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With the All Share index seeing it's highest start in over a decade, Simon Brown talks to us about what drove this performance. We also look at the biggest winners and losers for the month of march and discuss why financial services had such a difficult time last month.   Listen below...         ...or watch on YouTube    

Looking at the spread on AYO – which yesterday was rather large 70 – 1500 (today 400 - 1500), and seeing that there are trades going through at 1500, and reading Mr Surve’s comments to the PIC investigation, on Moneyweb today…..seems there is a somewhat disconnect between his valuation and the current spread.  Yet trades at market seem to be going through.  Is AYO being propped up……or o the people who are buying AYO at 1500 know something the rest doesn’t.  Am just curious here....since I suspect Mr Surve is somewhat ensconced in a small cushion of hubris!     Who's buying at market.......

When you buy a tracker you don't expect to see a Total Expense Ratio of 0.86% - YOU DO expect to see one closer to 0.40% !! So here you pay what amounts to an active management fee - for a guaranteed underperformance ? Not only are these charges expensive by any standards - they are held up by these ETF houses - as being cheap- aikona!  Time people started shouting. Do they have a place - in a portfolio- yes but...?  

      For the full guidelines related to the completion and declaration of investment income in the ITR12 return for individuals, please visit the SARS website.   Please note that the questions below are intended as guidelines. If you need special tax advice, please consult  an independent tax consultant who will assist you to complete your tax returns. SBG Securities Proprietary Limited (“SBG Securities”) and The Standard Bank of South Africa Limited (“Standard Bank”) do not provide tax advice to clients.   QUESTION 1: Where and how do I disclose the investment income on my IT3 tax certificate in my IT12 tax return?   The first page of the ITR12 return consists of a number of questions. Your ITR12 return will be customised according to your responses to these questions. On the first page of your electronic return, you will be asked the following questions relating to investment income: Did you receive income from interest (local and foreign), distributions from a Real Estate Investment Trust (REIT), taxable foreign dividends and/or dividends deemed to be income in terms of section s8E & s8EA? (Excluding amounts received as a beneficiary of a trust(s), or deemed to have accrued in terms of s7) If your client statement discloses an amount of interest, or taxable foreign and/or local dividends received, or other investment income as indicated above, click on “Y”. The wizard will generate the “Investment Income” section of the return. (You must select “Y”, even if the amount received is below the amount of the investment income exemption). Online Share Trading (“OST”) clients (not trading on Standard Bank’s Webtrader platform (“Webtrader”)) will not receive foreign dividends except in respect of shares that are dual or inward listed. These dividends are exempt from income tax but may be subject to Dividends Tax (“DWT”) levied either in South Africa and/or offshore. Only Webtrader clients should thus consider whether they have received any taxable foreign dividends. Were there any transactions (contributions, transfers, withdrawals, income received/accrued) on any Tax-Free Investment (“TFI”) in this year of assessment? If you have invested in a TFI during the year, you need to answer “Y” to this question and the wizard will create a field to declare TFI transactional and financial information in the return. Did you dispose of any local/foreign assets attracting capital gains or losses? If you are of view that any gains or losses disclosed in your ‘Report of gains and losses’ are subject to the capital gains tax provisions, you need to answer “Y” to this question and indicate how many disposals took place.   If you received investment income, it is important that you indicate your marital status correctly on the first page of your return as it may impact the calculation of your assessment. The total amount of your investment income must be declared even if you are married in community of property as SARS will do the necessary apportionment.   QUESTION 2: Where do I need to disclose local interest in my IT12 return?   The total amount received or accrued in respect of gross local interest income must be reflected under source code 4201.   QUESTION 3: Where do I need to disclose foreign interest in my IT12 return?   Your client statement will disclose any gross foreign interest income that you may have received or accrued, followed by an amount described as “Tax paid – foreign”. This refers to the withholding tax paid on foreign interest received.  You should declare the total gross foreign interest income in the “Foreign interest” field (source code 4218) and the “Tax paid – foreign” amount in the field “Foreign tax credits on foreign interest” (source code 4113).   QUESTION 4: Where do I need to disclose local dividends in my IT12 return?   With effect from 1 April 2012, Dividends Tax (“DWT”) of 20 percent applies to dividends declared by South African resident companies, subject to the exemptions listed in sections 64F and 64FA of the Income Tax Act No. 58 of 1962 (“the Act”). There are generally no exemptions available to South Africa individual shareholders. The DWT is paid on your behalf by the company declaring the dividend or by a Regulated Intermediary, such as your broker or central securities depositary participant (“CSDP”). You must declare the total gross dividends received or accrued in the field “Exempt local and foreign dividends” in the section of the return headed “Amounts considered non-taxable”.  You do not declare the “DWT” that has been paid on your behalf, in your return.   QUESTION 5: Where do I need to disclose foreign dividends in my IT12 return? (Only applicable to Webtrader clients)   Your client statement will disclose any gross foreign dividends received, followed by an amount described as “Foreign Dividend Withholding Tax”. The foreign dividend should be declared in the field “Gross foreign dividends subject to normal SA tax” (source code 4216).  The exemption (section 10B(3) of the Act) will be applied automatically by SARS.   If any foreign DWT was paid on the foreign dividend received (disclosed on your client statement as “Foreign Dividend Withholding Tax”), this should be declared in the field “Foreign tax credits on such foreign dividends” (source code 4112). The gross amount of foreign DWT should be declared.     QUESTION 6: Where do I need to disclose dividends from dual / inward listed foreign companies in my IT12 return?   Your client statement will disclose gross dividends received from companies that are listed on both a foreign stock exchange and the JSE. Any foreign dividend (i.e. a dividend declared by a foreign company listed on the JSE) is exempt from income tax in South Africa under section 10B(2) of the Act. It should be noted that although such dividends are defined as “exempt income”, they are still potentially subject to the DWT percent (which is further discussed below). This amount must be declared in the “Amounts considered non-taxable” section of the return, in the field called “Exempt local and foreign dividends”.   Your client statement will disclose any DWT levied by a foreign country in respect of the dividends from foreign companies that are listed on the JSE and a foreign stock exchange. This amount may be described as “Foreign Tax – Instrument”. As these dividends are treated as “exempt income” for income tax purposes (discussed above), SARS will not allow a tax credit for the foreign DWT suffered. However, section 64N of the Act will provide relief from double tax where both South African and Foreign DWT is levied.   A rebate is allowed against DWT in South Africa equal to the amount of foreign DWT suffered up to a maximum of the South African DWT rate, being 20 percent. For example, to the extent that the investor has suffered foreign DWT of 20 percent** or above, no DWT will be levied in South Africa. If foreign DWT was suffered at 10 percent, for example, South Africa will levy DWT at 10 per cent. Where no foreign DWT is levied by the foreign company, the JSE will levy DWT at 20 percent. Any foreign DWT in excess of 20 percent is a cost to the taxpayer, unless reclaimable directly from foreign revenue authorities as a result of the application of a Double Tax Treaty between countries. You still do not declare the SA DWT on your tax return. The Section 64N rebate is applied automatically by the JSE.   The amount of the Section 64N rebate is limited to the maximum rate prescribed in any Double Tax Treaty. In the example above where the South African investor has suffered 20% foreign DWT, but the Double Taxation Treaty prescribes a maximum rate of 15%, Section 64N will only grant a rebate to the maximum Treaty rate i.e. 15%. SA will continue to levy an additional 5% SA DWT under our domestic tax law. The foreign tax imposed that is in excess of the Treaty rate, is recoverable from the foreign tax jurisdiction.   ** The 20% DWT rate can be reduced by a Double Tax Agreement between SA and the foreign jurisdiction   QUESTION 7: Where do I need to disclose dividends from a Real Estate Investment Trust (REIT) in my IT12 return?   REITs are companies listed on the JSE that manage a portfolio of immovable property assets. Dividends distributed by a REIT are subject to normal income tax in the hands of the shareholder, but are exempt from DWT.    Your client statement will disclose gross taxable local dividends if you received distributions from a local (SA) REIT. The total gross taxable dividend amount should be declared next to source code 4238.  It should be noted that distributions from REIT’s do not qualify for an interest exemption.   If you received distributions from a foreign REIT (i.e. an offshore company that is not a REIT for SA tax purposes), these distributions are “foreign dividends” subject to offshore DWT. These foreign dividends would need to be declared under source code 4216 on your tax return. If any foreign DWT was paid on the foreign dividend received (disclosed on your client statement as “Foreign Dividend Withholding Tax”), this should be declared in the field “Foreign tax credits on such foreign dividends” (code 4112). OST clients (not trading Webtrader) will not receive foreign REIT dividends unless the company is dual / inward listed.   QUESTION 8: Where do I need to disclose my Tax-Free Investments movements in my IT12 return?   A TFI is a financial instrument or product offered to natural persons or a deceased/insolvent estate of a natural person, and administered by a person designated by the Minister of Finance (for e.g. banks).   If you have invested in a TFI, you will be issued with an IT3(s) client statement that disclose the transactional information for the financial year 1 March 2018 to 28 February 2019.  The following fields need to be completed in your return:   Contributions made to a TFI during the year of assessment (source code 4219) Amounts withdrawn out of a TFI during the year of assessment (source code 4248) Net return on Investment – profit (source code 4239) Net return on investment – loss (source code 4240) Interest (source code 4241) Dividends (source code 4242) Capital Gains (source code 4243) Capital Loss (source code 4244)   QUESTION 9: Why does my IT3 certificate not include any expenses or cost incurred on my trading account?   The IT3(B) tax statements are only applicable and issued in instances where income is earned (e.g. interest rental income, dividends, other income etc). In accordance with the South African Revenue Service's ("SARS") requirements, the bank has to report this income (i.e. gross amounts) to SARS on an annual basis. Therefore, tax statements are issued in line with information reported to SARS.   QUESTION 10: Can I claim any expenses or costs reflecting on my account statement against investment income in my Tax Return?   SARS does not automatically allow for interest or other expenses to be claimed as a deduction for tax purposes. The deductibility of interest or other expenses is determined under the Act and any onus of proof resides with the taxpayer. No deductions are allowed for expenditure to produce foreign dividends. Clients are advised to obtain professional tax advice in this regard.     QUESTION 11: What is the base cost of the units disposed of during the year? Can I rely on the information provided in the Report of Gains and Losses?   There are different methods for calculating the base cost of the units in terms of the Eighth Schedule of the Act. The weighted average method of determining the cost/base cost of the assets has been applied and disclosed in the Report of Gains and Losses, based on information available to the broker.   You may however determine the value of your portfolio based on the specific identification or first-in first-out method. To the extent that a method of determining the cost/base cost of assets has been chosen, this method should be used for your entire equity portfolio. It is thus of the utmost importance that you should consult your financial or tax advisor before making the election as it may have a significant effect on your tax position.  Clients are reminded of their responsibility to update or verify information relating to the base cost of the units, with the broker.    QUESTION 12:  What happens to an individual’s Tax-Free Investment (‘TFI’) upon death?   Upon death, the TFI will form part of the deceased estate. The amounts received / accrued to the deceased estate in respect of the TFI are also exempt from tax in terms of Section 12T(2) of the ITA.   QUESTION 13: Where should I disclose any ceded dividend income in my IT12 return?   Ceded dividends received by an individual will retain its nature as a normal / exempt dividend subject to Dividend Tax. Any ceded dividend income will be disclosed, together with other local dividends, in the field “Exempt local and foreign dividends” in the section of the return headed “Amounts considered non-taxable”.  You do not declare the “DWT” that has been paid on your behalf in your return. (Note that ceded dividends that are received by a company is regarded as taxable in terms of section 10(1)(k)(i)(ee) of the Income Tax Act).   QUESTION 14: Where should I disclose any manufactured dividend income in my IT12 return?   As manufactured dividends received are not ‘dividends’ as defined in the Act, these manufactured payments under for e.g. a Contract for Difference (CFD) or Securities Lending Arrangement, are not subject to Dividends Tax in SA. These amounts will be disclosed as ‘Other Income’ on your IT3(B) certificate, constituting taxable income in the hands of a South African investor.    Disclaimer: Please note that SBG Securities Proprietary Limited and The Standard Bank of South Africa Limited do not provide tax advice to clients.  The above does not constitute tax advice and only serves as a guideline. Clients are advised to engage with their own professional advisors with regards to any and all tax matters.      

February was a great month for Resources and in this month's podcast, we take a look at Implats and Amplats performace. We also touch on some of the bigger market news that has impacted retailers, including Multichoice listing, which resulted in Truworths being knocked out of the Top 40. We also turn our attention to topical Aspen, as well as MTN and the banks.   Listen below..       YouTube    

Okay , so maybe this is just grumpy Monday. This is a helicopter view comment. Here we have a holding company with four main legs - one of which appears to be at best in a developmental stage- an emerging/ disruptive tech focussed financial services business/es.(?) But what do we see outcomes wise  - three of the four businesses are actually more likely to call for capital than to return capital to shareholders. Discovery has a  bus crash on its underwriting and it will be cash hungry - and its overpriced, OUtsurance is obviously buying new business with its discounts which carries more threat than benefit in most instances ( and ridiculous advertizing - watch that come crashing down ) - and the fourth leg actually has nothing to return to shareholders... yet? And worst of all - there is no revealing of any plan to capitalise the fourth leg companies so that they actually can earn the shareholders money... the management of this structure seem to move with the speed of stunned slugs when it comes to improving the results for shareholders - and the only place they can do it is in the fourth leg. Alas. No action.   The shareholder returns and share price have been going  sideways for years. So clinging to the fact that outsurance is unlisted and hastings offers a bit of currency hedging I am still left asking - what the heck does this structure exist for? It all has that kind of Remgro look about it "we paid too much and we are just going to read the newspaper until inflation rewards(?) us".  The fact that they ramble on about compound growth is irrelevant. That is not the result of management's hard work.      

What is it about the investing public that encourages promoters of ETF's to simply introduce new variations of these - usually in response to what are seen to be "market trends" - and invariably at the worst of times for investors - this together with the difficulty of being able to ascertain at a glance what these funds NET OF EXPENSES have delivered for you. It drives me crazy when all I see are people standing  up to trumpet on DSTV "we are launching fund X , which fills the gap between ...whatever and what else ...." Cmon! A fund composition or combination thereof is not "an investment solution" per se - unless it represents a solution -as in actually adds value in building a portfolio. What these good people do is to scan the market and say ( not to loudly) "Ok What part of the market does not have an ETF covering it or what  is moving " = our opportunity... QED    Why do these sales driven people do this - I have just given the answer - because they get paid to "COLLECT" AUM ! Of course they have a place - mostly in my mind where one is portfolio rounding to include exposures to markets that move like the US - but price wise and transparency wise they are just about if not more opaque than the active managers. And don't give me this rubbish about "on average half the active managers UNDER PERFORM THE MARKET". Like who doesn't know that? This not revelationary this info?  And who just assumes that their pricing is "worth it" - the OVERALL cost is not a freebie - in fact some of these guys are very expensive. Its not rocket science to seek out and find the above average managers - and if i am investing for the longer term - 5 years they will offer above average returns - as in market beating returns AFTER EXPENSES.     Every bit of performance counts - i know that while I hold an etf - I will underperform the market. ( PS I do hold them - but they really need to up them game on the communication front.)DO HOLD THEM i DO HOLD So lelLIKE hEY oF COURSE aaua think the average investor is an "ejit" Any idtion  iWhat  allowing all"    t ahit acutally   nature of what they eh impenetrable  around a bsic thcontinually think  s'admiiproviders oc

The Auto Share Invest (ASI) and Tax Free Invest functionality has moved to the new Online Banking Site. Below is everything you as an ASI and Tax Free Investment account holder need to know about the new platform.   What is AutoShare Invest?   Auto Share Invest (ASI) is a low–cost online investing platform that gives you the opportunity to buy and/or sell around 200 JSE listed Shares and ETFs on an ad-hoc and/or recurring basis.   The new ASI platform allows you to: Schedule recurring purchases on any trading day of the month allowing you to align your investing with your budget cycle Place Purchase or Sell orders into the market at any time during a JSE trading day Elect whether or not to reinvest residual cash in your investment account along with your next purchase Elect to have the proceeds of Sales paid directly to your bank account or to remain in your trading account to be used to top up your next purchase     How recurring orders work: Select the securities you would like to invest in (R500 for ASI and R250 for TFIA) minimum per selected Security per month, stipulating a Rand amount per instruction Decide whether to automatically add any unused funds in your trading account to top up your order Scheduled orders need to be placed prior to midnight on the day prior to execution Early in the morning of the purchase day, we will collect the required amount from your Standard Bank bank account. Later that day, after the market has opened, we will buy as many units as the amount available allows at the prevailing market price. Your portfolio will automatically update as orders match. You can monitor your portfolio and scheduled/pending/complete/failed orders via the Online Banking platform and the Standard Bank mobile app.   Recurring Scheduled Purchase using any available funds     How buy/sell today orders work     Purchases You may at any point place a purchase order to utilise available funds in your trading account, subject to the minimum trade sizes (ASI – R500; TFIA R250) If there are insufficient funds in your account, you can use the “top up my account” feature to transfer money from your bank account to your trading account If the market is closed at the time that your order is received it will be automatically sent to the market when it next opens Sales You may at any point place a sale order stipulating the number of units held you wish to sell Choose whether to have the proceeds of the sale remain in your investment account (so they me be used for a later purchase) or to have them automatically paid out to your bank account (this will happen 3 business days after the sale). Any unused funds in the account do earn interest. If the market is closed at the time that your order is received it will be automatically sent to the market when it next opens     Once off purchases:  Get the most out of your tax-free investing:   A tax-free investment account** is an invaluable addition to any investor's portfolio. Through it, you're able to take advantage of great tax breaks and use it for your own benefit and to give your loved one a gift that keeps on giving.    The benefits of a Tax Free Investment Account are: No Securities Transfer Tax (STT). No Capital Gains Tax (CGT) when you sell these products. No Dividend Withholding Tax (DWT) on dividends earned. No tax on interest earned.   Key features of the Tax Free Investment Account are: There is a R33 000 annual contribution limit and a R500 000 lifetime contribution limit. Selected Exchange Traded Funds (ETFs) are available. Profits made in the Tax Free Investment Account do not consume existing tax annual limits (interest and capital gains), and may be re-invested in the TFIA without utilising the contribution limit, provided they are not withdrawn. There are penalties for exceeding the annual and/or lifetime contribution limits. It is your responsibility to ensure that your contributions do not exceed the limit imposed by regulations. Exceeding these limits will result in punitive taxation by SARS.   Selling securities in you TFIA (please note that should you elect funds to go into your bank account 'Withdraw money into my nominated account', this will be treated as a withdrawal from your TFIA)       Reinvestment and dividends   All cash (accumulated from distributions, interest, left over from purchases or added to the account by UCount) held in your investment account is placed with the JSE Trustees (Pty) Ltd. and earns interest at the JSET rate, less fees. In order to enable you to harness the power of compound growth we have built a feature to allow your scheduled purchase orders to be automatically topped up with any available cash. If you have multiple orders for the same day the available cash is split in proportion with the value of the orders. This is the easiest way to automatically reinvest your investment income.    As an example, if you own 100 shares of a company and it pays a dividend of R2.50 per share, after the deduction of 20% Dividend Withholding Tax (DWT not applicable in tax free accounts), you will receive a net dividend of 100 * R2 = R200. Additionally, let’s say that you have R38 left over in your account from a past purchase, where you fell short of the required amount needed to buy one more additional share. Thirdly you have redeemed R250 in loyalty points from UCount into your account.   These amounts all attract interest for the period that they are in the account, in this case let’s say that is R5.50   These amounts are all added together:                  R200 (nett dividend) +              R38 (remaining from previous month) +              R250 (UCount points redeemed) +              R5.50 (Interest)              =              R493.50 (total)   If you have elected to top up your next scheduled purchase order of R750 with available funds, the actual order will be for R750 + R493.50 = R1243.50. For more information on how to use UCount points for Tax-free investing, please check out the following post: Earn UCount Points with Standard Bank   The Fee Structure   Transaction Fees   When you invest through ASI you will benefit from our reduced brokerage rate of just 0.25% (excluding statutory charges).   There are three different cost scenarios, namely purchasing shares (ASI), purchasing ETFs (ASI) and purchasing ETFs (Tax Free). Brokerage is charged at 0.25% of the value invested, with no minimums. The tables below gives you an indication of the costs associated purchasing securities.    Statutory fees comprise: Securities Transfer Tax (STT) – 0.25% of trade value, only applicable to the purchase of shares (ETFs exempt) STRATE fees are 0.005787% on the value of the share transaction: The minimum is R10.19 for trades with a value up to R176,000 The maximum is R73.49 for trades with a value over R1,270,000 Investor Protection Levy (IPL) 0.0002% of trade value VAT on Brokerage, STRATE and IPL       Example costs for Share Purchases in ASI   Example costs for ETF Purchases in ASI   Example costs for sales of both Shares and ETFs in ASI   *Statutory Fees Comprise: STRATE fees are 0.005787% per contract note, with a minimum and maximum fee of R9.17 and R80.84 respectively Investor Protection Levy (IPL) 0.0002% of trade value Securities Transfer Tax (STT) – 0.25% of trade value, only applicable to the purchase of shares (ETFs exempt) VAT on Brokerage, STRATE and IPL E xample costs for ETF Purchases in TFIA   E xample costs for ETF Sales in TFIA   Monthly Fees   ASI Accounts have no monthly fees, but do attract a R25 (VAT inclusive) fee for inactivity. If there are no investments in your account for 60 days then the inactivity fee will apply. Tax Free Investment Accounts attract a monthly fee of R10 (VAT inclusive) Cash Withdrawal fees   Withdrawals are charged at R4.56 per single withdrawal to your nominated bank account. If Early Settlement requested, it is charged additionally at 0.25% with a minimum of R39.90 (including VAT)   How to register for a Tax-free or Auto Share Invest Account   1. Log on to Internet Banking and select the “Apply” section     2. Click on “Browse” under “Savings and Investments”     3. The AutoShare Invest and Tax-Free Investment Tiles will be listed in the available options. 4. The “TELL ME MORE” option will provide additional information about the products. 5. Select the “GET ACCOUNT” option to apply for the product under the logged in user.     6. Confirm the details and accept the terms and conditions. 7. The Account opening process will take up to 48 business hours before your account will become accessible in the online banking platform