Wealth Advisory Newsletter

Scope for optimism on SA’s energy future

Renewable energy is gaining momentum worldwide and South Africa is no exception. As the country seeks to reduce its dependence on fossil fuels and transition to cleaner, more sustainable energy sources, investment and financing in the renewable energy space have become increasingly important, reports Business Day.

This shift towards renewables has created a growing demand for capital to fund projects and infrastructure, presenting opportunities for investors looking to capitalise in the rapidly expanding market. 

Gold Fields on a roll

Two new joint ventures under its belt and a record gold price mean Gold Fields is flying high again after a wretched 2022.

In the words of singer Taylor Swift, Gold Fields “shook it off”. Five months after the resignation of CEO Chris Griffith, the gold miner’s share price is at a record high. Stand-in CEO, Martin Preece, told the Financial Mail that the dollar gold price is driving the stock, “but we hope the market is giving us a bit of credit as well” — a reference to two deals the company announced this year, he stated.

Last year was a nightmare for Gold Fields. On 31 May 2022, it bid $6.7 billion (R129.839 billion) in shares for Yamana Gold, a Canadian gold producer, only to be outbid by a joint offer from rival gold producers. Since then, it has had joint ventures of its own in Ghana and Canada that have propelled the firm to a comeback and could boost Preece’s chances of permanent tenure, reports Financial Mail

How much money is needed to be in South Africa’s richest 1%

Knight Frank’s Wealth Sizing Model revealed how much money individuals need to be among the top 1% of earners across 25 countries – including South Africa, reports Business Tech.

The “Top 1%” became a notable term during the global financial crisis, but the wealth needed to join their ranks varies considerably from country to country, says the report.

The sharp variation in these countries’ requirements to be among their top 1% underscores how the pandemic and surging living costs widened the gap between rich and poor nations.

For example, Monaco’s entry point – the wealthiest nation in the comparison – of $12.4 million (R237.6 million) is over 600 times more than Kenya’s entry point of only $20 000 (R383 000).

Monaco’s entry point is also 200 times more than the $57 000 (R1.09 million) needed to join the top 1% in the Philippines.

South Africa is among the poorer nations in the comparison, after the Philippines. The report showed you need a net wealth of $109 000 (R2.08 million) to join the top 1% of the wealthiest South Africans.

What SA’s top asset managers would do with R5m

Is it time to externalise your savings if you have not done so already or is it too late to panic? Financial Mail asked three top portfolio managers what they would do with R5 million now.

One portfolio manager said, “Externalise now”. A family with R5 million to invest should move it all offshore at once. “When you have done that, invest the money in a balanced portfolio of US-listed blue-chip stocks,” is his advice.

The portfolio managers believe it is not enough to tell your current service provider to select offshore options inside a rand-based wrapper, annuity or unit trust portfolio. Their advice is that you have to get your savings outside the exchange control net into US dollars, reports Financial Mail

Here’s why buying vacant land may be better than buying a home

Investing in vacant land with the intention of building is one of the less common paths to home ownership in South Africa. However, for those with plenty of patience and very specific ideas for their dream property, building from scratch can offer significant benefits, says David Jacobs, regional sales manager for the Rawson Property Group, reports Business Report.

The most obvious benefit of buying vacant land, as opposed to a pre-developed property, is that the purchase price will be much lower. “That generally means pretty significant savings on both transfer duty and municipal rates, which are based on the purchase price and property value, respectively,” added Jacobs.

Unfortunately, a lower purchase price does not necessarily mean easier finance. In fact, most lenders will only finance up to around 60% of a vacant property’s purchase price, he says.

Shareholder panic wipes R2.5bn off the value of Telkom

Telkom will pencil in lower earnings and write down the value of its assets, failing to keep pace with the market and technological developments. It is fighting problems on many fronts: intense Eskom blackouts, fierce competition and cash-strapped consumers.

As much as R2.5 billion was wiped off the value of Telkom on the Johannesburg Stock Exchange after the telecommunications company informed shareholders that a massive storm would soon hit its operations, reports Daily Maverick.

Telkom’s shares plunged and finished 15.6% lower on 17 May after it warned shareholders that it would pencil in a decline of at least 85% in its profits for the year ending March 2023.