comes out well ahead of all others,
having doubled in 2017. Issued by Standard
Bank, it tracks rhodium, one of the platinum
group metals that many (myself included)
had never really heard of before. The question
being asked is why it ran in such a spectacular
manner. The answer is that demand spiked
(rhodium is mainly used in catalytic converters).
It’s also important to note that just because
it had an excellent 2017 does not mean 2018
will be as good. Interestingly, if we go back to
2016, there was the occasional large trade
happening but for the most part nobody was
really interested. In other words, few saw this
price spike coming. We can learn two lessons
from this: Winners often arrive out of nowhere
and winners don’t always continue to win. Don’t
be tempted to jump onto the new winner just
because it is winning.
One of the other big themes of 2017 was
offshore investing into US dollar. Virtually
everyone requesting investment advice last
year wanted to move money offshore or at least
earning in dollar. The rand is stronger over the
year and I think it will continue to strengthen
for the next few years. Though R10/$ is a long
way off, it’s not an impossibility. The mistake we
make is leaning all the way in one direction. If you
invested all into US dollar last year, you’re going
to have it very tough as we see rand strength.
Investors should ignore short-term panic and
stick to a steady course. I'm always buying local
and offshore in my core portfolio, regardless of
what’s happening to the currency. Over time it
evens out and I use the small active part of my
portfolio to skew one way or another. But the
large diverse portion of my portfolio remains just
that – diverse, including currency diversity. ■
editorial@finweek.co.za
Though R10/$ is a
long way off, it’s not
an impossibility. The
mistake we make is
leaning all the way in
one direction.
*The writer owns shares in Shoprite.
For more information contact
your broker, or call Western:
Cape Town 021 914 0290
Oudtshoorn 044 011 0049
Gauteng 012 523 0900
Windhoek +264 61 256 733
or visit www.westnat.com
Think insurance. Now think again.
Western National Insurance Company (Pty) Ltd, affiliates of the PSG Konsult Group,
are authorised financial services providers. (FAIS: Juristic Reps under FSP 9465)
house view
marketplace
BUY
ASHMID
SELL
HOLD
By Simon Brown
Time for SA Inc. to shine
It’s been over two years since the MidCap
Index has interested me. Ever since the finance
minister shuffle in December 2015, I was of the
view that the MidCap Index would have a very
tough time of it.
Now with the ANC elective conference over
and President Jacob Zuma surely on his way
out – the worst of the economic woes behind
us – I think it is time for SA Inc. to start shining.
The economy is still in a tough position, but
inflation is low, GDP is growing (not much but
better than last year’s recession) and consumer
confidence is slowly starting to wake up.
Last trade ideas
None of this means things are booming, but
it all suggests we have seen the worst. And while
the Top40 is offshore-dominant, the MidCap
Index is full of stocks with strong local flavour.
These stocks have had it rough, but in many
cases they’ve come out of it stronger.
I got a technical buy on the ASHMID* ETF
in late 2017 and have been buying both for
technical and fundamental reasons. For the
technical traders, a close below the 30-week
exponential moving average would be your
exit signal. ■
BUY
Long4Life
30 November issue
SELL
Tongaat Hulett
16 November issue
BUY
Sasfin
2 November issue
AVOID
Construction
19 October issue
*The writer owns the ASHMID ETF.
BUY
KUMBA IRON ORE
SELL
HOLD
By Moxima Gama
Exercise caution
After reaching a low at 2 415c/share
Kumba Iron Ore, a supplier of high-quality iron
and breaking out of its long-term bear
ore to the global steel industry, has surged
trend in 2016, my long-term outlook on
by more than 70% after breaching major
Kumba remains bullish and
resistance at 23 130c/share
I anticipate a gradual 100%
in October 2017. But with the
retracement to its all-time
three-week relative strength
high of 62 000c/share. But
index (RSI) currently in
because it’s overextended
mega-overbought territory, a
at this point a near-term
retracement is on the cards.
correction seems imminent.
Australia, the biggest
Therefore, exercise caution.
exporter of iron ore, expects
the iron ore price to drop
How to trade it:
by 20% year-on-year to an
A sell signal would be
average of $51.50/tonne in
triggered below 35 500c/
2018, citing lower expected
share, thereby confirming a
demand from main buyer
negative breakout of Kumba’s
China and rising global
steeper uptrend. Downside
supply, Reuters reported.
to 28 500c/share could
This compares with more
then follow. Stay short on
bullish predictions by
continued selling, as the
UBS and Citi, which are
next support level would
forecasting prices to
be at 23 130c/share.
remain relatively stable
This pullback would
at around $64/tonne.
be a mere correction
Spot prices currently
within Kumba’s bull
trade above $70/tonne.
trend, potentially
BMI Research is
presenting another good
also more bearish on the
buying opportunity at more
outlook for iron ore, saying in
reasonable prices.
a report released in December
Kumba Iron Ore’s
Alternatively, if Kumba holds
that it anticipates that iron ore
Saldanha mine
firmly above 35 500c/share after
prices will, due to oversupply, remain
correcting, go long or increase
on a long-term gradual downtrend
positions – the uptrend would extend
until at least 2021. Yet buying appetite for
towards 49 280c/share. ■
Kumba continues, with the miner currently
testing a 2014 prior high at 40 500c/share.
editorial@finweek.co.za
Buying appetite for
Kumba continues,
with the miner
currently testing a
2014 prior high at
40 500c/share.
18
finweek 18 January 2018
Last trade ideas
BUY
Woolworths
30 November issue
BUY
Kumba Iron Ore
16 November issue
BUY
Dis-Chem Pharmacies
2 November issue
BUY
Astral Foods
19 October issue
www.fin24.com/finweek
marketplace killer trade
By Moxima Gama
CAPITEC
f Bull’s days numbered?
ast-growing Capitec was rated
the best bank in the world for
the second year in a row by
international banking advisory
group Lafferty last year.
In December, it breached the
upper slope of its long-term bull
channel, despite a downgrade
by S&P Global following its
downgrade of SA’s sovereign debt.
Such a bullish breakout is usually a
sign of eager buying momentum,
which should in turn spur a steeper
uptrend. The tough economy
may benefit Capitec as it offers
a no-frills, cheap transactional
banking alternative, but market
watchers will keep a close eye on
its unsecured lending book.
On the charts:
The falling top which has formed
on the relative strength index
(RSI) monthly chart – also
CAPITEC
52-week range:
R668.61 - R1 097.96
Price/earnings ratio:
29.23
1-year total return:
50.04%
Market capitalisation:
R119.4bn
Earnings per share:
R35.33
Dividend yield:
1.28%
Average volume over 30 days:
219 421
SOURCE: IRESS
indicated on the three-week
RSI chart – could be a sign that
Capitec is overextended (negative
divergence) and possibly due for
correction. The three-week RSI
should be a leading indicator;
retaining its bull trend after the
pullback should fuel a steeper
uptrend to new highs. If it fails to,
more sellers will be on the prowl.
How to trade it:
Go short: If support at 100 000c/
share fails to hold and the threeweek RSI gives in, go short.
SOURCE: MetaStock Pro (Reuters)
Downside to either the lower
blue slope or the 85 070c/share
level could then follow. Capitec
should bounce on that slope.
If not, stay short – a negative
breakout may well be confirmed
below 81 100c and support at
74 700c could be tested.
Go long: A reversal above
100 000c after the anticipated
correction would be a bullish sign.
But a more credible buy signal
would only be triggered above
109 800c – potentially prompting
a steeper uptrend to the 131 200c
targeted mark in the short term. ■
RICHEMONT
f Eyes on the rand
ounded in 1988 by South African
businessman Johann Rupert,
Switzerland-based Compagnie
Financière Richemont is the
world’s second-largest luxury
goods company based on market
capitalisation. Its luxury brands
include Cartier, Van Cleef & Arpels,
Piaget, Chloé and Montblanc.
As a rand hedge stock,
Richemont is negatively correlated
to our local currency – meaning
rand strength places pressure on
its share price movement. When
the rand started strengthening in
November last year, Richemont
lost its gains through the lower
slope of its long-term bull channel.
Though Richemont’s prospects
have improved, partly thanks to
a management shake-up, the
restructuring of its luxury watch
business and improved trading
conditions in China, the group
is currently trading in bearish
@finweek
finweek
RICHEMONT
52-week range:
R91.55 - R131.53
Price/earnings ratio:
1-year total return:
22.5%
Market capitalisation:
R654.76bn
Earnings per share:
Dividend yield:
2.17%
Average volume over 30 days:
4 286 512
SOURCE: IRESS
territory. For investors, following
the rand movement may well be
the best bet.
On the charts:
Richemont confirmed a negative
breakout of its major bull channel
below 11 230c/share in the first
week of January. But because
the three-week RSI was megaoversold, a recovery is underway.
However, Richemont would have
to trade above 12 200c/share to
resume its previous bull channel.
How to trade it:
Go short: A reversal below
12 200c/share, together with
finweekmagazine
SOURCE: MetaStock Pro (Reuters)
continued rand strength towards
R12/$, would present selling
opportunity below 11 230c/share.
The downside to 9 480c/share
could follow as a mere correction
within the primary bull trend.
Go long: Upside through 12 200c/
share would mark a change in
bearish sentiment, triggering a
buy signal. In this instance, I’d
expect Richemont to recover all
its losses through the all-time high
at 13 155c and towards the upside
target situated at 15 000c. ■
editorial@finweek.co.za
Moxima Gama has been rated as one of the
top five technical analysts in South Africa.
She has been a technical analyst for 10 years,
working for BJM, Noah Financial Innovation
and for Standard Bank as part of the research
team in the Treasury division of CIB.
finweek 18 January 2018
19
marketplace invest DIY
By Simon Brown
STOCKS
Simpler is (almost) always better
People love complexity. It is in our nature to believe that simpler is somehow inferior. Simon Brown explains why
it is better for investors to opt for stocks with simple business models and easy-to-understand company results.
Gallo Getty Images Supplied www.skyscrapercity.com
t he Steinhoff story hit the headlines days
after my last 2017 print deadline, so I’ve
had a lot of time to think about it. One
of my thoughts is around complexity
in investing. As a rule, humans tend to trust
in complexity: we’re hardwired to believe that
simple is never going to be better.
We see this in everything from menus (where
a modest burger can be described using a
100-word magnum opus), phones (with more
power and ability than NASA sending people to
the moon, yet all we do is browse social media)
and especially in the markets with our trading
(with overuse of indicators and oscillators)
and investing (various very complex valuation
methods). We love complexity.
But surely it is best to keep it simple.
Occam’s Razor teaches us that out of the
multiple possible answers to a problem the
simplest answer is usually the better one.
However, we continue to embrace the
concept of complexity and it costs us dearly –
Steinhoff is the latest example.
The company’s business model
is certainly very simple: own
the entire value chain. If, as
Steinhoff does, you sell
furniture, then also
manufacture it. And as
wood is the largest input
into furniture, then
also own the forest.
But where Steinhoff
gets complex is with
its results. I remember
trying to understand
the company’s balance
sheet many years ago
– something that should
generally be easy. I couldn’t
get to grips with it and couldn’t
even work out its total debt position.
I walked away from the business because of
that complexity. This very issue has seen the
company come crashing to the ground. (Also
see page 33.)
When investing I always want to put my
money into a simple business – one that is
simple to understand, such as Famous Brands*.
It owns not only the franchises but also the
central kitchen and distribution. Simply put,
22
finweek 18 January 2018
it owns the entire value chain, making profits
along the entire process from manufacturing to
the final sale.
Coupled with this simple business model,
Famous Brands has very simple results.
Revenue is from franchise royalties, profits
on products manufactured and sold to the
franchise stores, and the logistics. Margins are
generous and very leverageable, as more stores
make for more demand for the central kitchen,
and adding new brands and products further
adds to margins and profits.
This business model was simple and
extremely profitable – well, until Famous Brands
bought an overpriced UK burger chain, but
that’s another story.
With this all front of mind, I do own a very
complex business in the form of Discovery*. It is
the only complex one I have in my portfolio.
I understand the broad business model;
making people healthier reduces claims and
tracking their health across many different
products also enables cross-selling.
But truth be told, the results
statement every six months leaves
me with a headache. The
contents of its balance sheet
make Sumerian look easy
to decipher. The point
is that I understand
the risk here. I am not
accusing Discovery
of doing anything
underhanded, but I
have to accept that the
results are beyond my
understanding and that
could cost me dearly one
day. I balance this with the
company’s potential, the fact
that it is the only complex stock
I own, and that it is a small part of a
diverse portfolio. A Steinhoff-style collapse in
Discovery will hurt, but it won’t be ruinous for
me and it is a loss I am prepared to risk.
So, keep complexity in mind when investing
and as a rule shy away from it, accepting that
when you do buy complexity, you add risk to
your portfolio. ■
editorial@finweek.co.za
Discovery’s head
office in Sandton.
When investing I
always want to put
my money into a
simple business –
one that is simple to
understand.
The Famous Brands logistics
centre in Johannesburg.
*The writer owns shares in Famous Brands and Discovery.
www.fin24.com/finweek
marketplace investment
By Timothy Rangongo
PERSONAL FINANCE
12 months of smart money moves
Take charge of your financial situation by doing something small every month. Stick our handy calendar (see
next page) where you can see it and use it to stay on top of your finances throughout the year.
a
new year does not only present us
with the task of remembering to put
down the correct date, but also with
another chance for us to get more
things right. Our lives and livelihoods hinge on
two critical pillars – our finances and professions.
Twelve months is enough time for you
to make your best money moves, says Lizl
Budhram, head of advice at Old Mutual
Personal Finance. “In January your money
pain points from last year are still fresh in your
memory – whether you’ve overly relied on your
credit card, taken on too much debt, tapped into
your overdraft a bit too often or failed to make
progress towards that deposit for your new
home,” she says.
She encourages South Africans to take
some time out to think about what they want to
achieve with their money in 2018. “Consider your
short-, medium- and long-term financial goals.
These may include some goals that you missed
the mark on in 2017.”
Budhram says it is useful to
do this exercise together with
your partner or family members.
If you’re all working towards
the same money goals, it will
be easier to cut back on some
expenses, for example.
The first step then is to
create a realistic budget, and
stick to it. Progress should
be regularly measured and
reviewed to accommodate changes in lifestyle
or any major life or economic event that
would impact your finances. These
call for adjustments to the budget
moving forward to accommodate
new spending and saving needs,
she says.
Chartered financial planner
at Brenthurst Wealth, Sonia du
Plessis, notes that the difficult
financial year we have just
weathered should remind us to
take a hard look at our financial
situation now rather than later,
“especially in view of the widely held
expectation that 2018 may be worse for
the local economy. Not to mention the tax
hikes expected come Budget 2018.”
She says life expectancy is increasing all the
time and even wealthy individuals will be wellserved by contributing to their retirement funds.
She recommends at least 15% of gross income to
be allocated to a retirement savings vehicle.
Other basic tips we are all aware of but often
ignore are to review all regular payments like shortterm insurance or life/disability cover and get rid of
short-term debt (widely referred to as ‘bad debt’)
like store or credit cards as soon as possible.
It is important to be appropriately insured
and to have a valid and updated will in place.
Without a will, your property inheritance may
pass to someone whom you did not intend on
inheriting from your estate, in accordance with
the Intestate Succession Act, warns Alexander
Forbes’s Christel Botha.
When you are shopping around for insurance,
Sharon Paterson, CEO of Infiniti Insurance,
cautions against opting for the lowest premium
as this is not always the best deal. She
recommends scrutinising
the policy wording, terms,
conditions and exclusions
of the product you are
getting a quote on, before
signing on the dotted line.
Alternatively, you can also
seek the advice of a broker. It
is important to keep copies
of original receipts as proof of
ownership, especially for bigticket items, she says.
Du Plessis emphasises the importance of
ensuring that children are also financially
empowered. Aim to have conversations
about financial matters with your kids
more often. During these talks, you
should also encourage them to
take charge of their finances so
that they don’t only know how
money is accumulated, but also
how it is protected too, she says.
Make 2018 the year in
which “we teach our younger
generation the true value of
money, and how to acquire good
money habits. Teach them the value
of money; they do not have to get all the
latest gadgets or toys,” she advises. ■
editorial@finweek.co.za
Images: Gallo Getty Images
www.infinitiafrica.com
www.bwm.co.za
Supplied
“Consider your short-,
medium- and long-term
financial goals. These may
include some goals that
you missed the mark on
in 2017.”
@finweek
finweek
finweekmagazine
Lizl Budhram
Head of advice at Old Mutual
Personal Finance
Sonia du Plessis
Chartered financial planner at
Brenthurst Wealth
Sharon Paterson
CEO of Infiniti Insurance
finweek 18 January 2018
23
JANUARY
Budget
Review your spending over the past three
months and use this as a basis to create
a realistic budget. January is a great time
to cut down on luxuries – this money can
instead be used in the coming months to
pay off debt, particularly store cards, and
increase your savings. Set a day and time
every month to review your budget. This
will allow you to assess whether you’ve
stayed the course and whether there is
need for reinforcement or perhaps a
little reward.
HANDY APP:
22seven by Old Mutual
FEBRUARY
Retirement Savings
In order to ensure that you are on track
to meeting your retirement goals, it is
important to check how your savings are
progressing, says Sanlam’s head of client
solutions for savings, Kenosi Magosha.
Doing so will indicate whether you need
to increase your contribution if there is
a shortfall in your savings. “Try and save
at least 15% of your gross income in a
retirement annuity or other retirement
savings vehicles,” says Brenthurst
Wealth’s Sonia du Plessis.
CHECK OUT: Glacier app by Sanlam;
Old Mutual’s Retirement Calculator
(https://goo.gl/xCufRS)
MARCH
Credit Report
Coming from the retail high of the end of
your holidays, this would be the ideal time
to ascertain whether credit reports reflect
your accurate financial information.
The National Credit Act entitles every
consumer to obtain one credit report
free of charge from every credit bureau
every 12 months. Keeping tabs on your
debt profile also helps with picking up
anomalies that can alert you to credit
fraud being committed in your name.
HANDY APP: TransUnion Mobile,
or SMS *120*8801#
MAY
APRIL
Education
Podcasts have become one of the most
effective ways of learning new skills.
“With a wide range of financial education
and money management tools available
it is no longer okay to be ignorant when
it comes to your finances,” says Lizl
Budhram, head of advice at Old Mutual
Personal Finance. The best thing about
podcasts is that they are intimate with
no ad breaks and can be listened to
whenever and wherever.
RECOMMENDED READING/LISTENING:
Harvard Business Review’s HBR IdeaCast:
https://goo.gl/CBvQaY
Simon Brown (weekly):
https://goo.gl/FmRM3Y
Moneyweb (daily): https://goo.gl/Av4Z3c
Maya on Money: https://goo.gl/xjN7rB
Stealthy Wealth: https://goo.gl/he27ei
24
finweek 18 January 2018
Insurance
It’s critical to take inventory of both
new and existing assets, adding new
possessions to home contents insurance
cover. “We are all looking to save money
in the current economic climate – take
advice from your broker or insurer and,
most importantly, make sure that you
insure what you can’t afford to lose rather
than what you are likely to have a claim
on,” says Infiniti Insurance CEO Sharon
Paterson. If you have dependants or earn
an income, it is also important to have the
appropriate life and disability insurance
in place.
FOR PRICE COMPARISONS:
www.insurancehound.co.za;
www.hippo.co.za;
www.compareguru.co.za
JUNE
Debt
Your aim ultimately should be to obtain
financial freedom, and this will require you to
have a plan to get debt-free. Sanlam’s Kenosi
Magosha advises that you check how much
of your money is going towards debt every
month, and to monitor how far you are
in your debt-payment plan. Tackle the
small amounts first, and
direct any freed-up cash
to pay off larger amounts.
CHECK OUT: Financial Mentor’s
Debt Payoff Calculator
(https://goo.gl/V151fW)
www.fin24.com/finweek
2018 FINANCIAL
CALENDAR
JULY
Save
If you wait until the end of the month to
save what’s left, you will never reach your
goal, warns Brenthurst Wealth’s Sonia du
Plessis. The trick is to get into the habit
of saving, and to save rather than spend
additional income like a tax refund or
part of your bonus, she says. Challenge
yourself to a week of buying nothing
for National Savings Month. Planning
and saving for larger expenses such as
international holidays are of paramount
importance, rather than having to finance
it via debt, according to Du Plessis.
CHECK OUT: www.savetaxfree.co.za
OCTOBER
Financial Advice
Take inventory of portfolio holdings
and rebalance investment accounts.
Du Plessis holds that a good financial
adviser can assist you in growing your
wealth exponentially, from advising you
not to make bad investment choices to
pushing you to save a realistic amount
for retirement. An adviser will show you
the value of having a long-term plan and
help you to understand market behaviour.
The Financial Planning Institute also runs
a financial planning week around World
Financial Planning Day in early October,
offering consumers free consultations
and financial planning workshops.
CHECK OUT: www.findanadvisor.co.za;
https://www.allangray.co.za/find-an-adviser/
AUGUST
File Taxes
You could save yourself from long
winding queues and penalties for late
filing by submitting tax returns earlier,
says Magosha. Fiduciary specialist at
AlphaWealth Judy Snyman suggests
keeping receipts of medical expenses that
were paid out-of-pocket and not by the
medical scheme during the year, as well as
donations to charities to reduce income
tax liability.
CHECK OUT: www.taxtim.co.za;
www.taxassist.co.za; www.sarsefiling.co.za
NOVEMBER
Medical Aid
Sanlam’s Kenosi Magosha suggests
checking your medical aid coverage
for what is covered and not covered to
avoid paying out-of-pocket for certain
treatments, medicine or procedures. She
notes that now is the best time to make
changes such as migrating to a different
product or a new medical aid – the cut-off
date for making such changes is usually in
early December. Use this time to compare
medical aid packages, contributions
and benefits – check if your healthcare
provider is in a network of providers linked
to your current or potential package.
CHECK OUT:
www.medicalaidcomparisons.co.za
SEPTEMBER
Your Will
According to Du Plessis, creating
or updating a will is planning
for the future of loved ones.
A will brings clarity and
certainty, allowing you to
determine who will benefit
from your estate, giving you
the opportunity to dispose of
your assets according to your
wishes. She recommends
reviewing your last will
and testament at least
every three to five
years and changing
it whenever there are
any major changes
in your life, such as
marriage, the birth of a
child, divorce, purchasing
new property or the death of
a beneficiary or executor.
CHECK OUT: www.lssa.org.za for a list
of attorneys who will draft wills for free
during October
DECEMBER
Holiday Bonus
Only 10% of your bonus should be
allocated to holiday spending, with the
rest earmarked for meeting financial
goals, advises Magosha. This could
include topping up your retirement
annuity, which will also lower your tax
bill, or increase the contribution to your
tax-free savings account. Also make sure
you’ll have enough cash until the January
payday. Do proper planning for the holiday
season by purchasing gifts in advance,
and take advantage of savings on Black
Friday at the end of November.
CHECK OUT: www.pricecheck.co.za
@finweek
finweek
finweekmagazine
finweek 18 January 2018
25
marketplace investment
By Niel Joubert
BEHAVIOURAL FINANCE
Five biases investors
need to guard against
As in other spheres of life, where finances are concerned, people often behave irrationally. Investors need to
be aware of the biases that cause this behaviour to ensure they don’t lose out.
t he investment guru Benjamin Graham is quoted as saying the
investor’s main problem, and even his worst enemy, is likely to
be himself.
This was before the days of behavioural finance, but rings
truer than ever.
As an investor, are you your own worst enemy by making irrational
mistakes which you are most likely unaware of?
This question goes to the heart of behavioural finance, which
combines the fields of psychology and finance in the decision-making
process, says Victor Ricciardi, finance professor at Goucher College in
Baltimore in the US and co-editor of the new book Financial Behavior:
Players, Services, Products, and Markets.
Investors’ decisions are based on a collection of cognitive
(mental) and emotional issues that can result in poor financial
outcomes, says Ricciardi.
Gerda van der Linde, executive director of the South African
Institute of Behavioural Finance, says investors are people and people
make mistakes. “It is therefore important to find out what mistakes
you are prone to.”
Maarten Ackerman, chief economist and advisory partner at
Citadel, says it is vital to know the biases that people have when
making investment (and other) decisions. If you understand them,
you can avoid them, he explains.
“We are all human beings and we have certain preferences.
It’s very important to understand how we think and how we view
certain things. How do we digest information and how do we let that
influence us to make proper decisions and how does that apply to
investments?” he says.
There are various money mistakes people tend to make, but some
behavioural biases are encountered more than others.
1. Loss-aversion bias
This bias is due to someone’s intense fear of losing. Individuals
assign more significance to a loss than to earning an equivalent gain
and this is known as loss aversion, explains Ricciardi. This emotional
loss feels twice as painful on the downside as the same fixed gain on
the upside.
These investors will typically hold on to losing investments too
long and sell winning investments too early. They therefore achieve
the opposite of what they want and increase their risk, while lowering
their returns.
2. Status quo or inertia bias
Ricciardi says some individuals suffer from status quo bias or inertia
by defaulting to the same decision or accepting the current situation.
This causes them to avoid many important financial decisions.
These individuals have the strong tendency or overwhelming
impulse to focus on their short-term spending at the cost of avoiding
saving or investing for the long term, according to Ricciardi.
26
finweek 18 January 2018
3. Over-optimism
People are inclined to overestimate their abilities and talent, which
results in overtrading of financial securities and lower investment
returns, says Ricciardi.
Over-optimism is something that investors need to guard against,
says Ackerman.
“If they are over-optimistic or think they know more about
something than the average person does, whether it is picking a fund
manager or making an investment, the danger is that they will have so
much conviction that they have a blind spot for the potential risks that
exist, and they might not take the downside into account,” he explains.
Ackerman says to guard against being overly optimistic you need
to look at your decision “from all sides and all angles and make sure
there isn’t a risk that you hadn’t seen”.
4. Confirmation bias
This is the tendency to look for information that agrees with what you
already think, says Ackerman. Investors look for things that support
their decisions instead of looking at them objectively.
“This is also very dangerous in terms of making investment
decisions,” he adds.
5. Anchoring
Individuals frequently place too much focus on the first information they
process, such as the original price of a share, and consequently have
difficulty adjusting their judgments to new information, says Ricciardi.
This is known as “anchoring”, where individuals will hold on to
or anchor bad financial decisions of the past and will avoid future
situations because they recall this negative experience.
Anchoring is when we use irrelevant, possibly even subliminal
inputs in making decisions. In this instance, recent experience will
influence your thoughts and decisions, says Ackerman.
How to avoid these mistakes
Ricciardi emphasises that people should learn more about finances.
“Learn about the value of portfolio diversification and investing for
the long term, and especially the benefits of understanding different
fund categories.”
He also advises investors to keep a journal. “Write about negative
investment experiences and what causes your bad financial
decisions. This will hopefully help you avoid these repeated mistakes
in the future.”
Lastly, his advice is to obtain the services of a financial professional:
“Seek the advice of a financial planner to assess your overall financial
health and to develop your short- to long-term goals.” ■
editorial@finweek.co.za
Niel Joubert is an award-winning financial journalist and recently completed his postgraduate
diploma in financial planning from the University of the Free State.
SOURCE: The South African Financial Planning Handbook 2017
www.fin24.com/finweek
marketplace directors & dividends
DIRECTORS’ DEALINGS
COMPANY
DIRECTOR
ADCORP
KVittee
ARGENT
TR Hendry
DATE
TRANSACTION TYPE
VOLUME
PRICE (C)
VALUE (R)
DATE MODIFIED
8 December
Sell
30,044
1726
518,559
5 January
2 January
Purchase
10,000
400
40,000
3 January
BEST AND WORST
PERFORMING
SHARES
SHARE
WEEK
PRICE
(c)
CHANGE
(%)
ARGENT
AF Litschka
2 January
Purchase
18,000
400
72,000
3 January
BEST
BAT
J Abelman
3 January
Purchase
3
£49.11
£147
9 January
Imbalie Beauty
6
50.00
BAT
N Durante
3 January
Purchase
3
£49.11
£147
9 January
PBT Group
16
23.08
BAT
G Giordano
3 January
Purchase
3
£49.11
£147
9 January
Conduit Capital
200
21.95
BAT
T Marroco
3 January
Purchase
3
£49.11
£147
9 January
Montauk Holdings
6000
20.58
BAT
N Sethi
3 January
Purchase
3
£49.11
£147
9 January
Stellar Capital Partners
60
20.00
BAT
JB Stevens
3 January
Purchase
3
£49.11
£147
9 January
Chrometco
10
-23.08
Atlatsa Resources
47
-21.67
BAT
J Vandermeulen
3 January
Purchase
3
£49.11
£147
9 January
ECHO POLSKA
R Weisz
18 December
Purchase
17,000
1816
308,720
3 January
ECHO POLSKA
R Weisz
19 December
Purchase
17,000
1812
308,040
3 January
KAAP AGRI
S Walsh
4 January
Purchase
2,900
4872
141,288
10 January
LIFE HEALTHCARE
MA Brey
8 January
Purchase
1,777
2528
44,922
9 January
LONG4LIFE
T Abdool-Samad
2 January
Purchase
100,000
484
484,000
9 January
LONG4LIFE
S Muller
8 January
Sell
550,550
471
2,593,090
9 January
9 January
WORST
Hulisani
800
-19.11
Dawn
83
-14.43
eMedia Holdings
385
-14.06
LONG4LIFE
S Muller
8 January
Purchase
550,550
471
2,593,090
NAMPAK
C Burmeister
27 December
Sell
3,143
1617
50,822
4 January
NAMPAK
C Burmeister
2 January
Purchase
16,399
1632
267,631
4 January
NAMPAK
AM de Ruyter
2 January
Purchase
122,563
1632
2,000,228
4 January
INDICES
NAMPAK
AM de Ruyter
27 December
Sell
18,348
1617
296,687
4 January
INDEX
NAMPAK
GR Fullerton
2 January
Purchase
45,961
1632
750,083
4 January
NAMPAK
AH Howie
2 January
Purchase
6,128
1632
100,008
4 January
4 January
WEEK CHANGE*
VALUE
(%)
JSE ALL SHARE
60 113.64
0.81
JSE FINANCIAL 15
17 317.53
0.39
JSE INDUSTRIAL 25
JSE SA LISTED
PROPERTY
80 359.86
0.28
674.50
-1.17
JSE SA RESOURCES
21 585.46
2.41
JSE TOP 40
53 184.36
0.67
NAMPAK
R Morris
2 January
Purchase
12,808
1632
209,026
NAMPAK
R Morris
27 December
Sell
6,061
1617
98,006
4 January
NAMPAK
M Seleoane
2 January
Purchase
9,192
1632
150,013
4 January
NAMPAK
EE Smuts
2 January
Purchase
42,714
1632
697,092
4 January
NAMPAK
I van Lochem
2 January
Purchase
3,064
1632
50,004
4 January
NORTHAM
C van Schalkwyk
28 December
Purchase
31,525
5196
1,638,039
3 January
SYGNIA
MF Wierzycka
29 December
Purchase
1,277
1375
17,558
5 January
SYGNIA
MF Wierzycka
29 December
Purchase
3,000
1400
42,000
5 January
CAC 40
552 394
3.98
TFG
DB Gedye
2 January
Sell
222
19550
43,401
5 January
DAXX
1 338 559
3.62
TRUSTCO
TRUSTCO
A Brand
A Bruyns
2 January
3 January
Purchase
Purchase
6,218
11,660
889
890
55,278
103,774
3 January
4 January
FTSE 100
773 102
0.78
HANG SENG
3 101 141
1.47
716 357
1.39
2 384 999
4.77
NASDAQ COMPOSITE
All data as at 14:00 on 10 January 2018. Supplied by IRESS.
NIKKEI 225
*Percentage reflects the week-on-week change.
P/E RANKING
SHARE
EPS RANKING
FORECAST
SHARE
F’CAST
EPS (C)
DIVIDEND RANKING
F’CAST EY
(%)
SHARE
F’CAST
DPS (C)
F’CAST
DY (%)
26.6
STEINHOFF
1.44
NASPERS-N
8870
2.5
STEINHOFF
201
MERAFE
4.03
BAT
5223
6.2
TEXTON
107
16.7
AVENG
5.54
CAPITEC
3874
3.7
REBOSIS
140
14.3
TEXTON
5.98
ASSORE
3869
10.1
EMIRA
146
10.5
LEWIS
6.25
SASOL
3485
7.8
REDEFINE
106
10.1
BLUETEL
6.51
ANGLO AMERICAN
3377
11.7
SA CORPORATE
46
9.5
ARM
6.63
KUMBA IRON ORE
3012
7.5
LEWIS
214
8.5
THARISA
6.76
ASTRAL
2890
10.4
ROCKWELL DIAMONDS
51
8.5
RAUBEX
6.92
TIGER BRANDS
2474
5.6
GROWTHPOINT
208
7.8
REBOSIS
6.97
MONDIPLC
2393
7.5
*Forecast EPS as a percentage of current share price
MMI HOLDINGS
157
7.8
@finweek
finweek
finweekmagazine
Andrew Konig
CEO of Redefine Properties
finweek 18 January 2018
27
cover story outlook
By Lloyd Gedye
WHAT 2018
Gallo/Getty Images
The months ahead are bound to be turbulent. We take
a look at the political and economic developments that
are likely to have an impact on the local economy.
28
finweek 18 January 2018
www.fin24.com/finweek
cover story outlook
HOLDS FOR SA
w
hat will 2018 hold for
South Africans? A new
president? A state
capture judicial enquiry?
Further ratings downgrades? A weaker
rand? Rising inflation? Interest rate
hikes? And how can South Africans
future-proof their investment portfolio
against such events?
Investments would be risk-free if
you could peer into the future and see
potential stumbling blocks ahead of time.
But crystal balls are the stuff of fairy tales.
Investors therefore need to pay close
attention to potential risk factors.
Many of the fund managers that
finweek spoke to after the ANC national
elective conference in late December
see the investment outlook for 2018 as
positive and likely to offer good returns.
Many, however, also offered the proviso
that there is little margin for error.
In line with this, they identified key
issues to watch in 2018 which could
affect investment decisions. These range
from which faction of the ANC is likely
to win the current struggle for power, to
what impact the expected tightening
of global monetary policy will have on
the economy.
More ‘wait and see’
Shortly after Cyril Ramaphosa’s election
as the president of the ANC in December,
the rand rallied to a nine-month high of
R12.55 against the dollar. It was clear
@finweek
finweek
finweekmagazine
that his victory had boosted positive
sentiment in the market.
However, many fund managers insist
that the positive sentiment is overblown.
Geoff Blount, managing director
of BayHill Capital, thinks the markets’
reaction to the results of the ANC’s
elective conference has been far too
positive. “The markets have got it
wrong,” he states. “They’ve priced in a full
Ramaphosa slate victory.”
Markets reacted “almost as if
Ramaphosa had control of the ANC’s top
six and the national executive committee
(NEC). But they are split down the
middle. The market is going to have to
digest that – what does it mean?”
Blount believes it was a “miracle”
that Ramaphosa was elected and the
markets were naïve to believe that it was
a foregone conclusion. Investors shouldn’t
underestimate the battle Ramaphosa is
going to face to turn the country around,
Blount warns. (See sidebar.)
Last year almost everything had been
placed on hold until after the elective
conference. But, explains Blount, now that
the conference hasn’t delivered an outcome
that settles the matter, uncertainty will
prevail into 2018.
Citadel’s chief investment officer
George Herman believes the markets
expect too much from Ramaphosa, a man
who doesn’t have a full mandate to turn
the country around.
“With the top six he got, there is no
finweek 18 January 2018
29
way of implementing big changes.”
Herman argues that the markets are
once again in limbo with a “hamstrung”
Ramaphosa and that he’ll therefore have
to settle for smaller issues, the “lowhanging fruit”.
“[The markets] are as wary and
defensive as before,” he says.
Battle for the ANC:
The key indicators
According to a number of South African
fund managers that finweek spoke to, the
first key sign as to which faction is winning
the war for the ANC could be who delivers
the State of the Nation Address and opens
Parliament in early February.
Another key indicator, according to the
fund managers, is the appointment of
a new head of the National Prosecuting
Authority (NPA).
In early December 2017, the North
Gauteng High Court ruled that
Ramaphosa had to appoint a new head
of the NPA within 60 days. This means
SA should have a new NPA head by
next month.
“Who Cyril appoints will be a
clear indication of where he is going,”
says Blount.
The state capture judicial enquiry is
seen as another indicator of who is really in
charge. Wayne McCurrie, senior portfolio
manager at Ashburton Investments, says
there is going to be no stopping of the state
capture probe by an independent judge as it
has to begin work in early January and has
Geoff Blount
Managing director of
BayHill Capital
George Herman
Chief investment
officer at Citadel
INTERNATIONAL RISKS IN 2018
cover story outlook
So what are the key international events
or developments that fund managers are
concerned about?
Not surprisingly, US President Donald
Trump features strongly.
Peregrine Treasury Solutions’ Bianca
Botes warns that investors should keep
an eye on Trump’s policies, whether that
be his recent tax reform, which was not
favourably received, or his escalation of
tensions with North Korea. With Trump
prone to online provocation, it makes him
a bit of a volatile factor, she says.
Other fund managers suggest that the
US’s tougher stance on trade under
Trump is a factor to watch as it is a major
threat to the global free-trade regime.
The BlackRock Investment Institute
argues that any breakdown in the current
North American Free Trade Agreement
(Nafta) negotiations would be an
“ominous sign” for global trade.
BayHill Capital’s Geoff Blount singles out
potential political unrest in the Middle
East, which would have an impact on oil
prices, as something to keep an eye on.
Another potential risk, he argues, would
be if the bitcoin bubble burst. While
Blount does not see this as a systemic
risk, he believes its impact would be
widely felt.
Other fund managers pointed to 2018
elections in Italy, Brazil, Russia and
Mexico as events to watch, as well as
the October deadline for the UK-EU
agreement on the Brexit deal. ■
A ‘HAMSTR
The ANC’s national elective conference in December
was expected to be a key signifier of where the
country was heading in 2018.
However, with a unity slate elected and no clear
victory for either faction, many are wondering if
things are any clearer for the future of the ANC and
the country.
Wayne McCurrie from Ashburton Investments
says there is a lot of speculation post Cyril
Ramaphosa’s election as ANC president as to
what he will be able to accomplish. This is because
Ramaphosa does not have “absolute power” in the
ANC, which he may have had if we had seen an
unconstrained win by the Ramaphosa camp.
30
finweek 18 January 2018
www.fin24.com/finweek
Gallo/Getty Images
six months to finish the job.
“If all the stories we have heard about
state capture are true, there are very senior
people in the Zuma camp that are going to
be implicated,” says McCurrie. “Very senior
people in the ANC are going to become
embroiled in the probe. There are going to
be a lot of sleepless nights.”
February’s National Budget is going
to be another key indicator, according to
McCurrie. He foresees that South Africans
can look forward to a “whole swathe” of tax
increases, and that South Africans should
definitely expect a VAT increase.
“I don’t think there is another option,”
he says.
Key considerations to look out for in
the Budget are the funding of free tertiary
education and the ongoing financing crisis
of many of the country’s state-owned
enterprises (SOEs).
McCurrie says one way in which
Ramaphosa could solve a lot of
government’s fiscal problems is by
privatising parts of Eskom quickly.
“Ramaphosa needs to sort out Eskom
and the other SOEs. Whether he will is
another story. It will all come down to
political will.”
Herman agrees that Ramaphosa’s
handling of Eskom will be key. “The
contingent liabilities that the state will
inherit from Eskom is absolutely scary,”
he adds.
Ramaphosa has very little time to act,
states McCurrie, as Eskom needs funding
of R20bn by May/June and South African
CHINESE RISKS IN 2018
cover story outlook
A number of fund managers have identified
China’s high corporate debt levels as a risk
factor in 2018.
In its 2018 outlook, Credit Suisse
argued that any downturn in Chinese
growth would be a risk to the global
economy and markets.
“An apparent policy bias toward
stability and credit restraint in China is
encouraging, but not without risks for
asset prices, the economy and the Chinese
renminbi,” stated Credit Suisse.
The BlackRock Investment Institute
said in its 2018 outlook that the muchneeded economic reforms in China around
debt levels indeed pose a risk to China’s
growth and could trigger “temporary
credit crunches”.
South African fund managers are less
concerned.
Ashburton Investments’ Wayne
McCurrie says that all the talk about
tightening monetary policy in China in
2018 is overblown. “China goes through
these phases, then they tighten up a little,”
he says. “The Chinese government will not
let growth stall too much.
“They are one of the few governments
in the world where if something goes
wrong, they have the ability to do
something about it.”
BayHill Capital’s Geoff Blount is also not
worried about China in 2018. “China will
manage its way through its slightly slower
growth as it transitions from a manufacturing
economy to a consumptive economy.” ■
UNG’ RAMAPHOSA?
However, McCurrie insists that it would be wrong
to argue that Ramaphosa can’t accomplish anything.
One of the biggest problems under a Jacob Zuma
presidency has been policy uncertainty, he explains,
adding that under Zuma, maverick discussion
documents and policy plans would emerge and then
get stuck in court, subjected to legal challenges as it
didn't follow the correct processes.
“You never knew what was coming next. The
whole free education thing was out of the blue,”
says McCurrie, referring to Zuma’s announcement
of free tertiary education for poor and working-class
students at the ANC conference in December.
McCurrie says that the market is certainly looking
@finweek
finweek
finweekmagazine
to Ramaphosa for policy certainty, specifically in the
mining and energy sectors.
Peregrine Treasury Solutions’ Bianca Botes
maintains there is still “significant risk” in the market
due to the fact that the full Ramaphosa slate was
not elected.
While his victory has certainly restored positive
sentiment in the South African economy and in the
ANC, he won’t be able to resolve all the problems,
she argues. “He is stuck between a rock and a hard
place,” says Botes.
The recent ANC elective conference decision
on land redistribution without compensation is an
example of ANC policy that would spook the market,
Ramaphosa has very little time to act, as
Eskom needs funding of
R20bn
R8bn
by May/June and South African Airways
needs
by March.
elaborates Botes. “The market doesn’t like that kind of
talk,” she says. “Those farms are bonded with banks;
a move like that could trigger a financial collapse.”
McCurrie is less concerned about the land
expropriation policy, arguing that when it comes to
implementation the impact will be “marginal”.
BayHill Capital’s Geoff Blount says that with
Zuma still in the Presidency, an ultimate Ramaphosa
camp victory is not a foregone conclusion. Blount is
optimistic that the Ramaphosa camp will prevail, but
in order to do that, Ramaphosa will need to neutralise
David Mabuza and Ace Magashule in the ANC top six.
“It will be hard to drive a recall for Zuma unless he
faces a criminal prosecution,” says Blount. ■
finweek 18 January 2018
31
cover story outlook
Fund managers are predicting three to four interest rate hikes in the US this year
and a tightening of monetary policy in Europe, China and Japan to follow.
Airways (SAA) needs R8bn by March.
According to McCurrie, the market
will also look to Ramaphosa to appoint
competent people into government and
SOEs. The bad eggs in government and
parastatals who need to be replaced could
be as few as 30 to 50 individuals, he says,
insisting that these people would need to
go in order to turn things around.
Regarding further ratings downgrades,
Blount says that if Ramaphosa shows a
commitment to turning the country around,
the credit rating agencies should give him
the benefit of the doubt.
But Herman disagrees, stating that
further rating downgrades are a certainty.
Shutterstock
Outlook for the rand, inflation and
interest rate hikes
According to Bianca Botes from Peregrine
Treasury Solutions, interest rate hikes that
are expected in the US will put pressure on
the rand (see sidebar).
Botes argues that the rand is currently
overvalued and expects it to move to a
slightly weaker level of R13 to the US dollar.
She insists the rand’s fundamental value is
closer to R13.50 and says she doesn’t see
the rand going above the R14 level against
the dollar.
McCurrie explains that the rand is a
structurally weak currency and that the
reasons for its structural weakness are not
going to disappear overnight.
This is why the rand vacillates between
cycles of massive weakness and huge
strength, with these cycles often driven by
commodity cycles, according to McCurrie.
Blount, on the other hand, believes that
the rand could surprise on the upside. He
says his position is a strong outlier but
he feels that the rand could strengthen
to R12/$.
“If it looks like Cyril is regaining lost
ground and starts putting in place the right
management structures, then the rand
could surprise on the upside.
“There will either be a strong rand at
about R12 to the dollar, or a weak rand at
R15/R16 to the dollar. There is no middle
ground,” says Blount.
In general, says Blount, 2018 could be
a better year for South Africans than 2017,
but this is “Cyril-dependent”.
TIGHTENING
GLOBAL MONETARY POLICY
On the international front, many fund managers
have raised concerns about tightening global
monetary policy in 2018 and the credit crunches
this could create.
Franklin Templeton Global Equity Group
singled out tightening global monetary policy as a
key factor in its 2018 outlook.
“The massive central bank stimulus required
to recover from the 2007-2009 global financial
crisis has led to extreme conditions that heighten
systemic risk, in our view,” the group stated
last month. “Central bank balance sheets have
ballooned to unprecedented sizes, creating an
inorganic liquidity backstop, the removal of which
could threaten elevated asset prices.”
Fund managers are predicting three to four
interest rate hikes in the US this year and a
tightening of monetary policy in Europe, China
and Japan to follow.
In its outlook for 2018, Credit Suisse argued
that tighter money supply is not always bad for
markets, but the tightening of monetary policy
could create “significant pockets of volatility” in
both currencies and stock markets.
According to Schroders Investment
Management, central bank policy tightening is
a certainty.
“We believe the market is underestimating
the negative impact from rising rates,” Simon
“There will either be a strong rand at about
R12
R15/R16
to the dollar, or a weak rand at
to the dollar. There is no middle ground.”
Webber, lead portfolio manager at Schroders,
wrote in a statement.
Credit Suisse suggests that the impact of
rising interest rates is a key medium- to long-term
issue, but will be less pertinent for 2018. The key
factor, it says, is how far the central banks will go
with their rate hikes.
However, the South African fund
managers that finweek spoke to appear to
be less concerned.
“We are already into a normalising global
economy post the crisis of 2008,” says BayHill
Capital’s Geoff Blount, who argues that the
market hasn’t figured out yet that it’s not in as
bad shape as it thought it was.
The global depression that was averted in
2008 has taken 10 years to normalise and the
US, closely followed by Europe, is leading that
charge, explains Blount.
According to him, the US is now heading
towards the expensive side, with Europe offering
attractively priced investments. “It’s a good
time for global growth and global equities,”
Blount believes.
“It’s an investor-friendly market,” he says, but
adds that where you invest is important.
Schroders predicts that quantitative easing
will end in Europe in September 2018 and it
forecasts interest rate hikes for 2019. ■
Botes maintains that as long as the rand
remains stable, inflation should remain in
the target range. But she adds there is not a
lot of room to decrease interest rates.
If South Africa did see an interest rate
cut, it would be the last one for some time,
reckons Herman, explaining that the US is
expected to raise interest rates this year,
which will tighten global monetary policy,
placing particular pressure on emerging
economies’ currencies.
According to McCurrie it is normal
for interest rates to go up, but as long
as global inflation doesn’t pick up, there
should be no excuse for the tightening of
monetary policy. ■
editorial@finweek.co.za
32
finweek 18 January 2018
www.fin24.com/finweek
in depth Steinhoff
A Steinhoff International Holdings NV logo on display
outside the company’s offices in Stellenbosch.
S
N
O
I
T
S
4 QHUOFEF MUST ANSWER
STEIN
le to calm
international group has done litt
the
er,
mb
ce
De
in
s’
itie
lar
gu
irre
Since admitting to ‘accounting
t untainted.
By Marcia Klein
t – some assets were likely lef
los
be
t
no
y
ma
all
t
bu
rs,
fea
investors’
t ime is running out for Steinhoff International to
existing management around as they are able to point
produce results for the year to end September
out “where the bodies are buried” and help with the
if it wants to avoid being suspended from the
investigation and retrieval of financial information.
Frankfurt and JSE exchanges.
A number of announcements in 2017 outright
Management and the board have not done much
denied allegations made by the German publication
to set the record straight in the more than a month
Manager Magazin, as well as legal issues in the
since they admitted “accounting irregularities” and
Netherlands, where it is registered, and Germany,
got rid of CEO and chief culprit Markus Jooste as the
where it has its primary listing.
share plunge lost investors nearly all of their money.
Turning these denials around into an admission
They have until 31 January to give investors,
that things were not as they seemed while avoiding
authorities and lenders some idea of Steinhoff’s
criminal implication is what they are no doubt
actual financial position and its plan
scrambling to achieve as they prepare
to put things right. Until then, apart
Management changes have done to reinvent Steinhoff’s history, going
from announcing total group debt
back at least three financial years.
little to appease investors given
of €10.7bn and a positive outlook for
The management changes are
Steinhoff’s operating companies at
curious. Ben la Grange stepped
the unlikelihood of management, down as chief financial officer (CFO)
mid-December, they have done little
to calm investor despair. They have
“to focus on the preservation and
or the board for that matter,
shuffled the very same management
procurement of liquidity” and to finalise
having been unaware of or not
team that oversaw the disaster and
financials. He was replaced by Philip
launched an investigation into what no
Dieperink while Johan Geldenhuys
involved in what was going on.
one in the group seems ready to admit
is now head of treasury – both men
they may already have known.
fulfilling the roles that La Grange is
A 4 January update said only that talks with funders
supposedly redirected to oversee.
were ongoing, that operating profit had stabilised to a
Danie van der Merwe is now acting CEO,
degree and that some business units needed funding.
Alexandre Nodale deputy CEO and Louis du Preez
Management changes have done little to appease
commercial director.
investors given the unlikelihood of management, or
They are all tasked with preserving and “procuring”
the board for that matter, having been unaware of
liquidity, completing financial statements for 2017
or not involved in what was going on. One analyst,
and restating at least two prior years, and finalising an
speaking off the record, said the group was keeping
investigation into “irregularities” currently pinned on
@finweek
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finweek 18 January 2018
33
in depth Steinhoff
the previously lauded and feared Jooste alone.
To date, the most comprehensive analysis comes
from a relatively obscure US outfit which was shortselling Steinhoff, Viceroy Research Group, which said
management had used off-balance-sheet entities to
obscure losses and enrich themselves.
Among a slew of allegations is that Steinhoff bought
bad businesses which, at least on paper, miraculously
improved post-acquisition. The report highlighted alleged
tax evasion, document forgery and fraud, and pointed to
off-balance-sheet vehicles Campion Capital, Southern
View Finance and Genesis Investment Holding, as well as
JD Consumer Finance and Capfin, which were allegedly
used to artificially inflate earnings.
With investigations and legal action mounting in
Germany, the Netherlands and South Africa, Steinhoff
is left having to answer a number of questions.
STEINHOFF INTERNATIONAL HOLDINGS
Cents
10 000
7 500
5 000
2 500
0
2014
52-week range:
Price/earnings ratio:
1-year total return:
Market capitalisation:
Earnings per share:
Dividend yield:
Average volume over 30 days:
2015
2016
2017
2018
R3.75 - R74.01
-88.77%
R30.97bn
5.68%
60 159 090
SOURCE: IRESS
Can it survive?
Not in its current format or under its current name,
“Every single investor can sue them for loss in the
says Wayne McCurrie, portfolio manager at Ashburton
share price, with shares purchased based on the financial
Investments. “That does not mean there is no value
statements. This can go on forever,” says McCurrie.
for shareholders, and it doesn’t mean the company is
Vestact portfolio manager Byron Lotter says: “It is
worth nothing,” he says. “They need liquidity and they
important to note – and what the market has recently
will want to try and get some value for shareholders by
been reminded of – that Poundland managed to raise
essentially splitting the good assets from bad assets –
capital as a separate subsidiary in its own right and
like African Bank.”
had a record festive season. Steinhoff is definitely not
The problem is now that what it published in the
a business worth zero.”
past cannot be trusted, it is difficult to
The current share price indicates
know what the good and bad assets are.
“To be an investor alongside investors are expecting the worst.
McCurrie says companies unaffected
“I have a feeling the business will
someone [Christo Wiese]
by the accounting scandal can be sold
survive and the share price should revalue
or listed separately. The 80%-owned
the value of the underlying
who up to recently created reflecting
Steinhoff Africa Retail (Star), which was
businesses, but there might be a few
separately listed in September and owns
immense wealth seemed like more shocks on the way,” Lotter says.
numerous retail brands including Pep,
While Steinhoff could sell operating
such a good idea.”
Ackermans, JD Group, HiFi Corp and
businesses, Lotter points out that it was
Incredible Connection, would more than
the one buying distressed businesses, and
likely be up for sale, or it might have to be split or
selling could be difficult.
Pepkor sold to someone else, says McCurrie. “As far as
we know now it is a good asset and not implicated in
What will it restate?
accounting frauds and problems. We are reasonably
Analysts say there is no point in guessing at this
confident Star is clean.
stage. Steinhoff last reported – for the nine months
“We also know with some degree of accuracy that
to end June – that revenue increased by 48%,
the Pepkor asset is a good asset. Poundland (UK)
largely reflecting the acquisitions of Mattress Firm,
and Mattress Firm (US) are not tainted because
Poundland and Fantastic Furniture, while organic
Steinhoff only just bought them – they may only be
revenue grew 8%. In the six months to March 2017,
worth half of what it paid for them, but they weren’t
debt was €9.5bn and cash €3bn.
around [in the Steinhoff stable] in 2016 and 2015 so
All of this is now fictional, and analysts are wary to
there may be some value in them.”
hazard a guess.
McCurrie says the rot is likely to be found
It is likely that everything is restated, says
in companies like French furniture retailer Conforama,
McCurrie. “When you encounter this kind of
bought in 2011, and furniture and household
corruption and fraud, there are generally two
goods chain Poco, with operations in SA, Australia
possibilities – they can overstate profits or overstate
Christo Wiese
and Germany.
assets. They have more than likely done both.”
Former chairman and major
shareholder in Steinhoff
Once split into good and bad, the “bad” company
Tax evasion or avoidance will also surely be an
will be subject to all kinds of legal implications but will
issue, but with restated results the tax implications
be bankrupt, giving those affected little recourse.
are unclear.
34
finweek 18 January 2018
www.fin24.com/finweek
in depth Steinhoff
Bradley Preston, head of listed investments
at Mergence Investment Managers, comments:
“Unfortunately, there are potentially a wide range of
possible outcomes and it is difficult to know anything
concrete. They are either unsure or hesitant to release
information, and there is uncertainty around the net
cash and debt position.
“We can value some underlying
entities, but until we understand
the liquidity position, the overall
group gross debt position is
difficult to tell.”
“But he may have been complicit in things that were
either illegal or ethically questionable. Did he know the
extent? It seems unlikely.”
“If he didn’t know, why didn’t he know?” asks
McCurrie, adding that Wiese has been chairman, has
known key role players like Jooste “forever”, and has put
a vast amount of his wealth into Steinhoff.
Jooste and his team built Steinhoff,
but Wiese was the architect of putting
Pepkor into Steinhoff and putting
Shoprite into Star, a deal which has
now fallen through.
His reputation is now in
Were crimes committed?
tatters. “You don’t recover from
Yes, says McCurrie. “Maybe this
this,” says McCurrie. “You may
did not start as an economic
not be implicated, you may have
crime,” he says. Often, someone
been misled or did not do your
looks at their financial statements
homework, but your reputation will
which show the company did not
never recover.”
make as much profit as promised, and
Lotter says Wiese has done “a huge
massage the numbers that year and hope to
amount for this country”.
trade out of it in the next year. “These never start with
“I still have lots of respect for him,” he says. “No
a criminal intent; it starts by effectively starting to
one would put that amount of wealth in – he was
hide the truth until you end up in a criminal position.”
duped. He made a very bad investment decision, but
This may not be a case of money
he will come out of this.”
Analysts say there is no point
being physically stolen, but crimes
Whichever way it pans out, Wiese’s
guessing at this stage. It last reported
perpetrated to make financial
big
plan to build a massive retail
– for the nine months to end June –
statements look better so the share
conglomerate is on hold. “Now it is
that revenue increased by
price does not fall.
about saving face for Steinhoff.”
McCurrie points out that this
What can investors and corporate
cannot be executed by one person.
“This was a massive company – one
South Africa learn from this?
largely reflecting the acquisitions
“The fact is that minority shareholders
person doesn’t sit at his computer late
of Mattress Firm, Poundland and
were coming second and customers
at night and commits this [type of]
Fantastic Furniture.
were coming second,” says the analyst.
fraud. Who is involved? Every single
“People have known that, but to be an investor
senior person, board member or member of the tax,
alongside someone who up to recently created
audit or ethics committee is going to be embroiled in
immense wealth seemed like such a good idea.”
this for years. If a senior person didn’t know about it,
Investors tend to follow wealthy investors
why didn’t they know?
blindly, but Steinhoff has been cause for
“If the financial director, chairman,
some reflection.
and independent directors didn’t
McCurrie says: “Don’t think for a
know, they should have known, as
moment you are going to sniff out
should the auditors.”
a fraud like this before it happens.
That Jooste was the only
All investors can do is to go back
culprit seems unlikely and points
to Investments 101 – don’t put all
to “negligence or complicity” of
your eggs in one basket and you
other executives and the board,
will not be destroyed by things
not to mention the biggest
like this.”
investor, Christo Wiese, who
He adds that companies could
ploughed his money into Steinhoff
learn not to put too much power in a
and was the architect of various deals,
single person’s hands.
including injecting Pepkor into it and
“There will be a lot more focus going
mooting (twice) its takeover of Shoprite.
Analysts are split on Wiese’s role. “It seems unlikely forward on the ethics of a company,” McCurrie says,
he was complicit as he actively moved a huge amount and if it is involved in something suspicious there
will be far more of a reaction by the market after
of wealth into this entity in the last few years, so it is
Steinhoff than before. ■
difficult to imagine he had known this was a Ponzi
editorial@finweek.co.za
scheme,” the analyst speaking off the record says.
Wayne McCurrie
Portfolio manager at
Ashburton Investments
Images: Supplied
Gallo Getty Images/Waldo Swiegers/Bloomberg
48%,
@finweek
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finweekmagazine
Byron Lotter
Portfolio manager at
Vestact
Bradley Preston
Head of listed investments
at Mergence Investment
Managers
finweek 18 January 2018
35
on
the
money
>> Entrepreneur: The food delivery service making a difference p.38
>> Motoring: We test-drive the third-generation BMW X3 p.41
>> Careers: How to get out of that job rut p.43
CEO INTERVIEW
By Lloyd Gedye
Getting Cell C deeper
into the black
Following a recent restructuring and the launch of a new video-on-demand service, CEO Jose Dos Santos believes
the long-struggling mobile operator is in a much stronger position today.
t 36
finweek 18 January 2018
of unallocated spectrum into the
WOAN, and that operators will then
share new infrastructure. The proposal
was slammed by the GSMA in a report
released in August last year, which found
that “network competition produces
faster and more extensive network
coverage” than wholesale open access
networks for 4G services.
However, Dos Santos says Cell C is fully
behind the bill and insists it only requires
a few “cosmetic word changes”. Public
comment on the bill closes at the end of
the month [January].
Jose Dos Santos
CEO of Cell C
“What you need from
shareholders is the value
they bring in terms of
leadership, strategic
thinking and vision. We
need strong shareholders
that share the same vision
as Cell C management.”
The recapitalisation
2017 was the year that saw Cell C finalise its
recapitalisation process. Dos Santos says
the recapitalisation process began in early
2014, when Cell C’s existing shareholders
decided they wanted to do something
about the company’s debt burden.
“We considered selling the business;
we considered bringing in international
players,” he explains. “We considered
unbundling.”
The recapitalisation process which was
concluded in August last year saw Blue
Label Telecoms’ subsidiary The Prepaid
Company take a 45% stake in Cell C, while
Net1 UEPS Technologies took a 15% stake.
It also saw Cell C reduce its debt by R9bn,
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Photos: Supplied
he last few years as CEO of Cell C have
been challenging for Jose Dos Santos,
but with a recapitalisation of the
company completed and a new videoon-demand business launched, 2018 is
shaping up to be a big year for the company.
South Africa’s third-largest mobile
provider has been steadily stealing
market share from its two more dominant
competitors, MTN and Vodacom. At
the same time, SA’s mobile players have
faced increased calls from the public and
government for data rates to fall.
Dos Santos says that price is relative
to cost: “We have failed as an industry to
reduce the input costs.”
One example is how mobile
infrastructure has been replicated over and
over by competing mobile players, when
they could be sharing infrastructure, Dos
Santos says. By sharing infrastructure,
input costs can be lowered. He argues that
if banks can share infrastructure, mobile
companies could do the same.
Cell C is therefore firmly behind the
government’s plan for a wireless open
access network (WOAN), which would
see infrastructure sharing, he explains.
“We’re very supportive of that process.”
The Electronic Communications
Amendment Bill proposes the placement
on the money spotlight
leaving less than R6bn owing.
Dos Santos says that he is happy
that Blue Label is now Cell C’s biggest
shareholder. “What you need from
shareholders is the value they bring in
terms of leadership, strategic thinking and
vision,” he maintains. “We need strong
shareholders that share the same vision
as Cell C management.”
Dos Santos argues that this is what
Blue Label brings to the table.
Speaking about the unhappiness that
the recapitalisation process caused for
BEE partner CellSAf, Dos Santos says any
shareholder who’s “holding is diluted in
one way or another is never going to be
happy”. CellSAf’s shareholding was diluted
from 25% to 7.5%.
He insists there was no other
alternative and that CellSAf is part of a
better company today.
Pay-TV player
Dos Santos says it was a two-and-ahalf year journey to get to the November
2017 launch of black, which is focused on
delivering entertainment and content. The
platform is network agnostic, meaning it
will be available to any consumer with an
internet connection. (See sidebar.)
“I am under no illusions,” he says. “This is
a long-term play. […] It’s going to be tough.”
Dos Santos calls the fit between a
video-on-demand business and a mobile
player a “hand-in-glove approach”.
Demand for data is growing because
people are consuming increasingly more
content online, especially data-heavy
video content.
With black, Cell C can push its own,
and other content, to the user. The mobile
operator’s business show, Hangman,
which concluded recently, is one example
of its own content. “Content services
around the world are growing as fast as
mobile did in its early days,” he says.
When asked how Cell C will succeed in
the video market where others have failed,
Dos Santos states that he doesn’t see the
established players as competitors. “There
is a whole new market out there,” he
insists, “a whole new world of consuming.”
black’s job is to innovate and create new
products to supply that market, he says.
Where previous video-on-demand
offerings allowed the consumer to pay via
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finweekmagazine
According to Dos Santos, the biggest barrier
to entry for streaming of video-on-demand
services is the cost of data. This is why
Cell C has re-dimensioned its network to offer
customers a more effective rate, essentially
50%
60%
to
What can
consumers
get on black?
black’s initial video-on-demand offering
includes up to 5 000 movies, series,
music and documentaries that can be
accessed for R10 per day or R39 per
month. Flexi Premium will cost R39 per
day or R99 per month.
Television series available include
Mary Kills People, Catastrophe, Power,
High Rollers, Generations, Skeem
Saam, Uzalo and Survivor’s Remorse.
Cell C CEO Jose Dos Santos says
that black is currently in discussions
with local production companies to
bring South African fans local content
and provide a platform for local talent to
showcase their work.
Customers can access 60 live
TV channels, which include music,
news, travel and lifestyle, movies
and children’s content. This can be
accessed for R189 a month, or an
18-channel offering can be accessed at
R69 a month.
black also offers access to five
European football TV channels, namely
Manu TV, Barca TV, Liverpool TV,
Chelsea TV and Real Madrid TV. Each of
these can be accessed for R5 a day or
R25 a month.
Further, black recently signed an
agreement with Fox Networks Group
(FNG) Europe & Africa, which brings
eight new channels to black, including
FOX, FOX+, FOX Sports, FOX Africa, FOX
Life and National Geographic.
Customers can also purchase
(from R59) or rent (from R29) the latest
movies, and black have launched their
own set-top box, the blackBOX, which
can be purchased for R1 499. ■
cheaper than normal data rates.
credit card or a debit off their accounts,
black allows people to pay for content
using their airtime and a black voucher will
soon be launched too.
According to Dos Santos, the biggest
barrier to entry for streaming of videoon-demand services is the cost of data.
This is why Cell C has re-dimensioned
its network to offer customers a more
effective rate, essentially 50% to 60%
cheaper than normal data rates, he says.
These black data products will allow
customers to access data from as little
as 1c/MB or R7.50 per GB, explains Dos
Santos. The data bundles, which vary
in size between 1G (R30) and 200G
(R1 499), can only be used to stream
black content on the Cell C network. ■
editorial@finweek.co.za
finweek 18 January 2018
37
on the money entrepreneur
By Natalie Greve
Boxing an organic lifestyle
w
Munching Mongoose delivers seasonal, organic food from small-scale farmers to Johannesburg customers.
hat makes a geologist quit his day job
in favour of starting up a fresh food
delivery service? A love of seasonal,
organic food, a belief in the quality of
local produce, and a desire to get people back into their
kitchens and away from the takeaway menu, says
Munching Mongoose founder Brad Meiring.
Munching Mongoose is a three-year-old organic
food delivery service that liaises with local farmers
and artisans to find the best mix of seasonal produce
that is delivered to a customer’s door. Each food box
can be customised, while items such as meat, dairy
and artisanal products can be added to the standard
vegetable box.
The company liaises with its suppliers on a Monday
and starts “building” its basic box for the week based
on availability and budget. Customers then have until
11AM on a Tuesday to make any changes, substitutions
or additions to their boxes. Orders are then placed
with suppliers, and deliveries made to customers on
a Thursday.
“The produce is literally taken out of the ground
the day before it’s delivered to the customer. Even the
meat and dairy arrives the day before we ship it out,
we don’t hold stock for long, and the meat is never
frozen,” Meiring told finweek during a recent visit to the
company’s facilities in Muldersdrift.
Produce is sourced primarily from within Gauteng,
with some originating from North West and the
Lowveld. Every week, a surprise product from a local
producer is also included.
“My biggest passion is giving people an awesome
experience that comes to their house every week. The
concept is centred around great food, but it also saves
time and money in terms of logistics,” he says.
How did you start Munching Mongoose?
I’m a geologist by trade, but I wasn’t really happy where
I was in my career. In 2014, while chatting to a friend
who had the idea of bringing in local produce from the
Lowveld, we quickly realised that that model would
work phenomenally well in Johannesburg from a
convenience and a quality point of view.
We ran the business out of my house for about a
year-and-a-half while we had other jobs, starting with
12 customers – mostly friends and family. The business
was completely bootstrapped and was started on the
tightest shoestring budget you can imagine.
We each put in a little bit upfront, and everything
we made got put back into the business. After about 18
months I went in full-time, and we’re only breaking even
now. The business is still totally self-funded.
38
finweek 18 January 2018
How many customers do you currently have?
We have about 250 active customers, with some
taking weekly orders, some fortnightly, and some on
an ad-hoc basis. Most of our customers are in the
upper LSM groups between the ages of 30 and 45
and are mostly young families. We started with one
delivery van, but we have since had to outsource
delivery to keep up with demand.
In terms of our price point, we are on par with other
organic food outlets but are more expensive than a
non-organic, standard greengrocer.
How has the business evolved in the last
few years?
When we first started, it was a mystery box and
customers had no choice as to what they were getting.
You got what was available. Subsequently, we’ve
changed it so that we still “build” the box for you on a
weekly basis, and what goes into that box is still based
on seasonality and availability from our farmers. You do
have some flexibility to adapt your box each week, and
we also have add-on products, such as meat, dairy and
breakfast packs.
We’ve come to realise that customers love choice,
but they also hate choice. We give them enough choice
in terms of flexibility, but we take the basic decisionmaking away. You need to buy into the concept of local,
seasonal, good-quality produce and be a little bit flexible
in terms of not always getting the same thing.
We have about
250
active customers, with
some taking weekly
orders, some fortnightly,
and some
on an ad-hoc basis.
Why do you think the concept appeals
to customers?
What we’ve found is that a lot of customers that have
used us had previously fallen into a bit of a rut.
You go to the supermarket and you fill your trolley
with the same things.
Nowadays people are so used to getting what you
Brad Meiring
Founder of Munching
Mongoose
Munching Mongoose currently outsources delivery
in order to keep up with demand.
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on the money entrepreneur
The Siyakhana urban food garden in Observatory,
Johannesburg, is one of Munching Mongoose’s partners.
to take action each week to choose what you want to
buy. There are also other box schemes, but those are
very limited generally speaking, where it’s just fruit and
veg. So we’ve done a box-scheme idea, but it’s a greater
array of produce with flexibility.
You hear a lot of the same tips for entrepreneurs,
but I think the support structure you have is
hugely important. I’m so fortunate in that my
wife is patient and has given me the freedom
to go with this and run with it. If you start a
business, from my experience, it takes time and
you’re putting in money, you’re not taking out
How do you find local organic farmers
money for a good few years. As long as you have
someone that can stick with you through that, you
and producers?
We tap into a network of around 85 small-scale local
should be fine.
farmers brought together by an app called
Also, don’t be too proud to admit you don’t
Khula, which allows farmers to list their produce
know what you’re doing and to ask questions.
“The concept is centred No-one can do everything. Lean on people.
and tracks real-time inventory levels as well
as basic production forecasting. The app also
There are so many successful business people
around great food,
includes a crowd-sourcing marketplace where
out there who would happily give advice. Buy
but it also saves time
farmers can satisfy market demand and
them a cup of coffee, and they will gladly share
incoming orders.
and money in terms of their wisdom.
They haven’t officially gone live, so we have
gone through the teething process with them
What are your future growth plans for
logistics.”
and are now one of their main wholesale clients.
the business?
Their idea is to link small-scale farmers with the
We’ll first expand further in Gauteng to
likes of Munching Mongoose, hotels and restaurants.
areas such as Benoni and Pretoria and then into
We also source produce directly from organic
other provinces, as we only currently deliver as far
farmers such as Ganico, which is a pomegranate and
as Bedfordview to the east, Centurion to the north,
blueberry farm where we also have our offices and
Parktown to the south, and Krugersdorp to the west.
distribution centre.
Cape Town is an obvious choice, but it’s also
a tricky one, as people there definitely have the
How do you differentiate Munching
right mindset for the service. But there are
farmers’ markets in Cape Town and food delivery
Mongoose from its competition?
The likes of [ingredient delivery service] UCOOK
services for each suburb.
are catering to the same market as us, but it’s
We’ve also had chats with potential investors,
a very different business model. What they are
and some of the people we’ve spoken to could be
offering is pre-portioned ingredients with recipes.
the right partners down the line, but I want to make
Our service essentially allows you to fill your fridge and
sure we expand properly. I’m not looking for a big
pantry with the staples you require and then you can
sell-out in two years’ time. We would potentially look
decide how you cook it.
at both a branch and franchise model, but that would
There are a lot of other online organic stores and a lot
depend on whom we’ve found to get involved. ■
of them are pick-and-choose type stores, so you have
editorial@finweek.co.za
40
finweek 18 January 2018
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Natalie Greve
What are the biggest lessons you’ve learnt?
Images: Supplied
want when you want it, despite the seasonality of
produce. Without coming across as too “hippified”, you
must have an understanding of what kind of effect
eating out-of-season produce has, both in terms of your
own health and nutrition, and environmentally.
Produce that has been picked too early so that it
can travel halfway around the world in cold storage
while ripening, has lost most of its nutrients. For
the environment, and in terms of carbon footprint,
the more you can support local and sustainable
farming, the better it is for everyone. The organic
element obviously comes with the benefits of no
pesticides and chemicals.
on the money motoring
By Glenda Williams
Sure-footed finesse and gravel
gravitas from the new BMW X3
The third-generation X3 builds on the strenghts of its predecessors, but it also adds even more dynamism.
i mprovement over a previous generation
model is crucial if one is to maintain a
winning formula. And while the firstgeneration BMW X3 was somewhat
ho hum, the second generation was not.
The third-generation X3 has managed to
capitalise on the strengths of the previous
generation whilst adding even more
dynamism and finesse.
Six new BMW X3 variants are now on
offer. The flagship M40i and xDrive30i
petrol variants and two diesel variants, the
xDrive30d and xDrive20d, are all available
immediately and equipped with xDrive
intelligent all-wheel drive (AWD) as standard.
The third quarter of 2018 sees two further
petrol variants added to this rugged midsize SUV line-up – the AWD xDrive20i and
sDrive20i, the latter with dynamic rear-wheel
drive. finweek sampled the entry-level diesel
variant, the BMW X3 xDrive20d.
The new X3’s cabin
benefits from the added
length that contributes
to a somewhat roomier
feel compared to the
former model.
Cabin comforts
The ‘X-terior’
Apart from the hexagonal LED fog lights
and “three-dimensional” grille, there are no
eye-popping exterior changes to the new X3.
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The subtle aggressive stance and all-terrain
capability hints also comes from the dual
chrome exhausts and aluminium roof rails.
In true X-family style, the bonnet is long,
the front overhang short and while it’s not
noticeably longer, the wheelbase is stretched
by five centimetres.
But in the first quarter of this year there will
be one major difference associated with the
BMW X3; it will be homemade at BMW South
Africa’s Rosslyn plant in Pretoria.
The BMW X3 M40i’s interior.
The new X3’s cabin benefits from the added
length that contributes to a somewhat
roomier feel compared to the former model.
In characteristic German style, the plush
interior is aligned towards comfort and offers
precision-crafted material combining hi-spec
leather, chrome and optional wood trim,
supremely comfortable leather seats and
modern instrumentation.
It offers a cracking infotainment and
iDrive system, the latter also controlling the
driver assistance systems. Aside from the
iDrive controller, the 6.5-inch colour touch
finweek 18 January 2018
41
on the money motoring
Tim Abbott,
CEO of BMW
South Africa,
at the X3
launch.
screen, voice and hand gestures can also be
used for selection and commands.
Hand gesturing, though, requires a bit of
practice. After watching my driving partner
gesticulate wildly, with some amusement, I
figured I got it right in the BMW 7 Series so
it should be a slam-dunk in the X3.
“Here, let me,” I say, giving my version of
the royal wave. Nothing. Hmm. A two-finger
point and vastly less regal wave guarantee
a modicum of success and my driving
partner’s raised eyebrow finally settles where
it should.
But like kids with too many toys, we soon
lost interest and moved on to other features,
including adjusting the head-up display
(optional feature) to mesh with my elevated
seat height.
One feature added to this new-generation
X3 is the three-zone automatic air
conditioning that now allows passengers in
the rear to select their own temperature. The
rear also features improved legroom.
As far as cargo room goes, there’s bags of
it (excuse the pun). Loading is made easier
with the car’s automatic tailgate operation.
Images: Supplied
Sure-footed ride
What strikes me most about the new BMW
X3 20d is how sure-footed it is. Weight
distribution is bang on, contributing to
precise handling and no perceived body roll
while steering is true and well-weighted and
gear changes fluid.
The X3 is immensely capable on the
tar, hugging the curves at pace, purring
effortlessly on the open road, barely
acknowledging inclines and offering enough
grunt for confident overtaking. Much of this
can be said for its ability on gravel.
Gravel roads are not normally associated
with speed, but the X3’s capabilities inspire
confidence to travel with more fleetness of
foot than one might normally undertake to do.
Still, less is more on the throttle when
tackling twisting, sandy and corrugated
mountain passes. An authoritative stamp on
the accelerator on twisty bits brings out the
back end and flashing traction warnings. The
sophisticated xDrive system mostly allows
for control to be easily regained.
Aside from crossing several sandy
mountain passes, Knysna’s winding gravel
roads dished up a number of challenges,
42
finweek 18 January 2018
Tested:
BMW X3 xDrive20d
Engine: TwinPower Turbo 4-cylinder
1995cc diesel engine
0-100 km/h: 8.0 seconds
Top speed: 213km/h
Power/Torque: 140kW/400Nm
Transmission: 8-speed Automatic
Transmission Steptronic
Fuel consumption (claimed
combined): 5.7 litres/100km
CO2 emissions: 149/km
(13% smaller CO2 footprint compared
to previous generation)
Luggage volume: 550 litres
expandable to 1 600 litres
Ground clearance: 204mm
Safety: Front, side and head airbags
Service/maintenance Plan:
5 yr/100 000km motorplan
Price: R684 200 (including VAT, but
excluding CO2 emissions tax)
including migrating tortoises that appeared
over the crest of a hill. But this allowed the X3
to demonstrate its unflappable capabilities,
the car coming to a decisive and polished halt
from a speed of around 80km/h.
Let’s not forget the ride, which in either of
the three drive modes – eco pro, comfort or
the more dynamic sport – is comfy even on
normally teeth-jarring corrugated sections.
Back on the tar, road noise in the cabin
was absent from the 20d’s 19-inch tyres
(18-inch wheels standard). Not quite the
case with the 21-inch tyres fitted to the
BMW X3 30d (also tested). While its fatter
takkies provided a tad more agility on gravel,
road noise on the tar was perceptible.
The X3 comes with a number of semiautonomous driving assistant features,
among them Active Cruise Control (ACC),
whose capabilities include braking to a halt
in stop-and-go traffic and automatically
pulling away again.
The steering and lane control assistant
form part of the optional Driving Assistant
Plus safety package and work effectively to
ensure you don’t stray from your lane.
But it’s when lane control assistance is
activated while you purposely want to stay
close to the centre line, that things can get
“interesting”. Here corrective interventions
taken by the lane control system proved a
tad more vigorous than was bargained for,
requiring forcible steering to override the
system and prevent the car from moving
back towards the middle of the lane… and a
cyclist riding on the shoulder edge.
It’s a feature best deactivated when taking
a racing line unless you are happy to wrestle
with the steering wheel or indicate each time
you are about to breach road markings.
This capable and versatile premium SUV
is equally at home on tar or gravel, the open
road or in urban traffic. It’s an immensely
pleasurable car to drive with enhanced
sporting prowess, gravel gravitas and
improved comfort.
All said, the X3 xDrive20d exceeds
expectations of an entry-level variant. For that,
and all its other capabilities, it gets the thumbs
up. But if performance is the dominant
requirement then the extremely quick M40i
with its 4.8 seconds sprint capability might be
the machine to tickle your fancy. ■
editorial@finweek.co.za
www.fin24.com/finweek
on the money careers
By Amanda Visser
Feeling stuck in your job?
Here’s what to do.
The year has only just started, but if you are already struggling to muster up the will and enthusiasm
to go to work, it might be time for some honest reflection about your job, and yourself.
Images: Supplied
Gallo Getty Images
s
ure signs that you’ve reached a dead end
Job crafting
in your career are when you start the year
Wessels says that once you feel that your job has no
with low energy levels, a high level of
meaning and that it has passed its sell-by date, the
disengagement and little enthusiasm for
time has come for “job crafting”.
the effort your work might require.
There are three broad themes to consider when
Jopie de Beer, CEO of JvR Consulting
you start job crafting, says Wessels.
■ Relook the job you are in and the way you are
Psychologists, says once people do make the time
doing it. Take note of the number of meetings you
for honest self-reflection, they may be disillusioned
are attending and consider whether you need to
with the career path they have embarked upon or
attend all of them. Ask yourself whether you can
have been on for a decade or two.
delegate more, and whether you have
People often find themselves
that should not be
caught in a cycle where they work
“We all have the drive for power responsibilities
yours to handle. It is important to
hard, get disheartened and then work
even harder, says De Beer. In the
and pleasure, but ultimately these relook the entire task list of the job.
■ Consider your relationships
process they lose their self-knowledge.
things run out of rubber when
at work. A very powerful way of
“You can only find self-knowledge
renewing yourself at work is not just to
if you are a bit selectively selfish. You
you chase power and pleasure
dust off your old relationships, but also
have to find time in your day to reflect
to form new ones. The organigram
on the day. In that reflection you have
for its own sake.”
is not a true reflection of where the
to consider what people told you, what
power lies in an organisation. Take a
you experienced, which mistakes you
new look at the people in your inner circle and how
made and what you could have done differently.”
they empower you.
People might have the best intentions of working
■ Make an attitudinal shift. This is probably the
harder to get different results, but they end up living
most important theme in the process of job
an almost robotic existence.
crafting. You have to reconnect with the reasons
Klasie Wessels, leadership coach at
why you are in your current position, and
Streetschool, says our drive in life is to
consider the difference you are making.
find meaning.
German philosopher Friedrich Nietzsche
“We all have the drive for power and
said that if you have a strong enough
pleasure, but ultimately these things run
“why” to live for, you can bear almost
out of rubber when you chase power
any “how”.
and pleasure for its own sake.”
Wessels says it is important to
He refers to logotherapy,
recognise the things that feed your
developed by Austrian neurologist
energy in the workplace and the
and psychiatrist Viktor Frankl.
things that suck out energy. “It may
According to this principle, unless
be activities or it may be people.
we do what we intuitively know we
Once you know what it is, you will be
should be doing, we will eventually find
able to deal with it more cautiously.”
ourselves in an existential vacuum.
De Beer notes that there may be
“The signs that someone is in that
several reasons why you are feeling stuck
space is displayed through behaviour
in your career, or for doubting whether
such as aggression, impatience, addiction
you have taken the right career path.
and depression. That kind of behaviour
“It could be that you feel you do
is symptomatic of someone who has
not fit into the company anymore,
lost the connection with where
that you cannot align yourself
their lives should be going.”
@finweek
finweek
finweekmagazine
finweek 18 January 2018
43
on the money careers
with the values of the organisation anymore, that
nobody is listening to your opinion any longer, or
that the team leader is insufferable.”
But, she adds, you also have to consider
whether it isn’t a matter of being utterly
exhausted or emotionally drained. It could also
be that you are not following a proper diet or not
getting enough exercise. This can lead to doubt
and feelings of being stuck.
“What you know, you can manage. It doesn’t
mean that you have to change jobs if you cannot
see eye-to-eye with the team leader. Try to find a
different team or a different part of the organisation
where you feel more valuable.”
Jopie de Beer
CEO of JvR Consulting
Psychologists
Difficult, but valuable lessons
De Beer says when something “goes wrong” in
your career it is an opportune time to experience
it as a difficult, but valuable lesson about
yourself, your abilities and possible areas where
you need development.
“In order to learn from this negative
experience you have to be brutally honest
with yourself, and not blame others or the
circumstances,” she says.
Wessels explains that people quite often start to
become numb when they have been in the same
corporate environment for an extended period of
time. “We start compromising too much, we only
follow the rules, we do the same as others do
and we do what others tell us to do. In that
environment we lose our sense of creativity and
our sense of personal authenticity. We stop
behaving like we know we should.”
He says you need to see habits for what
they really are. Once you have this perspective,
it enables you to connect to the wisdom of the
heart, which might tell you that you are not where
you should be.
“We are never free from obligations and
responsibilities, but we are free to choose how we
are going to react. If we know we have choices, we
may consider choices we would never have before,”
says Wessels.
De Beer warns: Never get comfortable in your
career because if you do, there is a risk that you
stop learning. This cannot and must not happen,
she says.
Be more interesting
Klasie Wessels
Leadership coach at
Streetschool
De Beer stresses the importance of bringing
some diversity to the workplace. This is only
possible if you are doing things outside the
workplace that makes you a more complete person,
and more interesting.
“Practise a sport, attend cultural activities such as
How to find the job you need
Once you have realised that you are on the wrong
career path, it is time to become analytical and
strategic instead of becoming despondent or
frustrated, says Lisa Quast, career coach and talent
developer, in a Forbes article.
According to Quast, it is important to research the
job you want, whether it is at the company you are
currently working or outside. This includes finding
out which requirements are needed to get the job and
comparing them to your current skills.
OVERCOME SKILLS GAPS:
Analyse the gaps and list them. Brainstorm all the
possibilities of how you can overcome the skills gaps.
Then it is time for an action plan.
UK career development expert Helen Roberts
writes in an article that most people know what they
do not want. However, they lack a clear understanding
of what would appeal to them.
44
finweek 18 January 2018
“If you are not clear on what you want, how can
you ever expect to achieve it? Take some time out
and work out what it is you want and how you can
create it for yourself in the next chapter of your life,”
she advises.
BE VISIBLE:
Quast writes that people should be spending enough
time working face-to-face with their manager and
co-workers. Do not forget to network informally through
coffee chats and lunch discussions.
You should have at least three plans of where you
are heading, says Roberts. The first one should be the
absolutely ideal scenario for you. The second could be
the stepping stone to get you closer to your ideal. The
third could be another stepping stone. The more options
you have in the current market, the more successful you
will be.
Quast says people should be more than just
www.fin24.com/finweek
on the money quiz & crossword
“We are never free from obligations
and responsibilities, but we are free
to choose how we are going to react.
If we know we have choices, we may
consider choices we would never
have before.”
music performances, poetry readings, art exhibitions.
Create something with your hands and find a spiritual
connection,” says De Beer.
Wessels explains that humans are body, mind
and spirit, or consciousness. The trick, he says, is to
bypass the voices of the mind.
“We are very good at coping, and can continue
coping for a lifetime. But it is possible to reconnect
with a conscious awareness of why we are doing
what we are doing.”
He suggests that you should distance yourself in
order to observe what you are doing and who you
are doing it for. With that analysis you will be able to
realise what you should be doing, he says. ■
editorial@finweek.co.za
Congratulations to Reitumetse Makutoane, who won a book prize
in our recent giveaway. Well done! This week we’ve got a copy of
Nene Molefi’s A Journey of Diversity & Inclusion in South Africa –
Guidelines for Leading Inclusively to give away. For a chance to win,
complete the online version of this quiz, which will be available on
fin24.com/finweek from 15 January.
1 True or false? The ANC celebrated its
121st birthday recently.
6 True or false? The 2018 Winter
Olympics are to be held in Finland.
2 Who recently referred to himself as a “very
stable genius”?
■ Louis C.K.
■ Donald Trump
■ Christo Wiese
7 What colour did most of the attendees
wear at the recent Golden Globes
Awards?
3 Which local mobile network offers the
entertainment service black?
4 Which of these countries is not in Central
America?
■ Costa Rica
■ Guatemala
■ Ecuador
5 Who is the president of the ANC?
8 True or false? Level 8 water
restrictions have been imposed in
Cape Town.
9 Which country recently experienced
anti-government protests?
■ Iran
■ China
■ Belgium
10 Name the senior DA official who has
been engulfed in corruption allegations.
CRYPTIC CROSSWORD
NO 699JD
ACROSS
DOWN
1 Systematic collection of statements from a
gymnast (8)
5 A shoe or the leather it’s made from? (4)
9 I’m back with a letter saying I’m in charge
(5)
10 Boatman off from the start (7)
11 Along with a famous band (4)
12 I would object by nature (8)
13 Slightly touched? (4,1,6,2)
18 Isle of Man coins created equal before the
law (8)
19 Show off one English cooking preference (4)
20 Oblivious to World Body warning (7)
21 Starts to realise how one makes business
figure (5)
22 Pipe won’t open for water carrier (4)
23 Nagging pain in the neck (8)
2 Vegetable designated not satisfactory
for Siberian region (7)
3 Tug sunk, we hear, in the break (7)
4 Run the wrong way? (13)
6 Hotel that is top of the range must be
more elegant (7)
7 Cope with flirt (5,2)
8 Flip over medal, for example (6)
13 The Franco-Italian firm to go on
holiday (7)
14 Identify with writer taking notes (7)
15 A revised order is required for
worshipper (6)
16 Hearing at horseplay (7)
17 Arrange a ransom for one of eight (7)
Lisa Quast
Career coach, business consultant
and organisational trainer
an employee, and could even try to be more like a
consultant. They are hired to assess a current situation
and then create action plans for improvement.
“Act like a consultant and figure out ways you can
add even more value to the company – because this will
also help you get noticed by management.”
SET GOALS:
Roberts remarks that many people never set any goals.
“Get into the habit of setting goals on a daily basis. Set
short-, medium-, and long-term goals.”
Write your goals down and look at them often, be
clear on what it is you are setting out to achieve and why.
She says it is also important to find happiness
outside the workplace by, for example, playing golf,
going to a cooking class or the theatre. ■
Solution to Crossword NO 698JD
ACROSS: 1 Pontificate; 9 Exotica; 10 River; 11 Piece; 12 Ensured; 13 Ablate; 15 Mosaic;
18 Indorse; 20 Sepia; 22 Natal; 23 Hard nut; 24 Tender mercy
DOWN: 2 Ozone; 3 Trident; 4 Framer; 5 Chris; 6 Taverna; 7 Temptations; 8 Tradecrafts;
14 Ladette; 16 Observe; 17 Tether; 19 Riled; 21 Panic
@finweek
finweek
finweekmagazine
finweek 18 January 2018
45
Piker
On margin
New Year’s resolutions you can
actually keep
Read less.
Put on at least 15 kilograms.
Stop exercising. Waste of time.
Watch more TV. I’ve been missing some
good stuff.
Watch more movie remakes.
Procrastinate more.
Drink.
Drink some more.
Spend more time at work.
Stop bringing lunch from home: I
should eat out more.
Take up a new habit: maybe smoking!
Source: http://www.jokes4us.com/holidayjokes/
newyearsjokes.html
Down at the gym
How many bodybuilders does it take to
screw in a light bulb?
Four. One bodybuilder to screw in the
bulb, and three others to watch and
say: “Really, dude, you look huge!”
If you think you aren’t creative…
Buy a gym membership and see how
many excuses you find not to use it.
Today is my first day at the gym…
I walk in and see a bunch of hot women
working out, so I walk up to the guy
who is running the gym and ask him:
“Sir, what machine should I use to
impress the ladies over there?”
Verbatim
He smiles at me and says: “Try the
ATM in the lobby.”
About two minutes into my workout,
I decided to work on my personality
instead.
The only exercise I’ve done this month
is running out of money.
I often stare at a prominent sign on
the wall at my gym that declares
“NOTHING IS IMPOSSIBLE”. And
every time I think: “Whoever wrote
that never tried to cancel their
membership.”
One of the benefits of eating
healthier is that you never have to ask
questions like: “All right, who ate my
raw broccoli florets?”
All the gym bunnies moaning about
the newbies. Get over yourselves. You
didn’t see us moaning when you came
to use our pubs in December.
The gym is like church to some people.
No matter what they do all week, they
think they can erase it with one visit.
Just burned 2 000 calories. That’s the
last time I leave brownies in the oven
while I nap.
Source: www.thejokecafe.com
Michael Jordaan @MichaelJordaan
Those solar farms that cannot get Eskom to
sign their contracts would do better by using
their power to mine bitcoin. It’s only a matter
of time until they realise.
SEC Fort Worth @FortWorthSEC
We’re contemplating adding “Blockchain” to
our name so we’ll increase our followers by
70 000 percent.
Ranjeni Munusamy @RanjeniM
What is this poison that only Russia has the
antidote for? And how come it only has the
treatment but it’s not the source?
Yiddish Proverbs @YiddishProverbs
Flattery makes friends and truth makes
enemies. – Yiddish proverb
VeryBritishProblems @SoVeryBritish
“Oh I’d love to, but...” – Translation: I’d rather
eat a handful of sand.
Drew “No Nazis” 4484 @Drew4484
Myers-Briggs is just astrology for people who
went to business school.
Girl On Tapas @girlontapas
There is no key to a woman’s heart.
There’s only a password that changes
regularly.
Abby Heugel @AbbyHasIssues
It turns out the answer to my problems
wasn’t at the bottom of this pint of ice
cream, but the important thing is that I tried.
“The secret to change is to
focus all your energy not
on fighting the old, but on
building the new.”
– Socrates, Greek philosopher
(c. 470BC- 399BC)
46
finweek 18 January 2018
www.fin24.com/finweek
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