With the end of another year fast approaching it is worth “pausing” to reflect on what has been a crazy year so far on many fronts. Unfortunately, politics continue to dominate both locally and abroad creating a difficult environment for investors. So, what has dominated the headlines this year?

 

Steinhoff

  • The revelations about accounting irregularities within Steinhoff dealt major blows to the markets, where many people lost billions due to the massive collapse in the share price of Steinhoff. The share price has dropped a staggering -96.67% from R55.81 a year ago to R1.86 now! It is known to be the biggest corporate fraud in South Africa. The Enron of SA.
  • Markus Jooste to date still denies any wrong doing…

VBS Bank

  • A forensic report compiled by advocate Terry Motau and Werksmans Attorneys laid bare details of how R1.8-billion was stolen from VBS Mutual Bank.
  • The report‚ titled The Great Bank Heist‚ goes into detail about how the bank heist allegedly occurred and lists a number of former executives of VBS and its largest shareholder‚ Vele Investments‚ who were the alleged perpetrators and beneficiaries of the crime.
  • Former president Jacob Zuma‚ the Passenger Rail Agency of SA (Prasa) and Floyd Shivambu’s brother‚ Brian‚ have been implicated in the report.
  • VBS Bank is known to be one of the biggest scandals to occur, with many of the disadvantaged people using VBS bank having lost their money due to the corruption in the leadership surrounding the bank.

State Capture Inquiry

  • Jacob Zuma’s name appeared most often during testimonies, showing his connection to the Guptas and how the Guptas controlled and threatened government individuals. Many ministers accepted various bribes and tenders in order to benefit the Guptas whether directly or indirectly.
  • The State Capture enquiry is still underway and continues to place the ZUPTA’S front and centre!

South African Politics

  • Finance Minister Nene resigned following revelations with his connections to the Guptas
  • Malusi Gigaba resigned as Home Affairs Minister following various scandals, this was a case of resign or get fired!
  • Tom Moyane was suspended and eventually relieved of his duties as commissioner of SARS, following irregularities and the state SARS was put in under his leadership. Tom Moyane continues to fight and dispute this…, a losing battle!
  • Tito Mboweni is back as Minster of Finance and delivered some very sobering news with regards to the state of our SOE’s and economy at the recent mini budget speech.
  • Pravin Gordhan is back again, this time as the Minister of Public Enterprises. Despite continuous attacks from the EFF he continues to soldier on, cleaning up the mess wrought upon us by Zuma. Give that man a Bells!

Julius Malema & EFF

  • Is Ju Ju and the EFF starting to unravel…
  • The revelations of EFF links to the VBS scandal and City of Johannesburg tenders comes at a terrible time for Malema. He wants to be seen as Mr Clean with the approaching elections and these revelations are spoiling his party!
  • He is becoming desperate and scared, and therefore resorting to more aggressive and racial rhetoric, so buckle up!

Cannabis legalized in SA

  • The Constitutional Court of South Africa, the country’s highest court ruled that the personal use of cannabis is not a criminal offence.
  • In a unanimous decision, the court ruled that the ban on private possession and consumption, and cultivation of the plant for own use is unconstitutional.
  • With cannabis becoming more legal industries surrounding it or very rapidly on the rise.

Brexit

  • With the impending withdrawal of the UK from the European union, many are unsure about the UKs future, with some stating that the UK will be worse off and others stating the opposite. We have yet to see a final decision as there are many political issues being raised in the UK while the Brexit matter is dealt with.
  • British Prime Minister Theresa May hopes to win the vote on the 11th December but she is facing more and more opposition from Tory MP’s who are against the deal.

Technical Recession

  • South Africa entered a technical recession earlier this year, when it had two consecutive negative quarters where GDP fell. The markets are still recovering from this and 2018 has seen dismal performance within the South African market. Year to date the JSE is down -14.37%.

US Markets

  • The US markets saw a good start to the year as Trumps election boosted both investor and business confidence within various sectors, thus offshore assets proved to be the best investment option.
  • The Rand is also having a very volatile year pushing passed R15.98 to the dollar and now trading at R13.79.

Bitcoin

  • Bitcoin has been on a downward spiral for 2018, putting the cryptocurrency within striking distance of its worst ever bear market. Its value continues to diminish. Virtual currencies in total have lost more than $700 billion of value since the market peaked.
  • Bitcoin was trading at $13,354 at the start of the year and is now down a whopping -67.46% to $4,345!

North Korea – United States summit

  • The 2018 North Korea – United States summit meeting between US President Donal Trump and North Korean Supreme Leader Kim Jong-un held in Singapore was the first ever meeting held between the two nuclear powers. Fortunately for all it ended in a hand shake and not DEFCON 1 (defence readiness condition).

Test for Trump – US Elections

  • Midterm elections saw Donald lose his first serious electoral test.
  • In the House of Representatives, Democrats secured the 218 seatsneeded to regain control.
  • Democrats won Republican-held seatsin Colorado, Florida, Kansas, Minnesota, New York, Pennsylvania and Virginia.
  • Democrats won the vote for the first time in 8 years.
  • Trump is in trouble, the 45th president of the United States is facing an ever-growing list of scandals ranging from the Russian Kremlin, Stormy Daniels, Mueller investigation and more.

 

Here are 10 things Ramaphosa has accomplished this year

  1. Gupta fightback: On the day of his inauguration, the Hawks moved in to raid various properties belonging to the controversial Gupta family and their business associates. A warrant of arrest has also been issued for Ajay Gupta.
  2. Cabinet reshuffle: On February 26, Ramaphosa’s Cabinet reshuffle saw the likes of Pravin Gordhan and Nhlanhla Nene returning to key ministries. Some members of Zuma’s cabinet alleged to be involved in state capture and corruption were axed. There was another cabinet reshuffle recently, as well as Tito Mboweni being made the new Finance Minister after revelations of Former Minister Nene meeting with Guptas.
  3. Land expropriation without compensation: National Assembly passed an EFF-sponsored motion to begin a process to allow for land expropriation without compensation. The ANC previously voted against the motion, but after its national conference in December where a resolution was taken in its favour, the party voted alongside the EFF.
  4. NPA prosecutes Zuma: In March, NPA boss Shaun Abrahams announced his decision to prosecute Zuma on 783 counts of fraud, corruption, money-laundering and racketeering.
  5. Moyane suspended: Days later, Ramaphosa moved to suspend South African Revenue Services boss Tom Moyane. He now faces disciplinary hearings.
  6. State capture amendments:Ramaphosa made amendments to his predecessor’s state capture inquiry, now allowing testimonies to be admissible in criminal proceedings.
  7. YES initiative: Ramaphosa launched the Youth Employment Service which seeks to empower the youth through paid work experience and seed-funding. It is a collaborative effort between government, business, labour and civil society.
  8. Focus on investment: In April, Ramaphosa shifted his attention to the economy and foreign investment. He announced a high-level team tasked to travel abroad and garner $100-billion in foreign investment. He also struck an R850-million investment deal with the U.K
  9. Intelligence services clean-up: Ramaphosa shifted State Security Agency boss Arthur Fraser, who was facing numerous allegations of mismanagement, to the department of correctional services.
  10. The North-West project: Ramaphosa moved to place North-West under national administration after violent protests calling for premier Supra Mahumapelo’s resignation brought the province to a standstill.

General elections will be held in South Africa in 2019 to elect a new National Assembly and new provincial legislatures in each province. This will be the sixth election held since the end of the apartheid system in 1994. This election will determine who will become the next President of South Africa. Incumbent President Cyril Ramaphosa, the 5th President of South Africa, will lead the ruling African National Congress in the election, attempting to retain majority status and a full term in office as president; his predecessor, Jacob Zuma resigned from office on 14 February 2018 and was already ineligible for a third term in office as the South African Constitution limits a president to serve a maximum of two five-year terms. (thank goodness)

 

There is a Silver Lining

Although there is much doom and gloom around one needs to just cast your mind back twelve months ago. This time last year we were headed for the ANC elective conference where we were getting either Nkosazana Dlamini-Zuma (Zupta candidate) or Cyril (the buffalo) Ramaphosa. Fortunately, and only by the slimmest of margins Ramaphosa won. Although frustratingly slow, he is making headwinds in the right direction.

This year has been a turning point for SA. Significant progress has been made on many fronts, most notably the dismantling of State Capture and the beginning of restoring investor and business confidence. We are not out of the woods yet, with the greatest threat to democracy assuming that the worst is over, we have a long way to go yet!

Hopefully after next year’s general election’s Ramaphosa will have enough Party and Public support to put SA on the correct trajectory.

Fortunately, it is almost holiday time, which for South African’s cannot come quick enough with what we have had to endure… As a nation we find ourselves in a state of flux which is likely to continue until after the General Elections which is due to be held mid-2019. Hopefully thereafter we can set about rebuilding our beautiful Rainbow Nation!