Interesting Articles

Over the first half of the month, stocks were buoyed by upbeat US economic figures and easing concerns over Europe’s debt crisis as Greece received its second bailout. However, by mid-month the rally flagged amid concerns over China’s economic growth, Spain following in Greece’s footsteps and the impact of high oil prices on global growth. Read more

Most large consumer-facing companies realize that they will need China to power their growth in the next decade. But to keep pace, these companies will also need to understand the economic, societal, and demographic changes shaping the profiles of consumers and the way they spend. This is no easy task not only because of the fast pace of growth and subsequent changes in the Chinese way of life but also because of the vast economic and demographic differences across the country. Read more

If you’re like most investors, you began your investment program with the intent of achieving any number of goals, some long-term, others shorter-term—such as enjoying a comfortable retirement, sending your children to college, buying a second home or supporting your current lifestyle. You have invested in stocks and bonds to steadily build and preserve wealth over decades. Your long-term strategy did not include trying to jump in and out of themarket based on its short-term performance.  Besides, brief, explosive spurts of volatility, both positive and negative, is the norm. Despite periods of stomach-churning market activity—stocks ended 2007 with a decent return.But an impulsive investor who abandoned the market during one or more of its sharp downturns would have missed the strong, ensuing rebounds. Read more

The upward momentum of January continued into February  as the global economic data surprised on the upside and the probability of Greece defaulting was largely discounted by the markets.  Signs of an improvement in the US, UK and German manufacturing and services sectors in January provided a welcomed boost to sentiment.  Manufacturing PMIs in the UK and Germany rose above the 50 level, a benchmark signalling expansion.  However, French, Spanish, Italian, Greek and Irish manufacturing activity contracted once again. Read more

During the past quarter century, Vietnam has emerged as one of Asia’s great success stories. In a nation once ravaged by war, the economy has posted annual per capita growth of 5.3 percent since 1986—faster than any other Asian economy apart from China. Vietnam has benefited from a program of internal restructuring, a transition from the agricultural base toward manufacturing and services, and a demographic dividend powered by a youthful population. The country has also prospered since joining the World Trade Organization, in 2007, normalizing trade relations with the United States and ensuring that the economy is consistently ranked as one of Asia’s most attractive destinations for foreign investors. Read more

The Minister of Finance, Mr Pravin Gordhan, today announced that his department had provided an amount of R9.5 billion in personal income tax relief to individuals, mostly to taxpayers in the lower income brackets. Read more

The 2011/12 Budget brought some surprises, both in what it mentioned and in what it omitted. As expected the focus was largely on the economy, job creation and infrastructure spend. There was no clarity on retirement fund reform, while the national health insurance is to be phased in over 14 years. On a negative note further re-distributive measures include a hike in capital gains tax and a 50% increase in the tax on dividends. Although hailed as a balanced budget, its success will largely depend on the government’s ability to keep costs, such as public service wage increases which have been assumed at a 5% level in the Budget, and borrowing down. Read more

The year started on an unexpectedly upbeat note as the US economic data painted a picture of steady recovery. From stronger retail sales and manufacturing figures, to rising consumer confidence, the US is looking healthier.  Elsewhere, however, manufacturing activity was subdued with the euro zone’s industrial sector suffering its fifth straight month of declines in December and Asian factories mostly stuck in a rut.  Only China and India surprised on the upside. Read more

A few years ago an acquaintance, Neville, bragged about how clever he was. He said that he had taken early retirement, cashed in his pension and invested it in a wonderful scheme which was, and would continue to make him extremely rich. He demonstrated how every month, without fail, he was earning 15% on his capital investment of R400 000, guaranteed. He knew it was legitimate as he had invested R10 000 earlier and received his interest payments regularly and on time. Rather than cash in on his investment, he said he had increased it. I advised caution. In fact, I urged him to get out of the scheme immediately. I told him about Ponzi schemes and explained that most investors will lose their capital, guaranteed.  He knew better. He said nobody would dare to steal from him and if they tried they would learn the error of their ways quickly. He would also drive there with his bakkie and load up all their computers and furniture. He talked a big game.  Whenever I saw Neville in the following months he maintained the smug attitude about me being wrong and him being right. “I told you so”, he said many times.  I persisted in my warnings, to no avail. The next time I saw Neville he was much quieter. He let it slip that the investment company had missed a payment or two, but said that he was confident that it was no problem.  Soon after that the rumours started. The main principal of the investment scheme was no longer available telephonically and was hardly ever at the office. The staff had been retrenched.  Neville panicked and in desperation asked my help. It was too late, the money was gone.  Neville is working again and will have to continue to work for many years.   Read more

Africa’s economic pulse has quickened, infusing the continent with a new commercial vibrancy.  Real GDP rose by 4.9 percent a year from 2000 through 2008, more than twice its pace in the 1980s and ’90s. Telecommunications, banking, and retailing are flourishing. Construction is booming.  Private-investment inflows are surging.  To be sure, many of Africa’s 50-plus individual economies face serious challenges, including poverty, disease, and high infant mortality. Yet Africa’s collective GDP, at $1.6 trillion in 2008, is now roughly equal to Brazil’s or Russia’s, and the continent is among the world’s most rapidly growing economic regions. This acceleration is a sign of hard-earned progress and promise. Read more