APRIL / MAY 2018
PROFICIO NFB FINANCIAL UPDATE FROM THE CEO’s DESK
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n my previous editorial, I suggested the naysayers should pause and watch Cyril R take bold steps in changing the political and SOE landscape, opining that he did not have to get support from an apparently dysfunctional and 'hung' executive. I was spot on! What I didn't get right was the speed with which wholesale hiring and firing would happen in the Cabinet. The mega shuffle came remarkably quickly and whilst needing to consider ANC politics for the 2019 election, certainly made politicians, thieves and South Africa take note. Further afield, we saw a very positive take by global money managers and media. I have said this before and will probably have to say it again but, my, how we like to bring things back from the brink! We aren't out of jail, however, and still need to see the political will expressed, which puts many deserving crooks behind bars. The rot starts at the top, they say, and repairing our crippled economy and psyche needs brave and bold leadership. I think we might just have landed some! I have just finished reading an amazing but scary book, which is titled, “How to Steal a City”. It is a remarkable story of the Port Elizabeth metro and the incredible theft and corruption which went on for years, costing the metro and its people dearly. It is the story of Pravin Gordan appointing a brave team to 'fix' the problem and the web they uncover. It is but one story and remarkably shows a positive side to Mayor
Danny Jordaan, who was implicated in the Soccer World Cup shenanigans. It also displayed, for all to see, the sinister side of politics and business and the need to separate politics from the running of our country and its services. I grew up in PE and reading some of the names who had crossed into the “Dark Side” made the book very real. This also brings me to note Suzanne Daniels, the suspended Head of Legal at ESKOM. She was the very lonely and uber-brave whistle blower who stood up against the cronyism at this most critical SOE. The CCMA have re-appointed her. South Africa has many of these brave people. We have heard far too few of their stories and as civic society, tar all civil servants with the same brush, which includes rude, lazy, incompetent, uncaring… clearly this is simply not true of all. My office serves as a barometer of some sorts. Just like in the broader population, it exposes me to somewhat radical swings in sentiment. Six months ago, it was really doom and gloom. Last week, I was lectured about the trajectory of the Rand. The number 8 was mentioned and whilst this is certainly not impossible, it is unlikely. Not so for my bullish visitor. I have often noted NFB's lack of appetite for forecasting. This approach is indeed typical and is a core tenet of our Award-Winning Asset Management business. Here, I prefer to recognise my fallibility and rely on some technical help (see graph on the left). From the graph, you will see periods where radical volatility have prevailed. You will also note the trend to a weaker currency. Typically, the volatility is a result of an event, sometimes as a result of a local event (like the firing of a Finance Minister ¹, or the hiring of a new President), other times a global event ², from which SA is not insulated. The point is that whilst we could well go stronger, the trend is your long term friend and if you smooth the graph, weaker is the most probable trend. Our role as advisors and money managers is often the subject of discussion and review within NFB and our broader Group. With over R28 billion under management and advice, we have a role to serve both our direct customers, as well as the market and population at large. Human nature is tricky and having someone trusted to either assist in decision making, or indeed to make the decision, is taken very seriously in our corridors. Advice and service are what we are about and helping our clients, their families
Source: Thomson Reuters
continued on the third page
The point is that whilst we could well go stronger,
Mike Estment CFP®
the trend is your long term friend and if you smooth the
BA / Chief Executive Officer
graph, weaker is the most probable trend.
NFB Private Wealth Management JHB