Stephen Leppan - Talk Money

Gold Reaches Record High

stephen.leppan@liblink.co.za (Stephen Leppan) — Wed, 04 Nov 2009 15:36:00 +0000

Gold reached a record high today and traded at $1093 per fine ounce in London.

My studio guest today, was Alan Demby the Chairman of the SA Gold Coin Exchange. The last time I spoke to Alan Gold had just broken through the $1000 mark.

Alan pointed out that investors should consider physical gold in their portfolios. He recommends that one should hold about 10% in physical gold. You can do this by buying Kruger Rands or Collectible Gold Coins such as Mandella Coins, Fifa 2010 and etc.

The Gold Coin Exchange has a national network of Scoin Shops which make investing in gold very easy, there is one in The Somerset Mall.

Transfering Property Out of Trusts and Companies

stephen.leppan@liblink.co.za (Stephen Leppan) — Thu, 29 Oct 2009 15:27:00 +0000

Yesterday, my studio guest was Paul Clark, a leading property law attorney. He discussed all the issues around transferring your property out of trusts and companies to take advantage of the SARS offer of no Capital Gains and Transfer Duties.

There are many technical issues in taking up this offer from SARS and the run down is available free of charge from Paul Clark's website: http://www.paulclarkattorneys.co.za/ you will also find Paul Clark's contact details on his website.

All the major changes in Minister Pravin Gordhan's Medium-Term Budget Policy Statement 2009

stephen.leppan@liblink.co.za (Stephen Leppan) — Tue, 27 Oct 2009 14:45:00 +0000

Exchange controls and associated red tape to be relaxed. Limit for individuals raised to R4m.
Growth of 1.5% expected for South Africa in 2010, rising to 3.2% in 2012.
Creating jobs, particularly among millions of relatively unskilled South Africans, is the country's greatest economic challenge.
Nearly half a million South Africans have been retrenched over the past year and Unemployment Insurance Fund claims doubled in the year to April 09.
Government considers establishing an industrial development and job creation fund.
More than 13m people now receive social grants.
By March 2010, 900 000 people will be receiving antiretroviral treatment.
National Treasury and the Reserve Bank to focus on low inflation and a more stable and competitive real exchange rate.
Tax revenue is down sharply as a result of the recession.
Sars to increase penalties on non-payers to ensure "fairness".
Policy aims to encourage a recovery without burdening future generations with unsustainable debt
Mining displayed the first signs of recovery, with production rising strongly in the six months to August.
Lower interest rates and falling inflation are expected over the period ahead.
Eskom tariff increases will be required to align the price of electricity with the cost of generation.
The current-account deficit is projected to increase to 5.7% in 2010.
Government needs other forms of revenue. Proposals include broadening the tax base, improving tax compliance and the introduction of new taxes.
South Africa is falling short of its commitments by failing to meet the "legitimate" service expectations of its people.
Departments need to reduce expenditure on low-priority and non-essential items. Total net savings of R14.5bn at national level and R12.6bn at provincial level have been identified over three years for prioritisation.
Cost cutting examples include catering, communication, consultants, inventory, stationery and printing, travel and subsistence, accommodation and entertainment.
An additional 22 500 police personnel to be recruited by 2012/13. Special investigators for priority crime to increase from 350 to 2 400 in same period

South African Reserve Bank Repo Rate Decision 22/10/2009

stephen.leppan@liblink.co.za (Stephen Leppan) — Thu, 22 Oct 2009 13:31:00 +0000

Issued by Mr T T Mboweni, Governor of the South African Reserve Bank

1. Introduction

1.1 The prospects for inflation returning to within the inflation target range by the second quarter of 2010 remain promising. Domestic demand conditions continue to be subdued and currently do not pose a significant threat to the inflation outlook. Economic growth is expected to improve in the coming months, but is likely to remain below potential for some time. Domestic growth prospects are dependent to an extent on the global recovery which appears to be uneven across countries and regions. However the medium-term inflation outlook has been affected adversely by possible further significant adjustments to electricity tariffs.

2. Recent developments in inflation

2.1 There has been no publication of consumer price index (CPI) data since the previous meeting of the Monetary Policy Committee (MPC). The most recent data showed that the year-on-year inflation rate as measured by the CPI for all urban areas declined to 6,4 per cent in August, compared with 6,7 per cent in July. The main contributors to the inflation outcome were the categories of housing and utilities, and miscellaneous goods and services.

2.2 Producer prices declined at a year-on-year rate of 4,0 per cent in August, compared with a decline of 3,8 per cent in July. Food price inflation at the producer price level continues to signal dissipating pressures on food prices at the consumer price level. Agricultural product prices declined at a year-on-year rate of 2,0 per cent while manufactured food product prices increased at a rate of 0,1 per cent. Upside pressure on producer prices came from electricity prices which increased by 28,6 per cent.

3. The outlook for inflation

3.1 The CPI inflation forecast by the South African Reserve Bank staff continues to indicate that inflation is likely to return to within the inflation target range, on a sustained basis, by the second quarter of 2010. CPI inflation is then expected to stay within the inflation target range for the rest of the forecast period until the end of 2011. Compared with the previous forecast, the outlook showed a slight improvement for 2010 and 2011, mainly as a result of the changed assumption regarding the rand exchange rate. No adjustment has been made at this stage to the central forecast for possible further increases in electricity tariffs over and above those that are already assumed in the baseline forecast.

3.2 A number of domestic and global factors have contributed to the persistent downward pressure on inflation. The global economy shows continued signs of improvement, but the recovery is not uniform across regions. The pace of recovery of most of the Asian economies has been higher than that achieved in the main industrialised economies. The timing and speed of the withdrawal of the fiscal and monetary policy stimuli may have a bearing on the nature of the recovery in these economies. Global inflation is expected to be constrained by the relatively weak demand from the industrialised countries, although the US dollar movements may provide some upward pressure to commodity prices.

3.3 There are some positive indications that the rate of contraction of the domestic economy has declined and that the economy may emerge from the recession by the end of 2009. However, the mixed picture from the published data shows that the recovery is likely to be tentative, and the output gap is likely to remain positive for some time. The physical volume of manufacturing output declined at a year-on-year rate of 15,0 per cent in August, and by 2,8 per cent on a month-on-month basis. However, in the three months to August, compared with the previous three months, an increase of 0,8 per cent was recorded. The Kagiso/BER Purchasing Managers Index (PMI) increased markedly from 39,3 index points in August to 48,0 index points in September. The index shows that new sales orders have increased significantly, while manufacturers’ expectations of business conditions six months ahead improved to the highest level since early 2007.

3.4 Other sectoral developments indicate that the physical volume of total mining production increased in the three months to August but contracted on a month-on-month basis, whilst the real value of building plans passed continued to decline. The RMB/BER Business Confidence Indicator (BCI) declined to a ten-year low in the third quarter of 2009. The tentative nature of the domestic recovery is also reflected in the composite leading business cycle indicator compiled by the South African Reserve Bank which declined marginally in July, following three consecutive monthly increases.

3.5 Consumption expenditure by households also remains subdued, with real retail trade sales declining at a year-on-year rate of 7,0 per cent in August. In the three months to August, there was a 1,0 per cent decline, compared with the previous three months. Wholesale trade sales also declined further in August. Total new vehicle sales are also well below their levels of a year ago. However there are indications that the negative trend may have reached its lower turning point with zero or slightly positive rates of change being recorded on a month-on-month and quarter-on-quarter basis. The FNB/BER consumer confidence index declined in the third quarter of 2009 to a relatively neutral confidence level.3.6 Credit extension to the private sector continued to reflect both the weak household consumption expenditure and the prevailing tighter credit criteria. The Ernst and Young financial services index indicates that credit standards applied by retail banks to loan applications continued to tighten in the third quarter of 2009 but at significantly lower levels. Twelve-month growth in banks’ total loans and advances declined to 0,8 per cent in August 2009. Mortgage advances increased by 5,6 per cent in August, while instalment sale credit and leasing finance contracted by 4,2 per cent. Negative year-on-year growth rates were also recorded in credit card advances, bank overdrafts and general loans.3.7 There has been some recovery in asset prices in recent months, but wealth effects do not appear to be posing an immediate threat to the inflation outlook. Domestic equity prices have increased markedly since March, but are still significantly below the levels reached in May 2008. The various house price indices indicate a moderation in the rate of decline in house prices.

3.8 The exchange rate of the rand continues to provide downside pressure on inflation and is currently trading at levels against the US dollar similar to those prevailing at the time of the previous MPC meeting. During the past month the rand traded in a range of around R7,20 and R7,79 against the US dollar. The exchange rate of the rand has appreciated by 28 per cent against the US dollar since the beginning of 2009 and by 20 per cent on a trade-weighted basis.

3.9 The international oil price has increased in the past week but does not pose an immediate threat to the inflation outlook. Having averaged around US$70 per barrel for a number of weeks, the price of North Sea Brent crude oil increased to current levels of around US$76 per barrel, mainly as a result of the weaker US dollar and improved global growth prospects. In October, the domestic price of 95 octane petrol was reduced by 40 cents per litre as a result of both lower product prices and an appreciated rand exchange rate.

3.10 The main risks to the inflation outlook emanate from cost pressures in the economy. The trend of wage settlements still poses an upside risk to the inflation outlook. However there appears to be some evidence that nominal wage increases are moderating, although increases have generally been above the inflation rate. According to Andrew Levy Employment Publications, the average level of wage settlements amounted to 9,4 per cent in the first nine months of 2009 compared with 9,6 per cent in the corresponding period of 2008. These increases are consistent with the Quarterly Employment Survey (QES) of Statistics South Africa, which reported that growth in average nominal remuneration per worker in the formal non-agricultural sector of the economy moderated from 11,5 per cent in the first quarter of 2009 to 8,7 per cent in the second quarter. Unit labour cost increases declined from 11,3 per cent in the first quarter to 9,3 per cent in the second quarter.3.11 The substantial electricity tariff increases requested by Eskom are seen to be the main longer-term threat to the inflation outlook. Eskom has requested a trebling of the current electricity tariffs over the next three years, and the National Energy Regulator of South Africa (NERSA) is expected to make a decision in February 2010.

4. Monetary policy stance

4.1 The Monetary Policy Committee is of the view that overall the risks to the inflation outlook have not changed markedly since the previous meeting. Accordingly the Monetary Policy Committee has decided to leave the repurchase rate unchanged at 7,0 per cent per annum. The MPC will continue to monitor economic and financial developments and will not hesitate to adjust the monetary policy stance should the risks to the inflation outlook change materially.

News On The Local Property Front

stephen.leppan@liblink.co.za (Stephen Leppan) — Wed, 21 Oct 2009 18:47:00 +0000

Today, my studio guest was Ronell Beresford who is a leading bond consultant with over 20 years experience.

Ronell gave us this update of what is happening on the local property market:

The Property and Financial Market

If we look at The 3rd quarter, Cape Metro FNB Residential Property Barometer, it's pointed to significant jump in activity levels in the region, after a very weak 2nd quarter level.
This suggests that the region is beginning to feel the positive impact of the series of int. rate cuts that took place in the 1st half of 2009.
The estimate percentage of properties sold at below asking price, shows a significant decline from91% in the 2nd quarter to 83% in the 3rd quarter.
The average time of a property on the market prior to it being sold, declined sharply from 22 weeks in the 2nd quarter of this year to 16 weeks in the 3rd quarter.
People selling to 'down scale' due to financial pressure, has declined significantly from average 36%in the 2nd quarter to 25% in the 3rd.
Simultaneously, selling in 'order to upgrade', jumped from 9% of the total selling, to 17% over the same period.
Average selling prices of the Cape Metro area as a whole, is plus/minus R885 000.
The market improvement is largely the result of (1) int. rate cuts and (2) the banks' responses to better market conditions by relaxing their lending criteria.
2 of the 4 Large banks are looking at granting home loans of u to 100%, whilst previously (especially during the 1st half of the year), they were granting on average between 70% - 80% of the selling price.
We must however take into account that banks are more so starting to rely on built-in credit scoring systems for the assessment of their home loan applications. This essentially means that customers behavior in terms of the way in which they conduct their accounts or credit, are seriously being taken into account when looking at granting them a new or further home loan.
Further interest rate discount negotiations with the banks on behalf of new home loan applicants,have become difficult and rates below 1% less than prime of 10, 5% is almost non-existent.
The improvement of the market has not only been seen in volume of transactions and diminishing price deflation, but also in an improvement in credit quality. According to the banks, their home loan arrears numbers have been improving since the beginning of the year.
Good news is that it looks like the economy is expected to provide more support for the market, as we emerge from recession.

Buy to Let?

stephen.leppan@liblink.co.za (Stephen Leppan) — Tue, 20 Oct 2009 16:38:00 +0000

Should I keep or sell my rental property?

Today, I saw a client who wanted some advice in keeping or selling her rental property and investing the proceeds. The property is worth R830k, the outstanding bond is R300k, she has spent R20k this year maintaining the property and the rental income is R4000 p/m.

She has problems with the tenants and often needs to pay in to cover the outstanding bond which she cannot afford.

If the property was sold she would have +/-R500k to invest. A well structured invested could easily outperform the yield of this rental property and she would be free of all the headaches of this property.

Rental properties yield around 3-6%.

In my opinion buying your own home is a good investment but buying to let is not a good investment in South Africa. The cost of capital, problems with tenants, agency commissions and high taxes all make the "buy to let" investment very unattractive.

What do you think?

Residential Property Looks Bright?

stephen.leppan@liblink.co.za (Stephen Leppan) — Mon, 19 Oct 2009 17:33:00 +0000

There is a lot of press around lately about signs of SA residential property showing improvement . A leading banker stated he sees "light at the end of tunnel with no train insight". Certainly things have started to improve and many bankers do expect a dramatic turn around early 2010.

Falling property prices, lower interest rates and most importantly relaxed lending criteria have all contributed to this. Standard Bank now offers 100% home loans and Absa Bank 95%.

However, the South African consumer is still suffering the aftershock of the credit crunch. The Eskom power crisis with expected electricity tariffs increasing by 45% year on year is sure to dampen the mood of South Africans in 2010.

To find out what is actually happening on the local property front I will be speaking to Ronell Beredford on Wednesday at 17:15 pm.

Make Sure Your Portfolio Has Offshore Exposure

stephen.leppan@liblink.co.za (Stephen Leppan) — Thu, 15 Oct 2009 16:08:00 +0000

Unit trusts are an excellent means to provide South Africans with the option to invest offshore. A well structured investment portfolio should have offshore exposure as this provides earnings in world currencies and provides a hedge against Rand depreciation.

The SARB (Reserve Bank) is very concerned about the current strength of the Rand and it could use it's power by hiking the repo rate in an attempt to weaken our currency. The Rand has appreciated around 30% against the US $ this year and is one of the best performing currencies against the green back worldwide.

I have a feeling that the Reserve Bank may start to hike the Repo rate in 2010. This, with the loom of the nations power crisis is certain to drive inflation upwards in the year to come.

This is an excellent time to start moving money offshore. You can invest offshore directly by making use of your offshore allowance, which requires SARS Tax Clearance Certificate and Reserve Bank Clearance.

A simpler method to get offshore exposure is to invest in one of the many Rand denominated unit trusts. This requires no approval nor does it affect one's offshore allowance. An ideal investment for small and large investors alike.

There are a wide range of offshore unit trusts available across all the major currencies.

Speak to me to now to make sure you take advantage of the current strong Rand before it starts depreciating.

Time Horizion

stephen.leppan@liblink.co.za (Stephen Leppan) — Tue, 13 Oct 2009 17:20:00 +0000

Today on Talk Money, I highlighted the importance of selecting correct investments based on Time Horizons. I often come across clients that miss out on better portfolio returns because they are risk adverse or poorly advised. Many people think that keeping all their money in cash or similar investments is a safe option. Over the long term this is more risky as the value of cash is eroded by inflation and tax. This is often a serious problem for many retired investors in particular who rely on the interest.

These top performing Unit Trusts give an example of the importance of considering the time horizon when investing:

1. Stanlib Property Income Fund: 1 year: 29% 3 years: 60% 5 years: 193%
2. Coronation Top 20 Fund: 1 year: 43% 3 years: 49% 5 years: 208%

When making investments one should consider a 3 - 5 year horizon. It is highly unlikely that a well managed fund will have negative returns during this time period. Another factor to consider is that these investments will pay dividends which can be re-invested or provide a tax free income stream.

If you would like to start an investment portfolio or would like me to review your investments drop me a line or give me a call.

Gold, Platinum and Sweet Crude Oil Futures Trade on The JSE

stephen.leppan@liblink.co.za (Stephen Leppan) — Mon, 12 Oct 2009 15:27:00 +0000

Gold, Platinum and Sweet Crude Oil Futures on JSE

South African investors can now take advantage of price movements of Gold, Platinum and Sweet Crude Oil futures contracts for the 1st time in ZAR on the JSE's commodities derivatives market. Up to now only agricultural commodities have been offered on the commodities exchange.

Rod Gravelet-Blondin, Head of the Commodities Division at the JSE said that "The Exchange is confident that trading will gain traction as more and more investors realise that they can trade these highly traded commodities in an easy and more affordable manner"

If investors wanted to trade in these commodities they would have to trade contracts on international markets making use of their foreign exchange allowance subject to exchange control regulations.

In future individuals and corporations will have easy access trading these commodities on the JSE which will open up this market to local investors to take advantage of the current interest in these commodities as alternative hedging or diversification instruments.

Pension funds and long-term insurance companies are however, subject to their 20% foreign allocation limits and asset managers and registered collective investment schemes are subject to their 30% foreign allocation limits when trading these commodities, the JSE said. In terms of a recent agreement signed with the world's largest derivatives marketplace, CME Group, the locally listed contracts will be cash-settled using benchmark gold settlement prices referenced from CME's COMEX division and platinum and crude oil prices from its NYMEX division. Given that the underlying instrument is a contract traded on the NYMEX or COMEX, investors have the added advantage of accessing highly liquid international markets via these Rand-denominated contracts. "The 2 metal commodities should interest local investors as South Africa is the world's largest platinum producer and the 3rd-largest gold producer. The price of the commodities is generally linked to the prices of mining stocks. The liquidity that the current market makers and any new ones will bring to the market can only be beneficial to investors," said Ashley Erasmus, Senior Commodities Trader at Nedbank Capital. Standard Bank and Rand Merchant Bank will also be quoting live Rand prices for investors. To make these contracts more attractive to individual investors, the JSE has made the contracts based on smaller lot sizes than those traded on the US markets. "We have taken accessibility into account, for instance the minimum contract size for crude oil on our market is 100 US barrels (15898.73 litres) with contracts expiring in Feb, June, August and December, while in New York the contract minimum is 1000 barrels," explained Gravelet-Blondin. For both gold and platinum, each contract size equates to 10 troy ounces with the minimum price movement set at 100 South African cents per ounce. The gold contract expiry months are April, June, August and December with a minimum of 2 expires always available for trade. The contract for platinum expires in January, April, July and October with a minimum of 2 expires always available for trade. "We are particularly excited about the opportunities that a crude oil contract offers. Oil has a knock-on effect

Good News Friday

stephen.leppan@liblink.co.za (Stephen Leppan) — Fri, 09 Oct 2009 16:07:00 +0000

This week's good news is The Executive Confidence Index leaped by 67%, the Rands performance has helped reduce the nation's debt costs,this has boosted our nation's ability to repay it's debt and then of course since the 7th October the price of petrol decreased at the pumps which is good news for consumers and will continue to ease food prices.

Gianni Smith, National Sales Manager of ZeWine announced this weeks winner who is Mr. Loubser for leaving a comment under the gold post. Congratulations you will be receiving your gift voucher with compliments of ZeWine Club, Proud Sponsors of "Good News Friday" on Talk Money, 93.6 FM

Gold almost hitting $1060 per ounce

stephen.leppan@liblink.co.za (Stephen Leppan) — Thu, 08 Oct 2009 19:54:00 +0000

As the Gold Bull rages on...I found this quote by Warren Buffet which I found amusing: "Gold gets dug out of the ground in Africa, or someplace. Then we melt it down, dig another hole, bury it again and pay people to stand around guarding it. It has no utility. Anyone watching from Mars would be scratching their head." Well Warren we are all scratching our heads now lol!

Unit Trusts or Invest Directly?

stephen.leppan@liblink.co.za (Stephen Leppan) — Thu, 08 Oct 2009 14:55:00 +0000

Yesterday’s studio guest was Cheslyn Francis BA, RPE, MBA. He is a portfolio manager and head of Private Clients at Dynamic Wealth a leading asset management company.

I asked Cheslyn his view on clients investing directly in the JSE

The reason that most people don’t invest directly is two fold. Firstly an investor needs sufficient capital to be able to buy a few shares in different sectors of the market and to be able to justify the costs of a stock broking account. The second reason people tend not to invest directly into the market is a matter of competence and fear of the unknown.

This is where the unit trust industry found its niche. It offered the layman an investment vehicle that employs a portfolio manager to manage selected securities held in trust. The purpose of Unit trusts was to open up investing on the JSE to the smaller investors, who would normally not have had enough capital on hand to do so. Unit Trusts allow investors to access the JSE with small contributions from as little as R50 p/m.

Investors with larger sums of money from R100 000 plus should consider investing into the JSE by setting up a stock broking account and appointing a portfolio manager to manage their portfolio.

His view is that there is still value in equities depending on an individuals risk profile. I will be talking to Cheslyn regularly in the future for deeper insights and views on the JSE.
If you have over R100 000 and would like to start an actively managed share portfolio contact me and I will arrange this for you.

Risk Factors To Consider When Investing in Unit Trusts

stephen.leppan@liblink.co.za (Stephen Leppan) — Wed, 07 Oct 2009 14:28:00 +0000

Out of the 700 unit trusts available only a handful of them have managed to beat the ALSI index. So, how can you be sure that you are invested in the right funds?

The first point in selecting investments is to consider your personal Risk factors such as:

1. Time Horizon

Rule of thumb:

Short Term Investments: Cash, Fixed Deposits and Money Market Funds
Medium Term Investments: Equities, Bonds and Above
Long Term Investments: Equities and Property

2. Asset Classes

All assets have various degrees of risk attached to them. Generally equities are considered to be the most risky, whereas cash is considered as least risky. However, lower risk investments hardly out perform inflation that erodes the value over time.

Equities and Property are the best performing asset classes over the long term and historically have out performed cash and bonds. I will post the returns of cash,bonds, equities and property in a future post.

3. Diversification

Investing across the asset classes spreads risk. It is highly unlikely that all four asset classes will have negative returns at any given time. Just like my Grandmother always used to say “never put all your eggs in one basket”.

Therefore one should never be fully invested in a single asset class. To reduce risk a balanced portfolio invested in all the asset classes is a good investment strategy that reduces risk.

4. Fund Managers

A recent study found that larger fund management companies outperformed smaller asset manager companies in South Africa. This is because larger companies have far more resources at hand than smaller ones. So, when choosing an investment you are better off selecting larger asset managers than smaller ones.

Another good risk strategy is to consider investing in more than one management company, as every fund manager has a different style. Again, a good strategy would be to invest in different fund managers. Asset manager companies launched Multi Manger Unit Trusts to give investors exposure to other managers. The down side though is these funds cost a lot more to administrate, in my view it is better to select a basket of unit trusts.

This weeks line up

stephen.leppan@liblink.co.za (Stephen Leppan) — Mon, 05 Oct 2009 15:20:00 +0000

There are over 700 unit trusts in South Africa and only 413 companies listed on the JSE. Unit Trusts are a massive industry in SA with billions of rand invested in them. However, only a handful of Unit Trust's in SA manage to out preform their indexes.

With such a huge choice of Unit Trusts and only a few performing well out there, how can you be sure that you are invested in the right funds?

This week we will be discussing the unit trust industry in SA and how you can be sure of your investment decisions.

Ze Wine Club sponsors "Good News Fridays"

stephen.leppan@liblink.co.za (Stephen Leppan) — Fri, 02 Oct 2009 17:09:00 +0000

Ze-Wine Club spices up Talk Money Slot

In the studio with me today Gianni Smith (right) the National Sales Manager of Ze Wine Club, announced this weeks winner Mr. P.Wills from the Strand! Congratulations Mr.Wills and good luck for the this month's grand draw. All you have do is leave a comment on any post or ask a question and you too could be next Friday's winner!

Loss of Income Insurance

stephen.leppan@liblink.co.za (Stephen Leppan) — Wed, 30 Sep 2009 17:13:00 +0000

On Talk Money this afternoon we continued the discussion of life assurance. Today we covered Loss of Income Insurance in the case one losing the ability to earn an income.

Statistically, one has more chance of being disabled due to an accident, stroke, heart attack or cancer than dying between age 18 - 55. Lately cancer seems to be on the rise and many young people are being diagnosed with life threatening diseases.

The sad thing is, when this happens there is a huge impact on one's family. Besides the emotional stress, being disabled leaves a huge financial strain on a family. There are a few employers who will assist for a month or two, but then the disabled employees are left out in the cold.

What would happen to you if a sudden traumatic event had to happen tomorrow?

Would you have enough income to cover your bond, hp's, school fees and etc? What about the huge medical expenses that one would be burdened with? Income Protection Insurance is not a luxury, it is a necessity and premuims are very reasonable. Have peace of mind and make sure you get income protection assurance today. Contact me now and I will arrange a quote for you.

Life Cover

stephen.leppan@liblink.co.za (Stephen Leppan) — Tue, 29 Sep 2009 14:26:00 +0000

Life Cover is there to provide your family with cash on your death. This cash replaces your income and can help your family to maintain the household's financial obligations - like paying the bond, car, education and living expenses. To appreciate the need for life cover one needs to ask the following question: If you died today, would your loved ones cope financially?

Would they be able to pay for your final expenses like funeral costs, medical bills, taxes, debt, legal fees and etc?

Would they be able to continue with their lifestyles and survive without your income?

It's always hard to loose someone you love. But your loved ones don't deserve to be left financially burdened by your loss. Life Cover insures that your loved ones are left cared for if you should die.

Life Insurance covers the risk of dying and the financial impact this event will have on your surviving family.

This Weeks Line Up...

stephen.leppan@liblink.co.za (Stephen Leppan) — Mon, 28 Sep 2009 15:21:00 +0000

Today, is my big 40 they say life begins at 40? I hope that's true and not just to make one feel better as one crosses over into midlife :-) What do you think?

This week on Talk Money we will be covering Life Insurance and the different types of insurance used to cover ones risks through life.

Then "Good News" Friday is now sponsored by Ze-Wine Club! Every Friday Ze-Wine Club will be giving a lucky Talk Money Listener a weekly prize. Last week Johann was our winner by default. Weekly winners will be entered into the Grand Draw which takes place on the last Friday of the each month.To enter all you have to do leave a comment with your name and you could be our lucky winner.

Rand / Dollar 25 Year Trend

stephen.leppan@liblink.co.za (Stephen Leppan) — Mon, 28 Sep 2009 14:43:00 +0000

The chart above represents the 25 year trend of the Rand / Dollar Exchange Rate. From the end 1987 the Rand has depreciated steadily against the US. The sudden strengthing in the Rand was brought about by the global credit crunch and I think the long term trend will continue. It is a very good time to take your Rands offshore.

Yellow Capital Interview

stephen.leppan@liblink.co.za (Stephen Leppan) — Wed, 23 Sep 2009 16:36:00 +0000

This afternoon I interviewed Haydn Ellwood of Yellow Capital, London UK.

UK property is a very attractive option to high net worth South Africans, in particular those sitting on cash in Isle of Man or Guernsey Bank Accounts earning no interest.

The UK property sector has fallen about 27% since it's high around 18 months ago and the property sector has since stabilized and has started to show signs of recovery. Interest rates being low at around 4 % and loosening up of capital markets start to benefit property buyers.

The Buy to Let market is extremely attractive in the UK because interest rates are so low and property rentals are in high demand. Investors could yield attrative income yields between 6-8% with escelations at 5%. Then in the next 3 - 5 years property prices in the UK could regain about 27% value.

A few years ago UK property was out of reach for most South Africans, but now with the strong Rand, the use of the 2 million allowance and gearing, South Africans can build a solid income stream in GBP and have an appreciating asset offshore.

Never before has it been so lucrative to invest in UK property. To book an appointment with Haydn Ellwood e-mail him at haydn@yellowcapital.co.uk

Liberty International Raises GDB 280.5 Million

stephen.leppan@liblink.co.za (Stephen Leppan) — Wed, 23 Sep 2009 16:12:00 +0000

LIBERTY INTERNATIONAL PLC
(Registration number UK3685527)

Liberty International PLC ("Liberty International" or the "Company") announces that it has raised GBP280.5 million before commissions and expenses from the Placing completed today of 56,100,000 new ordinary shares at a price of 500 pence per share (the "Placing Price"). The Placing represents in aggregate 9.9 per cent of the issued share capital of Liberty International prior to the Placing. Merrill Lynch International ("Merrill Lynch") acted as sole bookrunner in relation to the Placing.

South African Repo Rate 22/09/2009

stephen.leppan@liblink.co.za (Stephen Leppan) — Tue, 22 Sep 2009 13:20:00 +0000

The South African Reserve Bank Commitee has just announced the expected decision to leave the Repo unchanged at 7%

Latest South African CPI Figures Released 22 September 2009

stephen.leppan@liblink.co.za (Stephen Leppan) — Tue, 22 Sep 2009 11:21:00 +0000

The CPI figures released this morning could influence the MPC's decision. The increase in South Africa's consumer price index (CPI), which is used by the South African Reserve Bank for its inflation target, was up 6.4% year-on-year in August from 6.7% y/y in July, Statistics South Africa said earlier. CPI was up 0.3% month-on-month after increasing 1.1% in July

Barefooted Shareholder Exposes SA Reserve Bank Govener Tito Mboweni Earnings

stephen.leppan@liblink.co.za (Stephen Leppan) — Mon, 21 Sep 2009 14:50:00 +0000

South African Reserve Bank Govener Tito Mboweni

A barefooted and irate South African Reserve Bank Shareholder, Mario Prestorius arrived to attend the SARB annual general meeting to raise his concerns about the outragous earnings of South Africa's Reserve Bank Minister.

Whom according to his open letter below is the "3rd highest paid central Bank official in the world", earning 3 times more than, by comparison, Mr Ben Bernanke at the New York Federal Reserve in the USA.

Here is Mario Prestorius's open letter to South Africa's Reserve Bank Minister, Tito Mboweni:

Dear Mr Governor,

I am Mario Pretorius, a shareholder in the SARB.

According to the SARB Regulations, you must chair the annual General Meeting of the shareholders. It is our meeting where we want to be heard and would like to transact what we are entitled to.

At the 89th meeting last Thursday you insisted on a vote before the Annual Financial Statements could be discussed. You promised that there will be an opportunity to pose concerns and questions in the meeting but you most conveniently did not recognise me and most conveniently closed the meeting for your lunch.

I hereby pose my questions and the motions in this open letter to you with the request that they be answered as proof of the King2 corporate governance that the SARB claims to follow without us shareholders having seen any accountability, transparency, inclusiveness or responsibility of the SARB Board to shareholders. In the words of King2 we shareholders ‘were worried about the excessive concentration of power in the hands of management' (Clause 9, Introduction), and nothing we have seen in the last three meetings has shown any movement of the Board or the Chairman of the Meeting away from "the sins of sloth and fear, with an erosion of enterprise and an encouragement of subservience' (ditto)

To the Chairman of the Remuneration Committee

For the record:

How does your committee justify the 14% raise in remuneration of the Governor, cost to company, to R4,334m per annum in the light of the following 7 factors:

1. There is a world-wide sensitivity to excessive remuneration of banking officials;
2. The Bank's profit has dropped by 61% this year and the Governor has received a 42% pay rise for the last 2 years;
3. The Governor is already the 3rd highest paid central Bank official in the world, earning 3 times more than, by comparison, Mr Ben Bernanke at the New York Federal Reserve in the USA;
4. The Governor earns 2,5 times more than his counterpart in Treasury, the Minister of Finance and more that the President
5. The Governor has publicly stated that salaries should not exceed 7% increases;
6. The Governors remuneration is now 21 times more than the total dividends paid to shareholders
7. The Governor having a permanent seat on the Remuneration Committee and the consequent influence, contrary to the recommendations of King2 which the Bank has committed itself to.

Please explain why the Bank has abandoned the principle "That fairness is integral to its judgement and actions' in its Business Philosophy in this year's Annual Report and please highlight how the abandonment of this philosophy has and will impact on the actions of the SARB in light of King2

(some points where removed due to space)