ConCourt Ruling a Win for Investor Confidence
The highest court in the land asserted its independence in no uncertain terms when it ruled against President Jacob Zuma and the National Assembly on the Nkandla matter. This will encourage foreign investors, whose confidence in the independence of South Africa’s institutions was shaken after former finance minister Nhlanhla Nene’s removal in December, writes Hanna Ziadi for Moneyweb. Click on the link to read the article “Concourt ruling a win for investor confidence”
Update on Tax and Investments
This is an update from an earlier post Tax and Investments posted on the 11th July, 2014.
The changes, as per the 2016/17 budget are:
Capital Gains is now an effective 16.4% if you are at the maximum rate of tax. Individuals are now allowed an annual exclusion of R40 000.
Source: SARS Tax Guide
FTSE/JSE All Share Performance Chart
What goes down must go up….and down and up again. Much has been said about the volatility on world markets, and the accompanying graph shows the JSE is no exception. Over the past year the bulls and the bears battled it out on an almost monthly basis as the bourse was buffeted by both domestic and international factors. The good news is that, as shown by the performance table charting the last five years, medium to long term investors have scored handsomely. From the high of a return of 26.68 in 2012, to the low of a return of 5.13 last year, the JSE continues to show that shares must be part of your investment portfolio.
Can the Rand Recover?
Experience has taught us that the direction of the rand, how far, or when it will fall or rise against hard currencies such as the USD is notoriously difficult to predict. The last time the rand’s tumble was this dramatic was in 2001 when it collapsed from R7.60 to the USD to R13.84. Recently the rand’s fall has been more dramatic. There are differing views as to where the rand will go to from here. One is that we are in a period of sustained weakness for a while. Reasoning for this view is as follows:
Happy Holidays
It has been an interesting year on the financial front, what with South Africa having three finance ministers in one week, downgrading by credit agencies, and the volatility which we have become used to on the JSE. But your investments have held up in spite of a challenging 2015, and we look forward to continuing to grow them in 2016. All the very best for the festive season from Castle Investments.
SA Risks Junk Status
On Friday, 4 December, Fitch Ratings and Standard & Poor’s cut SA’s credit rating from stable to negative (BBB-), bringing the country closer to a junk rating.
A reason for the downgrade included:
- Weakening Growth domestic product (GDP) growth performance and estimates of it weakening further.
South Africa’s economy narrowly avoided a recession in the third quarter of 2015 with an annualised growth of 0.7% because of electricity shortages, low global demand and falling commodity prices.
Some economists now believe that the risk of a junk rating is not impossible.
Source: Bloomberg