In this monthly update, I want to focus on the two contentious issues that our current Government in power wants to introduce at least as National Government Policy before the next national election geared for around April 2019; less than a year away.
It is my contention that the ANC, led by Cyril Ramaphosa and his NEC, are strategizing to win the next national and provincial election by a majority vote. Therefore, they have to convincingly propose or implement new policies that will appeal to the masses. The ANC has already lost votes in the recent main city elections and with the poor governance track record left by the Zuma legacy, they have to make up for lost ground as well as look to capture future votes from the electorate.
What is it though, that we as normal citizens have to be concerned about and how will these new policies on land and health proposed at this stage affect us. Firstly, with regards to the EXPROPRIATION OF LAND issue, I found a sensible and non-politically biased article put together by Schindlers Attorneys SA, which I have attached. The bottom line is that your residential property will not be affected. Secondly, the proposed NHI (National Health Insurance) bill, which is a forced collection of money system aimed at distributing better health care for all SA citizens is on the cards. Given our current health care provision with Private Health Care enjoying the financial support of around five million medical aid subscribers representing close to 10% of the population and poor-quality care available to the other 90%, I don’t think we can argue with this proposed health care policy which is essentially further down the road in “white paper” form at parliamentary level!
Recently we have seen a wave of protest action, from wage issues to service delivery, accompanied by destructive behaviour, intimidation and violence adding to negative sentiment from the developed world and investment community towards South Africa, whereas our first world counterparts such as the USA, China and Europe are experiencing a more positive economic trend this year. This is apart from a bit of tension regarding threats of the trading issues between Donald Trump and the developed countries.
So where does this leave us now with regards to where and how to invest as South Africans. Interestingly, the end of June 2018 second quarter will see record dividends being paid out by listed companies as these respective companies’ share prices have seen a decrease over the last six months and are profitable. The main reason for the decrease in share prices is the sentiment issue mentioned which has seen large outflows of capital by the international investor – bonds were hit quite hard too. This situation has to lead to buying opportunities going forward for the investor who has an appetite for risk; from listed shares (equity) to property. This is not for the retired person. My view remains that retired folk should remain invested in or invest in low risk assets such as income-based unit trust funds that have a good track record performance surpassing the best bank rate assets.
In my view things will turn in SA for the better, we need to be patient and give our development as a new democracy space and time.
That’s it from me for now,