Assets & Investments

Is value determined by skilled negotiators or is it an accurate and well-founded calculation performed by a skilled valuator?

The world is facing one of its gravest crises in recent memory as it stares down COVID-19 and the wealth management industry has a key role to play by steadying the investment ship and navigating investors’ safely through this storm.

President Cyril Ramaphosa presented the five-level, risk-adjusted strategy that will guide South Africa’s emergence from lockdown. As the finer points of the strategy were shared, it became clearer how - and when - certain sectors will once again gear up into activity.

The case for economic recovery out of the deep COVID-19 recession has been given a confidence boost by the Government’s decisive response to the crisis. The praise being showered on President Cyril Ramaphosa’s steps taken to unlock the economy and the economic stimulus packages to address the impact of the COVID-19 pandemic should give the country confidence that we are moving in the right direction.

A loan from the IMF could instil investor confidence – with or without conditions. The previous announcement by the Minister of Finance Tito Mboweni that the South African Government is considering approaching the International Monetary Fund (IMF) for financial assistance amid the COVID-19 pandemic has drawn quite a bit of criticism.

Three months ago, investors were looking forward to an improved year of global growth and corporate earnings. That was then. The coronavirus crisis is an era-defining event; one which will have a significant impact on not only how we live, but also where we invest.

As the coronavirus sweeps its way around the globe, the trends established in most countries in terms of taming its spread after lockdown appears similar to that set in China. While it might take somewhat longer for some of those countries that started their control measures later, the outlook seems positive and the trend is definitely moving in the right direction.

If there is one thing that the national lockdown has highlighted, it is the need for South African law to recognise electronic signatures to authenticate important legal documents such as Last Wills and Testaments.

South African investors are still absorbing the twin blows of being downgraded by Moody’s into junk territory and, just four days later, the expected Fitch decision to take the South African sovereign debt rating down a further notch into junk territory.

Budding entrepreneurs are seldom short on innovative ideas; the biggest challenge is usually to attract funding to enhance execution capabilities, which is where venture capital (VC) companies come in. A form of private equity financing, these VC firms fill the gap that many traditional financiers have been unable or unwilling to fund.