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Let's assume SA gets downgraded further in Dec and this time the local currency debt also gets downgraded. What implications will this have for money market investments? As I understand it, the banks... See more...
Let's assume SA gets downgraded further in Dec and this time the local currency debt also gets downgraded. What implications will this have for money market investments? As I understand it, the banks can never have a higher rating than the sovereign. Is there a higher likelihood that banks will go bust a la African Bank which obviously have big implications when it comes to money market accounts. I know other funds as well, but I am specifically interested in MM.
Who said investments can't be fun? 
Very good list to start at trading for South African trader, best forex broker in south africa.
Hi Ernest,   I guess it depends entirely on what you’d like to achieve – i.e. do you want to trade or invest? Would you like to invest actively or once a month? Do you want to be able to trade an... See more...
Hi Ernest,   I guess it depends entirely on what you’d like to achieve – i.e. do you want to trade or invest? Would you like to invest actively or once a month? Do you want to be able to trade any shares listed on the JSE?   Auto share invest allows you to invest in some of the listed shares on the JSE - although the number of shares itself is limited. There are also limits on when you can buy and there's a minimum investment amount of R500.00   Tax-free investments are available only for specific exchange traded funds (ETFs), there are no tax-free shares. It’s also important to note that there’s a difference between tax-free savings account and a tax-free investment account. A tax-free savings account (TFSA) is offered by Standard Bank while a tax-free investment account (TFIA) is offered by Standard Online Share Trading.   You should pick your platform based on your investment or trading needs.    For more info on ASI click here For info on bank TFSAs, click here For info on TFSIs click here (for Online Share Trading) For info on Online Share Trading click here
Insightful & though provoking.  
  I am preparing a webcast on debt and have been digging around debt covenants and ultimately I wonder if shareholder even know about them never mind fully understand the implications. Wh... See more...
  I am preparing a webcast on debt and have been digging around debt covenants and ultimately I wonder if shareholder even know about them never mind fully understand the implications. When we borrow money in our personal capacity the lender needs to be happy that we can pay it back and as long as we’re making the required payments on time they’re typically happy. With our listed companies most times the debt will come with a number of additional strings attached, called debt covenants. Examples could be a total level of debt, or EBITDA margins or even just revenue could be a debt covenants. The trick is that if breached the debt can be immediately recalled putting the company under severe strain. As a rule these debt covenants are not detailed in annual results, but may be referred to if they’re close to be breached as with the recent example of Lonmin. To find the information we need to dig through annual reports and often we’ll need to go back many years for full details from when the debt was first taken out. Now for the vast majority of listed stocks their debt covenants are not an issue as they’re not anywhere near breaching them. But for a few struggling stocks on the JSE they are a real issue and the bigger picture here is that it is struggling stocks that have the issue. So, tough times can suddenly become a lot tougher and it reminds me of the saying; “how does a company go bust? Slowly at first then suddenly”. A breach of debt covenants can make a tough situation untenable and send the company over the edge and the problem is most shareholders are unaware of the details until it’s too late. A quick last but important point. Debt is not bad as often this is how a company grows. They borrow money that is put to work generating a higher lasting return, but when things turn south debt becomes a real issue that may require a rights issue or new more onerous terms for the debt.   Simon
I hold SHP and WHL. SHP I happy with, they low LSM market and tough times helps them as will returning rains which will help with pricing power.   WHL is going to find it tough locally and even t... See more...
I hold SHP and WHL. SHP I happy with, they low LSM market and tough times helps them as will returning rains which will help with pricing power.   WHL is going to find it tough locally and even the OZ economy is struggling. I have a bunch here but am holding as that's my strategy for my 'til death do us art' portfolio. I only sell if there is a significant fundamental change to the business and tough economic times does not equal that.   BAT - it's all about the UK consumer but me thinks the price is probably about right for buying.
Hi Does anyone know the difference between these? Which can i use to buy and sell shares online with going through a trader or broker?  
Well the sad thing is that here in Knysna the builders will be busy for the next 18months....if you have not lived through this you will have no idea of how bad things are.  
      Shares and market risk   Companies have two choices when they want to raise money to grow their business: to borrow from a bank or issue stocks. A share represents a proprieta... See more...
      Shares and market risk   Companies have two choices when they want to raise money to grow their business: to borrow from a bank or issue stocks. A share represents a proprietary interest that a person holds in a company and shareholders fully participate in the dividends, capital and surplus upon the winding-up of the company The key advantage in issuing shares (or equity) is that the company does not need to pay back the capital amount or make interest payments. Instead, shareholders – the people who buy those shares – can hope to receive dividends and see a capital gain on their investment. Share trading involve risk. Traders accept these risks every day as they risk a portion of their capital in the hope of receiving a return on their investment. You win some and you lose some. However, the better you understand the risks that affect you as a trader the better you can protect yourself from those risks. Traders have to confront many forms of risk as they evaluate and manage their trades. For instance a trader who owns stocks in Wal-Mart (WMT:xnys) has to be concerned not only with how well Wal-Mart as a company is performing but also with the general condition of economies around the world. They also have to be concerned with how well the U.S. stock market is performing and whether or not the value of the U.S. dollar is strong or weak, rising or falling. As you will have to understand all manner of risks if you are to counteract the forces that are going to push your share prices higher and lower. Once you understand the risks facing your trades it is possible to minimize the affect they can have on your profitability.   How a stock exchange works   The New York Stock Exchange (NYSE), the London Stock Exchange (LSE), Tokyo Stock Exchange and the JSE Limited (JSE) are all, simply, markets for stocks. Stock exchanges have two purposes. Firstly, they are places where traders can buy or sell stocks and, secondly, companies can use them to raise cash to expand their business by selling new stocks to investors. Stock exchanges provide investors with two advantages: They reduce the risk of investing by providing a transparent pricing mechanism for trades. They police listed companies. Stock exchanges operate in a strict regulatory environment and companies have to comply with stringent listing requirements. Investors use share indices to track the performance of the underlying stocks and sectors. When we refer to "the market", we're actually referring to an index that is a proxy for all the stocks listed on that exchange. An index is defined as "a statistical measure of the changes in a portfolio of stocks representing a portion of the overall market". That means that when an index is up, most share prices have increased and vice versa.   What makes a share price move?   In a nutshell, the forces of supply and demand are the key determinants of changes in share prices. In the simplest terms, the share price will go up if more people want to own a share than are prepared to sell it. Over time, a share price will track the underlying trend in the company's earnings: if earnings (and dividends) grow consistently, the share price should follow. But there are other aspects that affect investor appetite for stocks including the performance of international markets, general economic growth, sector or company-specific news, share buybacks and futures trading. Overall, share prices tend to go up when the economic news is good as this means companies should see their earnings increase. In addition, good news from a certain sector or company can drive share prices up as investors expect good future earnings. There are other buyers of stocks apart from investors, including companies (through share buybacks) and futures traders. They also affect the demand/supply equation.   The risks of investing in shares   We've all heard that there's no such thing as a free lunch – and this is as true of investing as anything else. Over time, stocks have outperformed other asset classes – like government bonds, property and bank deposits – but this comes at a cost. That cost is that investing in stocks is riskier than other asset classes. The old adage "high risk, high return" means that an investor who takes on the higher risk of investing in stocks expects a higher return for doing so. These are some of the risks of investing in stocks: Share prices can – and do – go down as well as up. Investors can reduce their risk by doing their homework and always knowing exactly what they're investing in. That includes evaluating "tips from friends". Some stocks can be illiquid. This means that they can be difficult to trade, often because there is a controlling shareholder who owns a large percentage of the company and is not selling those stocks on the market. This means that a share can be difficult to sell. To avoid this, invest in more liquid stocks. Companies do not have to pay dividends. This is not necessarily a bad sign if the company is keeping that money to invest in its future growth, but is a risk for shareholders who bought that share for the dividend income. If a company goes bankrupt, shareholders may lose the entire value of their investment. Ordinary shareholders only receive what's left over once creditors and preference shareholders have been paid their due. Companies can disappoint the market by reporting lower-than expected earnings. This can mean the share price either falls or lags behind the growth of its peers. Share prices factor in the market's view of management's competence and integrity. Scandals, such as the revelation of fraud or poor corporate governance, can hurt the share price. But you shouldn't be frightened of investing in stocks. Most listed companies are well-run businesses and their share prices should increase over time.
    Much like trading currency pairs, spot metals enable traders to take a long or short position for example, in gold (XAU/USD) or silver (XAG/USD) while simultaneously taking the op... See more...
    Much like trading currency pairs, spot metals enable traders to take a long or short position for example, in gold (XAU/USD) or silver (XAG/USD) while simultaneously taking the opposite position in the US Dollar or other major currencies. Spot Precious metals trading is an over-the-counter market globally. Prices float freely based on supply and demand. The spot price is the price quoted for the metal to be paid - including delivery - two days following the date of the actual transaction (also known as the settlement date). Spot Precious Metals trade in a similar manner to how currency pairs are traded in the foreign exchange market. Trading is available 24 hours a day from Sunday at 24h00 to Friday at 23h00 (CAT). During the US Winter, trading will be from Monday 01h00 to Friday 24h00 (CAT). Although there is no central market, the main centers for trading Spot Precious Metals are London, New York and Zurich. Liquidity is typically highest when European market hours overlap with trading in New York - roughly four hours a day during the morning for US traders. There may be some illiquid periods for trading spot Precious Metals around the close of the US market (17h00 to 18h00 ET). The twice-daily gold fix and daily silver fix in London helps set reference points for intraday prices. Settlement happens in much the same way as it would for foreign exchange settlements. Reasons for trading Spot Precious Metals There are many different reasons that drive investors to trade Spot Precious Metals. Some of these are: Speculation on the price based on the use of fundamental and or technical analysis. Creating a balanced, diversified asset allocation model for an overall investment portfolio. Applying risk management as a hedge against market volatility and financial crises caused by economic, political or social turmoil. How to read a Spot Precious Metals quote   Reading a Spot Precious Metals quote is very similar to reading a FX Spot quote. It is even represented the same way (for example, spot gold traded against the US Dollar is XAU/USD). Consider the following example: XAU/USD 1700.00 The first symbol listed is one (1) troy ounce of gold. The value of gold is always one (1). The price literally translates to: one (1) ounce of gold is equal to 1700.00 US Dollars. When the price or quote for gold goes up, it denotes that gold has strengthened in value and is therefore worth more dollars than before. If the price of gold declines, it takes fewer dollars to purchase one (1) ounce of gold and one could therefore conclude that the value of the dollar had increased compared to the value of gold. Bids, asks and spreads   Identically to other markets, Spot Precious Metal quotes consist of two sides, the bid and the ask price: The BID is the price at which you can SELL. The ASK is the price at which you can BUY. The difference between the bid price and ask price is called the spread.   Spot Gold and Silver prices are quoted internationally in US Dollars per troy ounce. In the following example, a quote of XAU/USD 1700.25 means that 1 oz gold is equal to US$1700.25. If you buy a single lot of gold (one (1) lot = 10 oz) at this price and sell it at a higher price, your profit would be the difference between these two prices. Bearing this in mind, trading Spot Precious Metals on Webtrader is similar to trading currencies. A typical quote you might receive for spot gold is 1700.25/75. In this scenario, you could sell one (1) or more lot(s) of gold at 1700.25, or buy at 1700.75. The spread you would pay in this example would be the difference between these two prices (900.75-900.25) or 0.50. The dollar amount represented by the change in price would depend upon the size of the trade you have placed. Pips or points: what's the difference?   Like forex prices, spot gold prices are quoted in tiny increments called pips ("percentage in points"). Located at the second decimal place for a spot gold quote, or 0.01, each pip represents one (1) cent in dollar value. Market drivers   The following factors and conditions may influence the price of metals:   As a hedge against inflation Investing in gold and silver is often seen as a hedge against inflation. The thinking behind this is that when buying power decreases, thereby affecting the price of currencies, owning gold will hedge against your wealth decreasing. Doing so ensures that you will receive a commensurate amount of currency for the amount of gold you own, no matter what the inflation rate is.   As an alternative to the US Dollar Gold and silver is also used as a hedge against the US Dollar in times of economic turbulence. Thus when the reserve currency comes under pressure, investors tend to seek out alternatives.   A “safe-haven” investment Another view of gold is as a "safe-haven" investment. During times of high volatility and risk, investors may move funds to gold as a way to safeguard against uncertainty.   Understanding economic and political factors Indicators that impact inflation such as the consumer and producer price indices, interest rate announcements, and treasury auctions play a large part in determining the inflation rate, and therefore have an impact on gold prices. Macroeconomic indicators, such as the Unemployment Rate and Gross Domestic Product (GDP) also shed light on the strength of an economy, and may lead investors to lean towards or away from spending money on gold. In the past, there has been a strong negative correlation between precious metals and the US Dollar. In the current economic environment this correlation has weakened, however we should keep in mind that it could resurface at any time. Political events can also significantly impact the price of gold. If uncertainty arises over conflict in the Middle East, this might have an effect on the perceived safety of an investment in a country's bonds or currency, and to hedge against this risk, investors might move funds into gold or cash. Oil and other commodity prices may also be affected, which could carry over into the gold markets, pulling or pushing the price of gold in the same direction as oil. Typically the spot gold market is somewhat volatile, given the ability to enter and exit trades several times a minute. For this reason, prices may be more susceptible to short-term fluctuations that do not necessarily follow a long-term trend. Leverage and Margin   Leverage in Spot Precious Metals Leverage for Spot Precious Metals trading varies according to the type of metal you are trading in – refer to our list of prices for full detail. If the leverage for gold is for example 100:1, for every USD 1 you have in your account balance, you have USD 100 worth of buying and selling power to trade gold. As a result, leverage increases a client's buying and selling power and enables them to participate in a market that may otherwise be cost prohibitive. Do keep in mind though that increasing leverage leads to increased risk.   Margin in Spot Precious Metals Margin is the amount of money you must have in your account to hold a particular trade. At 100:1 leverage, your margin factor is 0.01 (1%). This means that you are required to have a minimum cash balance of 1% of the total value of the positions you hold in your account at any one time. If you fall below this amount, your trade may be closed automatically, also referred to as being liquidated.   Take a look at an example: If you wanted to place a trade of one (1) lot (10 troy oz) of spot gold, and buy it at US$1720.55, the amount of margin you would be required to maintain would be 1% of your trade size.   Therefore, 10 (oz) multiplied by the price (US$1,720.55) and the margin factor (0.01) would give you US$172.055. 10 x US$1720.55 = US$17,205.50 US$17,205.50 x .01 = US$172.055 This would be the margin requirement for a single lot of spot gold bought at the above price. If your account balance were to fall below this level, your trade would be automatically closed. Another way to look at this example is to say that 100:1 leverage gives you the ability to trade 10 ounces of gold at US$17205.50, with US$172.055 How to calculate profit and loss   Consider the following examples: Profit and loss calculations for Spot Precious Metals are fairly simple. The smallest increment of a spot gold price is 0.01. For spot silver, it is .001. The smallest trade you can place in spot gold or silver is a single lot. For gold that is 10 troy ounces, and for silver it is 500 troy ounces. At this level, each pip is worth US$0.10 for gold and US$5 for silver. For example, a change in price from 1720.50 to 1720.80 in gold means a difference of 0.30, or 30 pips. If you are trading one (1) lot, and each pip is worth 10 cents, then the profit or loss from this trade would be US$3.00. If you decide to trade more than one lot, the value of each pip is simply multiplied by the number of lots you are trading.  
I currently hold shares in Brait, Shoprite and Woolies - all have exposure to the SA consumer sector and I want to scale down on that. Which should I let go? Any thoughts?
Hi @Ndlovu_M   I was clarifying at which point the USD/ZAR conversion happens during withdrawal - a matter of fact regarding the process which you inquired about, quoted below: If I requested... See more...
Hi @Ndlovu_M   I was clarifying at which point the USD/ZAR conversion happens during withdrawal - a matter of fact regarding the process which you inquired about, quoted below: If I requested a withdrawal today, right after the trade, and asked you to deposit my profits into my SA Savings account.... which exchange rate would you use for the USD to ZAR conversion? To clarify - the exchange rate given is determined by your transactional bank and NOT the Webtrader team.    I did not speak to your particular trading strategy and the risks therein because this is not a forum for personalised financial or trading advice - such would require a consultation with a financial adviser or financial planner.    If you need further assistance, please let me know. Alternatively you can contact the Webtrader team on 0860 121 555 .   Kind regards, Dineo  
One of the businesses I've been involved in is the liqour trade and Jan - Mar quarter was the worst I've experienced in 35 years. The other one that deals with trading with farmers has had the worst ... See more...
One of the businesses I've been involved in is the liqour trade and Jan - Mar quarter was the worst I've experienced in 35 years. The other one that deals with trading with farmers has had the worst 12 months since 1998, that can be put down to the drought of 2015/16 and a third that supplies one of our listed food retailers has showed signs of zero growth the last 3 quarters, year on year. The capex of R75million we were planning on two of our companies has been put on hold indefinitely, which would have meant a few million Rand spent in salaries and wages, back in the economy,and we are small fry. I have no doubt there a billions ready for investment if there was political stability, reduction of crime, especially violent crime,( having had a family member murdered, and a gun held to my head, my daughter and granddaughter hijacked), and this non stop rhetoric of "rad econ trans" and "land exprop without compensation", so I fear we're in for a long, long pull this time. The slide started some time ago but it seems to be gaining both momentum and speed. Not the "prophet of doom" but "realistic"
Owning shares in SNV and being out the country when the dividend offer was made and getting back a day ago, I did my calcs and I think that most shareholders will opt for shares rather than cash. The... See more...
Owning shares in SNV and being out the country when the dividend offer was made and getting back a day ago, I did my calcs and I think that most shareholders will opt for shares rather than cash. The shares are being issued at zero cost so, capital gains on disposal is only an issue if you're holding a few million shares.
@Dineo_T   Dineo, in essence you're saying: a client can request to withdraw their profits today... but, by the time the '5 day withdrawal process' is finished, the client could very easily find... See more...
@Dineo_T   Dineo, in essence you're saying: a client can request to withdraw their profits today... but, by the time the '5 day withdrawal process' is finished, the client could very easily find themselves sitting with a huge loss instead!! Personally, I find it unethical for a person to advise on a process, but intentionally forget to explain the Main Risks involved within that very process.    Next time, please don't forget to add the following Disclaimer to your comments whe advising clients/potential cleints. After all its a clause that exists in your Terms of Service right?   "21.1 Standard Bank, its affiliates or other persons or companies connected with Standard Bank may have an interest, relationship or arrangement that is material in relation to any transaction or Contract effected, or advice provided by Standard Bank, under the Terms, which may be in conflict or in competition with Client’s interest"
Thanks for the feedback.
usually 2-3 quarters, so you're almost out by the time it's confirmed. But I think this one longer as we have less amo to fight it. In the 2008 recession we had space to cut taxes, boost spending and... See more...
usually 2-3 quarters, so you're almost out by the time it's confirmed. But I think this one longer as we have less amo to fight it. In the 2008 recession we had space to cut taxes, boost spending and lower artes. This time all we got is rates and I think a stronger Rand.   Bottom line I think this one 4-5 quarters so till end of the year :(   Here's hoping I am very wrong, but even if we get out quick growth goign to be very mdest at best. Sub 1% so recession or not it staying tough
Hi Simon,   What is the typical duration of a recession based on your experience? How long do you think we (SA) will be in recession?  
  On the back of junk status, we now also have a recession and unexpected or not the economy and consumer have been under severe pressure for a while.   What can the government do? C... See more...
  On the back of junk status, we now also have a recession and unexpected or not the economy and consumer have been under severe pressure for a while.   What can the government do? Cut interest rates. We have space for this, maybe as much as 1% over the next several MPC meetings. But we can’t get overly aggressive here as rates are already close to historical lows. Cut taxes to try stimulate the economy. Not likely, if anything tax increases were the plan and we don’t have the money to cut them just as we need to raise them. Increase government sending. Again, we don’t have the money and more debt could see rating agencies pushing us even lower into junk. Work with business to get business spending and stimulating the economy. There is lots of talk about this, but not much action?   So very little the government can do and as such I expect this to be a long painful recession rather than short and sharp.   On the personal side, we’ve had since December 2015 to prepare as below; Quality stocks only with a strong bias to offshore earnings. Be very careful of SA Inc. stocks as they are going to seriously struggle. Be very careful of small / mid cap stocks as liquidity is drying up and they will struggle in the weak economy. Reduce personal debt and spending. Keep investing, keep buying ETFs and funding your tax-free account. What’s your thoughts and ideas?   Simon

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