Jonathan Moodie, director of Hilton-based financial advice practice Wealth Manager and twice a finalist in the prestigious Financial Planner of the Year awards for South Africa, has been acknowledged by Old Mutual Wealth’s Tailored Funds Portfolio management for bringing the Centre for Fiduciary Excellence (CEFEX) standards to South Africa. These funds, utilised by Wealth Manager, were audited and subsequently certified on February 22 in Pittsburgh, US. The annual certification process involves financial performance and operational data verification, followed by on-site interviews with key personnel.
The CEFEX certification provides investors and their investment advisors with additional proof of their investment firm’s integrity, while allowing investment firms to show investors that their trust is warranted. According to Moodie, the benefit for an investor is that it vertically integrates the financial planning practices with the activities of portfolio managers and greatly reduces the risk of failed investments due to the strict due diligence and manager research. “In practice, it results in improved investment outcomes and also lowers costs. It has also created an exciting partnership between a CEFEX-accredited discretionary fund manager in tailored fund portfolios, and an accredited investment fiduciary in Wealth Manager,” he said.
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ILLEGAL OIL SALE INVESTIGATIONS HEADING FOR A CLOSE
Once investigations into the illegal disposal of strategic crude oil stock wrap up, there will be consequences for those implicated, members of parliament have heard. The portfolio committee on energy yesterday was briefed on the annual report of the Central Energy Fund and its subsidiaries, which include national oil company PetroSA and the Strategic Fuel Fund (SFF). The CEF had filed a court application in 2018 with the Western Cape High Court to set aside the sale on the grounds that the disposal was unlawful, invalid and unconstitutional. If the court rules in favour of the CEF, then the SFF will have to repay the proceeds of the transaction, storage income received from buyers from the date of transfer, as well as interest earned and other associated costs, the CEF group said. "The estimated total amount repayable at March 31, 2018 is R3.7 billion, based on the prevailing foreign exchange rate between the rand and the $US," the report from the CEF read. (Fin24)
VISA APPLICATION CENTRE IN THE SPOTLIGHT
Parliament's home affairs portfolio committee has called on home affairs minister Siyabonga Cwele to review the department’s contract with VFS global. VFS Global manages visa application centres on behalf of the department. The appointment of VFS to act as the front-end administrative function for the department came into effect on June 20, 2014. The home affairs minister at the time said the appointment of VFS would help speed up functions and make the department more efficient. But critics are questioning the fees it charges that should be free, they claim. The committee criticised the department for its decision to grant VFS Global a two-year extension, saying it is in violation of the Public Finance Management Act and National Treasury regulations on procurement within competitive bidding processes. (BDLive)
GROUP FIVE IN BUSINESS RESCUE
Group Five says it has filed for business rescue — a process aimed at rehabilitating financially distressed companies — because lenders have not been willing to give it more funding. The contractor and a number of its peers, including Basil Read and Erbacon, have succumbed to a depressed construction market in which major projects have failed to materialise owing to the state’s strained finances. Group Five, whose shares were at R45 about five years ago, said yesterday it had asked the JSE to suspend trading in its stock, which was priced at 89c at Monday's close. At the end of June 2018, Group Five had 7 394 employees, with 4 744 of those in SA. Some of the firm's major projects included the widening of the Durban Harbour in 2010 and construction of King Shaka International Airport. (BDLive)
LOSS OF TRAIN COACHES RUNS INTO MILLIONS
The total financial loss of train coaches from April 2018 due to aging stock, vandalism, theft and derailment amounted to more than R630 million, transport minister Blade Nzimande said. A total of 127 Metrorail coaches were lost due to vandalism, including theft. A total of 262 coaches were lost due to derailments and accidents, and 550 were lost due to theft. The value of the losses amounted to more than R624 million, he said. A total of 613 Shosholoza Meyl coaches were lost due to ageing. Five locomotives and 24 coaches were lost due to vandalism, including theft, while nine coaches were lost due to derailments and accidents, Nzimande said. The value of the losses amounted to over R11.6 million. (Fin24)
MATURING EMPOWERMENT SEES DROP IN BLACK SHARE OF BANKS
Black ownership in banks dropped from 34.8% to 30.5% between 2016 and 2017, but still exceeded the target of 25% in terms of the Financial Sector Code (FSC). Black economic interest also fell as several empowerment deals matured and black investors exited their investments. These are some of the findings of the 2019 Transformation in Banking report, which was commissioned by the Banking Association of South Africa (Basa) and compiled by Intellidex. The research firm estimates that banking sector black empowerment deals had generated R57 billion in net value for the beneficiaries of bank empowerment schemes by the end of 2015. “So this sort of rhetoric that goes around that there has been no value creation for black investors is quite honestly just not true,” says Cas Coovadia, managing director of Basa. (Moneyweb)
DIGITISATION TO CRIMP FIRSTRAND BRANCH NETWORK
FirstRand will likely need to shrink its branch network over the next decade as South Africa's largest retail bank looks to digitise and adopt a platform model offering services beyond banking, CEO Alan Pullinger said yesterday. The country's oldest bank dating back to 1838 reported a 6.1% rise in half-year headline earnings yesterday, outperforming rivals in retail banking but with costs that are rising above inflation. Its branch network would likely need to be at least 30% smaller in square metres, Pullinger said, with a focus on reducing floor space rather than closing branches. Pullinger said the bank eventually wants spending as a proportion of income to drop into the 40s from 52.4% currently, and that it had to modernise and find efficiencies. (Reuters)
AFRICAN BANK LOOKS TO EX-LIBERTY CEO
African Bank, the lender which is trying to rebuild after nearly collapsing under the weight of bad debts, said it has appointed Thabo Dloti, former CEO of insurer Liberty Holdings, as its chairman. Dloti, who is also an ex-CEO of Old Mutual Investment Group and Liberty Holdings' asset management subsidiary Stanlib, will be a permanent replacement for Louis von Zeuner, who left African Bank last July. (Reuters)
FAILED US CHAINS TO COST GPI DEARLY
Grand Parade Investments (GPI), the local representative of Burger King, says it will report a loss for the six months ended December owing to the failed Dunkin’ Donuts and Baskin-Robbins brands. It expected to report a basic loss per share of up to 8.52c, from earnings of 2.92c a share a year before. GPI said in February it was voluntarily liquidating its Dunkin’ Donuts and Baskin-Robbins businesses as they had underperformed. This came after institutional shareholders Denker Capital, Excelsia Capital, Kagiso Asset Management, Westbrooke Alternative Asset Management and Rozendal Partners, which collectively hold 12.5% in GPI, banded together in 2018 to call for the group to let go of the brands. (BDLive)
‘MIXED BAG’ OF RESULTS FOR BRIMSTONE
Brimstone released its results for the year ended December 31, 2018 yesterday, reporting a profit of R71.3 million, down from R141.7 million for the prior year - a drop just shy of 50%. It put down the decline to the downward revaluation of listed investments and an increased loss from subsidiary Lion of Africa Insurance Company, which it added was partially offset by an increase in equity accounted earnings. "It was a mixed bag of results for Brimstone; on the one hand our total assets cracked the R10 billion mark in value for the first time in our company's 23-year history and we recorded a healthy R112 million increase in equity earnings," CEO Mustaq Brey said. "On the other hand, a downward revaluation of listed investments reflective of equity market conditions led to a decline in profitability; our intrinsic gross asset value decreased to R7.4 billion from R8.7 billion, while intrinsic net asset value decreased to R3.9 billion from R4.3 billion for the period." A dividend of 45 cents per share was declared. Brimstone has managed to pay dividends for the past 16 years. (Fin24)
STADIO TO BUY TOP MBA COLLEGE
Stadio announced that it will buy 20-year-old Milpark Education for R320 million. Stadio is the JSE-listed investment firm with links to Curro that aims to develop private higher education institutions in South Africa. Milpark’s master of business administration degree (MBA) has been ranked number one amongst private providers of the MBA in South Africa by PMR.africa for three consecutive years, from 2015 to 2017, Stadio said. Stadio and Brimstone will have a 70% and 30% stake respectively after agreeing to buy MBS Education from Coöperative Apollo Global Netherlands, Encosolve and MBS Education Investments. (Fin24)
ROBOTICS, CODING COMING TO YOUNG ONES’ CURRICULUM
South Africa is developing a coding and robotics curricula to be included from Grades R-9. This is according to the minister of basic education, Angie Motshekga, who said that curricula will provide learners with an understanding of coding and robotics and will develop their skills and competencies to prepare them for the fourth Industrial Revolution. Coding as a subject will be piloted at 1 000 schools across five provinces starting in the 2020 school year.Motshekga said that this robotics curriculum will have a strong foundation in engineering and will enable learners to build and operate robots through programming code. Starting in 2020, South African learners will also have the option to take up Kiswahili as an optional second additional language. (IOL)
PARLIAMENTARY DEFEAT LEAVES MAY’S BREXIT IN TATTERS
The Pound fluctuated against both the Dollar and Euro after the United Kingdom parliament rejected Theresa May’s revised Brexit deal by a vote of 391 votes to 242 last night. The move follows wild trading sessions over the last two days. With the deal all but dead, parliament will probably vote to postpone Brexit later this week. UK prime minister Theresa May’s Brexit deal was rejected once again by parliament, throwing the country deeper into political crisis and raising the prospect that the divorce will be delayed or even reversed.Members of parliament are expected to move today to take the chaotic no-deal option off the table -- but there’s a risk all they manage to do is postpone the drama for another few months. (Reuters)
ELECTRIC REVOLUTION TO SLASH JOBS AT VW
Volkswagen will cut jobs as it speeds up the rollout of less labour-intensive electric cars and will review its sprawling portfolio of brands as it battles to reverse a slide in profit margins, the German carmaker said yesterday. The company said it planned to launch almost 70 new electric models by 2028, aiming to put itself at the forefront of the industry's shift to zero-emissions driving following the 2015 scandal over its cheating of US diesel emissions tests. However, it said investments to retool factories, as well as adverse currency moves and a sales slowdown triggered by new emissions certification tests, led to a fall in operating margins at its VW, Skoda, Audi and Porsche marques last year. (Reuters)
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REROUTING ARTS FESTIVAL TO SHAKE UP CITY
Pietermaritzburg’s first-ever ReRouting Arts Festival, which runs from March 11 to 17, is bringing theatre to the people in new and unusual ways. Instead of traditional stages and seating, the audience will be able to engage with the performers in a series of pop-up theatre events that will “disrupt the monotony of day to day life” in the city. Comprising both exhibitions and performances, venues include the Tatham Art Gallery, Cafe Tatham, Rosehurst, Tea on 23, and Essence Cafe. The performance programme starts on tomorrow at WORQ in Victoria Road. For more information, see https://www.facebook.com/reroutingartsfest/
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