Extreme uncertainty for investors
JOBURG - A talk by Sanlam on 19 April in Sandton, highlighted the uncertainty in investment in South Africa. However, the message was largely an optimistic one.
The message that was repeated at a talk on uncertainty in investment by speaker Daniel Kriel of Sanlam Private Wealth was that there are positive stories to be told.
Director of Investments at Sanlam, Alwyn van der Merwe added, “There is a high probability of a positive return.”
Kriel explained that the world is changing and referred to the ‘soap opera’ American elections, the refugee crisis and terrorism. He went on to say that these macroeconomic factors are what make the market so volatile.
“Local investor confidence has been shaken and this has little to do with global events,” explained Kriel. He then said that events in South Africa have been a cause for concern for many South African investors and this is why so many local investors have chosen to invest abroad.
Some of the issues on South African shores that have frightened investors off, according to Kriel, are drought, food and inflation.
Kriel took a very unconventional approach to the decision of President Jacob Zuma to replace the Minister of Finance, Nhlanhla Nene on 9 December last year.
Instead of highlighting the catastrophic economic effects of this decision, he highlighted the positives. He stressed that this decision made businesses stand up and unite with the government. He said, “We have seen an unprecedented co-operation between business and government.”
He went on to say that the Constitutional Court’s ruling that some of President Zuma actions were unconstitutional, made all South Africans realise that no individual is above the law.
The last point made with regards to the 9 December debacle was, “In all of my working years, I have never seen institutions stand up and say that they will not provide certain people with services until now and I see that as a positive.”
Van der Merwe, referred to 9 December as ‘the last straw that broke the camel’s back’. He went on to say that although the economic climate has created uncertainty for investors, South Africans have to deal with the matter logically.
Van der Merwe said that the solution to a lot of the problems lies in service delivery such as water, electricity and education. He also highlighted that government needs to co-operate in order for there to be a positive economic change.
