In the news – some anxiety, some advantage

On busy days at Chartered House, you may find me picking up on news headlines between meetings. Our round glass table in reception displays the daily newspapers, and I regularly scan them for positive news – sometimes, in vain.

National Health Insurance Bill

The headline catching my eye in the last few months has been of particular concern: the tabling of the National Health Insurance Bill, which aims for universal access to primary healthcare for all South Africans. My immediate question is “How?” I have had many discussions with friends and clients who are doctors and their predominant feeling is that there is not a chance that they can depend on getting paid by the government every month. Furthermore, how can six million taxpayers fund this scheme for a population of 55 million people?

This proposed Bill, together with the Expropriation Bill (land expropriation without compensation), has South Africans in a state of suspended agitation – on those proverbial tenterhooks. Both these Bills still need to go through an extensive parliamentary process before becoming legislation.

Good news for Investors

On the investment front we saw South Africa’s largest stock and success story Naspers announce the listing of its offshore assets in a new entity on the Amsterdam Euronext market. This new share, Prosus, holds all of Naspers’s foreign-owned assets, which includes its 31% holding in the Chinese internet giant, Tencent. I am explaining this to you because most of our clients (through their unit trust holdings) hold approximately 9% of their equity investments in Naspers, so this is a significant development for all of us.

The rationale behind this move is as follows:

• Naspers was 21% of our JSE and this size had become a constraint
• Naspers is now 14% of the JSE.
• By listing offshore, Prosus is now eligible for inclusion in the global indices.
• Developed market funds could not buy Naspers before owing to limitations on their mandate; they can now invest in this for the first time.
• This is very positive for the South African investor, who now holds shares in both Prosus and Naspers.

Prescribed Assets

I have noticed in client meetings that many people are concerned about Prescribed Assets, where the government makes it law for retirement funds to invest in certain government-approved investments. For any of us, the thought of buying bonds in SAA or Eskom is most concerning.

There are couple of important points to note:

• This policy applies only to retirement funds, such as RAs, Pension funds and Provident funds.
• This policy does not propose to include living annuities.
• It will only apply to a very small percentage of your investment, if at all.
• At this stage, the policy has been mentioned as a consideration; but, for it to be implemented, it must go through fairly rigorous process and will take a long time to become law. We will keep you informed of any further developments.

Great news for the Chartered Family

We congratulate one of our Retiremeant Specialists, Tiffany Venter, on her marriage to Chris over this past weekend. We wish Mr and Mrs Havinga much happiness for their future.