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The Government of National Unity (GNU) was formed between the African National Congress (ANC) and nine other political parties. The GNU governance structure was established after the 27 May 2024 national and provincial elections during which no political party obtained a 50% plus vote. In his inauguration address on 19 June 2024, President Ramaphosa describe the GNU as the beginning of a new era in South African politics. The previous GNU was formed in 1994 and dissolved in 1999. The aim of the previous GNU was to govern through consensus seeking and not governed by the winner take all approach. The vision of this GNU is to set South Africa on a path towards social cohesion and nation-building. This political shift has fostered optimism around the country’s economic future. The collective effort from politicians to participate in GNU was welcomed by business and the relationship between the private sector and government has been improved. A positive vibe was created on the local financial markets and the South African Rand broke R18 to the US Dollar. The performance of the local asset classes from 1 June 2024 to 30 September 2024 were: The JSE All Share Index rose with 12.83% SA All Bond Index increased with 16.29%. Listed Property Index Tracker Funds increased 25.77% Money market rates saw a 0.25% decline. The GNU was not the only factor that influenced the prices of asset classes and other economic indicators, like interest rates, also played a role. It is however the positive economic sentiment that GNU has created through the collective decision-making process from different political parties that played a positive role in the minds of investors. The way forward? In the short term we could expect that investment portfolios will perform above average depending on that the economy performed well, and that earnings of listed companies increases. What is the lifespan of this GNU? The previous political collective decision-making structure survived for 5 years. In the nineties South Africa had a dominant political party in Parlement as well as a better performing economy. However, this time is different, and a performing economy with prosper financial markets could create a scenario that it is better for political parties to be part of GNU than to be left out. Dr AP Botha 21 October 2024

Liquidity Risk in your Investment Portfolio  There is nothing worse than being in a pickle and you have no emergency funds. This is when people get into unnecessary debt with high-interest unsecured debt via credit cards and personal loans. To avoid this, you must plan your investment portfolio around long-term growth as well as liquidity needs. Setting financial goals in the financial planning process is an effective tool in providing a practical framework. But it also gives wealth managers possible investment horizons and importantly, the liquidity needs of a client. There is a tightrope to walk between providing liquidity and enjoying long-term growth and your age and specific needs will determine how far you lean towards each side. Here are some of the liquidity risks that you may face in your investment portfolio: Product Rules: Certain structures allow partial access to funds, and some offer no access to funds within a certain term. Examples: Compulsory investment products like pre- and post-retirement structures. Discretionary investment products like endowments, sinking funds and structured products. Asset Allocation: With short-term volatility in growth assets like equities you may run the risk of selling during a downturn, locking in losses. It’s important to rather consider the use of conservative interest-bearing assets when planning for short-term or emergency liquidity needs. Demand: All assets are not desirable by investors. An example can include private equity shares that may not be well known or desired. This will make it difficult to sell when funds are needed because there might not be a willing buyer. Availability: In certain instances, investor funds are pooled together in order to buy a large underlying asset. Some of these assets can have a maturity date attached leaving no room for buy-backs before maturity. How can you assess the need with asset allocation in mind? High liquidity – Conservative allocation – Low volatility Low liquidity – Aggressive allocation – High volatility *This is not financial advice. Ruvan J Grobler RFP™ (PGDip Financial Planning)

The Impact of Interest Rates Cuts on your Investments Interest rate cuts have been on our lips since the middle of 2023, but global inflation has been extremely sticky in the current cycle. Now once again it seems that markets are pricing in cuts from September on. These predicted cuts are largely dependant on what inflation does. SA inflation recently cooled down to 5.1% from 5.2% year on year and the overall economy looks to be slowing down. Many are sceptical of the influence that monetary policy has on South Africa. We need intervention that support economic growth, regardless of your opinion on monetary policy. An interest rate cut should promote activity in our economy as capital will once again start moving around searching for opportunities due to lower interest rates. Bonds have an inverse relationship with interest rates while cash has a direct relationship. Listed companies will benefit from lower payments on their own debts while consumer spending picks up. This is positive for shareholders as balance sheets improve and shares become attractive. Especially at this time where valuations show great upside for SA equities. Interest rate cycles often coincide with the economic cycle. Knowing where we are in the economic cycle is essential in identifying opportunities, it gives us a framework on risk and volatility. Just like countless times before, we have made it to the light at the end of the tunnel. “History Doesn't Repeat Itself, but It Often Rhymes” – Mark Twain

Die nuut gestigte Regering van Nasionale Eenheid (RNE) het ’n tydperk van samewerking tussen verskillende politieke partye ingelui. Hierdie samewerking behels dat die betrokke politici deur middel van ’n ooreenkoms gesamentlike verantwoordelikheid neem vir die regering. Hoe raak hierdie verwikkeling jou beleggingsportefeulje? Voor die verkiesing het die destydse ANC regering met inisiatiewe begin om die privatesektor te betrek by ekonomiese ontwikkeling, soos onder andere die verbetering van die elektrise netwerk om sodoende beurtkrag te beëindig. Hierdie inisiatief het die beleggersgemeenskap plaaslik sowel as internasionaal geintriseer vir moontlike toekomstige beleggings. Die vraag was of die nuut verkose regering sou voortgaan om die privaatsektor by ontwikkelingsprojekte te betrek? Die aanvaarding van die RNE as regeringsvorm en die deelname van verskillende politieke partye waaronder die Demokratiese Alliansie (DA) vergroot die moontlikheid dat die privaatsektor betrokke sal bly by ontwikkelingsprojekte. Dit sal daartoe lei dat die Suid-Afrikaanse ekonomie teen ’n hoër ekonomiese groeikoers sal ontwikkel. Hierdie nuus het daartoe gelei dat die JSE-indeks byvoorbeeld op 19 Junie met 3,5% gestyg het, asook dat die Rand se waarde heelwat versterk het sedert die verkiesingsuitslae bekend gemaak is. Die pryse van effekte (bonds) het ook begin verbeter namate die sentiment vir ekonomiese groei verbeter het. Indien daar voortgegaan word om die privaatsektor by regeringsprojekte te betrek, sal die positiewe marksentiment voortduur. Bykomend tot die huidige positiewe politieke nuus oor die ekonomiese groeisentiment in Suid-Afrika, is die moontlikheid dat rentekoerse binne maande kan verlaag. Verlagende rentekoerse sal ook bydra dat pryse van effekte (bonds) en aandele plaaslik sal verhoog.  Riaan Botha

Buy-and-sell agreements. Protecting your business interests. If you’re running a business with partners, having a buy-and-sell agreement in place is crucial. But why, you may ask? The answer is pretty straightforward. Here’s the deal: When you pass away, your shares in the company become part of your estate or transfer to your business partner as per your shareholder’s agreement. If there’s no clear plan in place, those shares end up in your estate, to be distributed according to your will. Enter the buy-and-sell agreement – your solution to these issues. This agreement is backed by life insurance policies on each partner’s life, ensuring enough cash to cover the purchase price. Simultaneously, the agreement establishes the obligation to sell the deceased partner’s shares and the obligation for the surviving partner to buy them. Now, let’s talk about the risks: Insufficient cash: The remaining owners might not have enough cash to buy the deceased partner’s business interests. Uncertain fair price: Heirs might not be guaranteed a fair price for the business interests, potentially leading to a forced sale. Ownership complications: The remaining owners might face unclear ownership, dealing with heirs or delays in estate settlement. Business capital drain: Funding the purchase could drain the business’s capital, jeopardizing its continuity. On the flip side, the benefits are significant: Business continuity: The business keeps going without outside interference. Smooth transition: Funds are available for a timely conclusion of the transaction. For dependents or beneficiaries, the advantages are: Inherited capital: They receive a capital amount instead of dealing with a business they may not know. Financial security: The received capital can replace lost income and contribute to overall estate planning. Now, let’s consider the importance of a shareholder’s agreement: This agreement, entered into during the partners’ lifetimes, governs their relationship and outlines what happens to shares in the event of death or retirement. Without it, shares become part of the deceased partner’s estate. And remember, getting the structure right is essential to qualifying for estate duty exemption. The Estate Duty Act provides exemptions if specific conditions are met. In conclusion, a buy-and-sell agreement is vital for protecting interests and ensuring the intended transaction occurs. Without it, disputes can end in costly and time-consuming court battles, benefiting no one, especially not the deceased owner’s beneficiaries.

Agtergrond Die toekoms is onbekend en daarom bestee internasionale beleggingshuise groot bedrae geld om te voorspel wat in die toekoms op beleggingsmarkte gaan gebeur – sonder veel sukses. Om persoonlike welvaart in ‘n onseker wêreld te skep verg ‘n plan asook persoonlike dissipline. Die volgende persoonlike plan word voorgestel:

Investment fees should not be difficult to understand and must at all times be transparent. Many years ago, this was not the case but in recent years the industry has standardized the terms and set out clear limits.