A strong sense of optimism characterises most of our top 5 posts on Sharenet in February. With the stepping down of Jacob Zuma and the swearing-in of new ANC - and now also SA - President Cyril Ramaphosa, we’re feeling as if the future of our country may not only be salvageable, but bright.
The recent budget speech provided support to some of President Ramaphosa’s rhetoric, and seemed to find approval with Moody’s and S&P credit ratings agencies. Dwaine van Vuuren provides a neat summary of the main points of the speech in his article below. Next up is Dwaine’s article on the postponing of Day Zero in Cape Town, where he notes that we need dam levels at least 38% full by 21 October 2018 or else we face a certain unavoidable Day Zero scenario or complete shutdown of the agricultural sector in 2019.
Then, Joani van Wyk writes about how to take advantage of the rand in this climate of optimism, by using regression analysis and a market-equilibrium formula to determine the fair value of the rand and make a call on its direction. Stephan Maritz’s article featuring his top 5 stock picks for 2018 once again features in our most popular posts list, and we complete our top 5 with my article on our new President, Cyril Ramaphosa, an accomplished and interesting individual who now bears the weight of South Africa’s hopes and dreams.
Summary: The salient points we took from the 2018 budget speech.
Key quote: "This coming fiscal year alone, government has allocated over R200 billion for peace and security and another R200 billion for economic development to build a safer country and to grow our economy inclusively. The largest reallocation of resources towards government’s priorities was on higher education and training, amounting to additional funding of R57 billion over the medium term."
Summary: Day Zero in 2018 has almost certainly been avoided. But that’s the least of our worries...
Key quote: "With weather forecasting being so unpredictable now, we have to assume at the very least that rainfall in 2018 will be the same as 2017. If it’s better, then well and good but if it’s worse, we are in real big trouble."
Summary: How to position your portfolio amidst SA’s current economic and political optimism.
Key quote: “The return of a share is still directly linked to the company’s performance (or markets’ perception thereof), but you can get a currency kicker depending on where they earn their revenues, and if you are lucky to call the rand direction correctly."
Summary: Stephan Maritz’s choice of five shares expected to outperform this year.
Key quote: "What I looked for is a combination of shares that are trading at a significant discount to their NAV (or target price) or that I believe will outperform their sector peers, and are in sectors that I believe will perform well in 2018."
Summary: Find out more about the veteran businessman, politician and activist - and SA’s new president.
Key quote: "Cyril has extensive experience in the private sector and is known for supporting business-friendly policies, which is partly why the economic outlook for South Africa, business confidence, and even the rand have all been improving since the December election. He is one of SA’s richest men and has an estimated net worth of over $450 million, according to Forbes.com, and owns 31 properties."
Natalie Mayer is an independent writer and editor with 12 years’ experience. She has a B.Com in Economics (UCT) and a Master’s in Sustainable Development (University of Stellenbosch) and has worked for a number of high-profile clients, such as the United Nations Educational, Scientific and Cultural Organization (UNESCO), Nedbank, the Sustainability Institute, Counterpoint Asset Management, Pearson Education, and of course, Sharenet - to name a few. Natalie has written and edited research papers, textbooks, print and online articles, and website content on a vast array of topics, including finance and money matters, education, property, social and environmental issues. She is passionate about communication that meets the needs of the audience, and her particular strength is to bring clarity to text.