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CHAIRMAN’S
STATEMENT
OPERATING ENVIRONMENT
The year 2018 started off positively following the
significant December 2017 shift in South Africa’s
political leadership, resulting in the inauguration of
President Cyril Ramaphosa in February 2018. As a
consequence, and on the back of improving consumer
confidence and a strengthening Rand, the South African
Reserve Bank modestly increased its growth forecast
for South Africa from 1.2% to 1.4% for 2018.
However, this optimism dissipated by mid-year, as
local and global macro conditions weakened due to
falling public confidence in most countries. Domestic
unemployment continued to persist as many sectors
battled the tough economic climate. The agricultural
sector plunged in the second quarter and South Africa
entered its first technical recession since 2009.
Subsequently, the growth forecast for 2018 was revised
down to 0.7% due to two successive weak quarters,
and confidence indices lost ground.
The JSE All Share Index recorded its worst year in a
decade with an 11% loss, driven mainly by Naspers which
lost 16% of its market value for the year, the worst yearly
performance by Africa’s largest company by market
capitalisation since 2001. Significant declines in other
large cap industrials also contributed to making 2018 an
overall disappointing year for investment markets.
Nevertheless, I am pleased to report that PPS weathered
the year better than many competitors. Owing to the
principle of mutuality, our members continued profiting
from the unique profit-share benefit that only PPS
offers in South Africa.
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