Emigration a red flag for SA economy
Izak Smit, Chief Executive Officer of the Professional Provident Society (PPS), a mutual financial services provider that offers insurance and investment products to graduate professionals, red-flagged the exodus of South Africa’s most skilled workers, who not only provide tax revenues but support jobs across the economy. Speaking to Business Day after a virtual discussion at the Economic Society of South Africa’s annual conference, Smit said that typically between 20% and 25% of professionals exiting PPS’s insurance business and the professional medical scheme Profmed – which PPS administers – cite emigration as their reason for doing so.
Suggestions when to replace a unit trust manager
We replace unit trust managers when we no longer think they are better than average. In our view, above-average specialist managers outperform their market benchmarks, while above-average multi-asset managers need to outperform their peers. Managers may become mediocre for various reasons, and our investment process focuses on the internal rating of three qualitative pillars rather than short-term (under)performance, writes Chief Investment Officer of PPS Investments David Crosoer and Chairperson of PPS Multi-Managers Prieur du Plessis.
Lesetja Kganyago warns government against making large spending commitments
South African Reserve Bank Governor Lesetja Kganyago has warned the government against making large spending commitments on the back of buoyant revenues due to higher commodity prices. Reportedly Kganyago said the government should make wise spending decisions and not be tempted by the sudden revenue boost as commodity prices would not stay elevated forever. South African firms – especially in the mining sector – have made serious gains this year from the strong activity and high commodity prices, boosting government revenue as tax collection rises.
Corporates sit on cash in face of uncertainty, says Kganyago
For as long as South Africa battles sustained policy uncertainty, companies will sit on large piles of cash and refrain from investing, says South African Reserve Bank Governor Lesetja Kganyago. Kganyago flagged the large cash deposits corporate South Africa has accumulated in an environment where business confidence has been low and policy uncertainty remains elevated – problems that have been amplified by the COVID-19 shock. Business Day reports that bank data show that South Africa’s non-financial corporates are sitting on about R1 trillion in cash, even as the country battles to revive fixed investment which fell to 13.7% of the gross domestic product in 2020, its lowest level since the mid-1990s.
A $290 billion funding shortfall is slowing Africa's revival
Sub-Saharan Africa needs significant additional funding to counter damage wrought by the coronavirus pandemic, bolster its economic recovery prospects and mitigate threats posed by climate change, according to the World Bank. The regional economy is expected to grow 3.3% in 2021, after contracting by an estimated 2% last year, the Washington-based lender said in its latest Africa Pulse report. It raised its gross domestic product forecast by one percentage point from its April report, largely due to better-than-expected commodity prices.
https://www.pps.co.za/newsletters/news-oct-2021