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Simon’s weekly wrap: A period of great expectations

This week MoneywebNOW looked at budget expectations, new regulations affecting retirement funds, the rand, as well as preference shares, Dis-Chem and more.
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The national budget is due on Wednesday and it’s anticipated to be tough, barring the fact that tax receipts are some R100 billion ahead of expectations from October. Now while they’re sure to be weaker than projected a year ago, Wikus Furstenberg from Futuregrowth Asset Management does think this gives the finance minister some space to make a less painful budget from a personal income tax point of view.

March 1 is an important day for those with retirement funds, as three new regulations come into force. The most talked about deals with emigration, but there are also new rules around annuitisation which is very important for those not emigrating. I spoke with Faeeza Khan from Liberty to get a simple explanation of exactly what the changes are and how they’ll impact us when we retire.

Globally we remain in a low-yield environment, which makes the search for yield that much harder and as such riskier. Small-cap analyst Keith McLachlan has however dug into locally-listed preference shares. Essentially these are debt instruments taxed as dividends (20%) that can offer yields well above what banks are offering for cash, without much increase in actual risk.

The rand continues to defy predictions as it strengthens to below 15/US dollar and I spoke with Anchor Co-CIO Nolan Wapenaar on what’s driving this strength and what they think is a fair value for the currency.

Also this week:

Gary Booysen of Rand Swiss expresses concern as to whether, in a digital world, pharmacy retailer Dis-Chem is going to need the huge bricks-and-mortar footprint it now has.

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