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Although the 2020 Medium Term Budget Policy Statement stated its intention to prioritise economic recovery and fiscal consolidation in order to support President Ramaphosa’s economic recovery plan, the reality is that while this budget hit some of the right notes, it did little to instil confidence that the country is on the path to economic recovery.
An interview with Stephen Katzenellenbogen, Senior Executive, Private Wealth Manager, NFB Private Wealth Management, and Dr Ivor Blumenthal, CEO, ArkKonsult, discussing an article penned by Andrew Duvenage, Managing Director, NFB Private Wealth Management, apropos the ANC’s Economic Transformation Committee proposal outlining changes to Regulation 28 of the Pension Funds Act.
On Tuesday Stats SA announced that SA’s GDP had contracted 51% between April and June (using annualised quarter on quarter numbers – in other words, this is a 17% decrease for the quarter) as a result of the lockdown imposed in response to Covid-19. The contraction was shocking – but not unexpected. Given that government took the decision to implement one of the harshest and longest lockdowns globally, the severity of the economic contraction should not come as a surprise.
Earlier this year, the ANC’s Economic Transformation Committee published a proposal outlining changes to Regulation 28 of the Pension Funds Act. Regulation 28, which controls the extent to which retirement funds may invest in particular asset classes.
Recent weeks have seen the local market hit by a triple whammy. Both local and global markets have crashed as the economic impact of the COVID-19 pandemic begins to be felt resulting in a market sell-off; a rapid decline in oil prices has created a global supply shock. In addition to that, ratings agency Moody’s downgraded South Africa’s credit rating to junk or sub-investment grade.
The investment landscape has changed profoundly over the past decade, making it easier than ever for individuals to take control of their own investment portfolios. It’s a simple matter for nearly anyone to trade shares via their online banking platform, for example, or to access a range of funds and products from an online stockbroker or wealth management firm.