The latest on Steinhoff

The recent significant market events related to Steinhoff International Holdings and its subsidiaries have been widely reported in the media and we would like to share our views as well as the views of the various asset managers who manage your portfolios.

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Ratings Downgrades and our Equity Positioning

If the cap fits, wear it – actions come with consequences. Even though President Zuma’s cabinet reshuffle last week effectively made rating downgrades far more of a certainty in our minds, it still came as a surprise when S&P downgraded South Africa’s foreign credit rating by one notch last night to “junk status” (BB+), ahead of their scheduled June review.

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Cabinet Purge Ignites Downgrade Decision

A lot has been said over the past year in the media regarding the possibility of whether South Africa (SA) will be downgraded to “junk status” by the respective rating agencies, namely Moody’s, Standard and Poor’s (S&P) and Fitch.

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The Zuma Shock

While you were away, much has transpired in our economy, headlined by the shock removal of Minister Nene by Jacob Zuma. The surprise announcement was not received well by markets, with an estimated R500 Billion in value, being wiped off since the debacle.

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Why and How to Invest Offshore

Investors are regularly reminded of the wisdom of investing offshore and not adopting an investment strategy that focuses only on South African assets. There are a number of compelling reasons for investing offshore.

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The Greek Saga…

Grab your popcorn and hold onto your seats folks, because it looks like this movie (already longer than a Tolkien trilogy) might be heading for its grand finale. While our American friends are getting ready to celebrate July 4th, it looks like we may see some fireworks from this side of the Atlantic in the coming few week also, following one of the most over-reported financial sagas in the financial press in the last 6 months (even Janet Yellen’s Facebook count has waned of late).

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Estate Duty and Capital Gain Tax on Offshore Assets

Many South Africans have invested in offshore property in recent years but neglected to consider the tax effect from an estate planning point of view, as it is often assumed that offshore assets will not form part of a resident’s estate for estate duty purposes. In South Africa residents are taxed on worldwide income and capital gains and estate duty is levied on the worldwide assets of ordinarily residents including offshore assets. Therefore, it is essential to consider the amount of estate duty and capital gain tax (hereinafter referred to as “CGT”) payable on death with regards to offshore assets, as this will have an effect on the liquidity of the estate.

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