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Welcome to Mind Matters week of 22 August
Women in focus
EPPF announces appointment of Sonja Saunderson as Chief Investment Officer
Johannesburg, 24 August 2022 – The Eskom Pension and Provident Fund (EPPF) is pleased to announce the appointment of Ms Sonja Saunderson as Chief Investment Officer (CIO), with effect from 1 November 2022.
Congratulations to Sonja who would be the first woman to hold this post for the Fund. 2 min read
The gender pay gap contributes to underinsurance in women
Karen Bongers, Product Actuary at Sanlam Individual Life, says, “According to the United Association of SA (UASA), following the pandemic, the projected time to close the gender gap has gone from 99.5 to 135.6 years. In a country where 38% of households are headed by women, this has major ramifications. The pay gap contributes to women struggling, more than men, to protect themselves against the unexpected, through adequate cover and savings.”
This is frightening. However, Karen Bongers has some advice and if you're a woman you should take it to heart. 4 min read
Equity and science: Saving a seat for women at the table
When thinking about biodiversity conservation and climate adaptation, issues of equity – including gender equity – are not only important but absolutely fundamental, according to Professor Emma Archer from the University of Pretoria’s (UP) department of geography, geoinformatics and meteorology.
Archer was a member of a multigenerational panel of UP women – scientists and female student leaders – addressing the theme of “Gender, Diversity and Inclusion: Water Unites Us” as part of the fourth annual University of Pretoria Women in Science Symposium held on 19 August 2022.
Be inspired to become the leader that you set out to be as did Professors Emma Archer and Tivani Mashamba-Thompson. 4 min 30 sec read
‘Women in Africa are real climate change champions ..
“It is estimated that the waste sector in South Africa contributes 4.4% to the total greenhouse gas emissions. However, the nexus of waste and climate change is not explicitly quantified nor addressed in current policies at national and-or at local levels.”
This is according to Cristina Trois, professor in environmental engineering and currently the National Research Foundation (NRF)-Council for Scientific and Industrial Research (CSIR) South African Research Chair Initiative in Waste and Climate Change (SARChI) at the University of KwaZulu-Natal (UKZN) in South Africa.
An illuminating interview with Professor Cristina Trois which once again shows how to effect change through policy and implementation of those policies. 6 min read
Women discuss leadership roles
Tsiba Business School held an on-campus and streamed panel discussion on the importance of female leadership, in honour of Women’s Month.
The discussion, on Friday August 19, was led by Tsiba co-founder and board chairwoman Gia Whitehead and included Prowess investment operations officer and Tsiba graduate Ruth Stoffberg, Asisa Academy CEO Alicia Davids and Tsiba economics lecturer Chloe van Biljon.
Some more wisdom from those who have had to find a way to make it as women in a male dominated society. 2 min 30 read
Global and local economic news
Economic and Strategy Viewpoint - Q3 2022
Interest rates are rising at a rapid pace, as central banks admit that inflation is no longer just a series of transient shocks, but there is a risk that it becomes more ingrained. For many, this feels like a new regime in monetary policy and financial markets.
Keith Wade, Chief Economist & Strategist at Schroeders gives us a round up of the recent quarter and what we could possibly expect in the last quarter. 2 min 30 sec read
It’s an odd quirk of history that, on the first day of his ill-fated presidential campaign in March 1968, Robert F Kennedy chose to talk to his audience about the limitations of gross domestic product* (GDP) – the world’s headline indicator of economic progress.
It seems stranger still that, despite the power of that iconic speech, growth in GDP remains to this day the predominant measure of progress across the world. Economic success is measured by it. Government policy is assessed by it. Political survival hangs on it.
A very interesting article and one which you would do well to read to challenge your assumptions on growth versus well being as a measure of success. 5 min read and available below in PDF.
R3-billion: Sars swoops on Gold Leaf Tobacco over transnational plunder network
The South African Revenue Service (Sars) on Friday took charge of bank accounts, premises and all other assets owned by cigarette manufacturer Gold Leaf Tobacco Corporation (GLTC) and that of its directors Simon Rudland and Ebrahim Adamjee.
This comes after Sars was granted an ex parte preservation order in the High Court in Pretoria in which a curator was appointed to look after the affairs of GLTC, Rudland and Adamjee.
"SARS is harnessing its capabilities to make non-compliance with legal tax obligations hard and costly to those who are engaged in this criminal pursuit. The preservation order is obtained to prevent realisable assets from being dissipated thus frustrating the collection of taxes." Quoted from SARS media page.
This is not directly related to insurance but what is interesting is that there is a concerted effort by governing structures to stop corruption- this is taxpayers money and so affects all citizens. The meaning of ex parte is stated below. 5 min read
South Africa’s fuel price subsidies: a close analysis shows they don’t reduce poverty
Consumers in South Africa continue to grapple with a high cost of living, particularly with the latest rising fuel costs. In the last several months, the price for one litre of 95 octane petrol (inland) has risen by 36.4%, from R19.61 in January 2022 to R26.74 (about US$1.60) in July 2022.
A combination of factors underlies this massive increase. One of the biggest is the Russia-Ukraine conflict as the two countries are substantial players in the global commodities market. This is a concern for South Africa, which is highly dependent on imports of energy products.
Read this article and if you believe that a targeted approach would be more effective try work out what a better policy may look like. 4 min read Also available below in PDF.
Insurance and related industries news
Competition watchdog raids major insurers over collusion and price fixing allegations
The Competition Commission believes that eight insurance companies colluded to fix the prices of premiums that consumers pay for investment and insurance products. Insurance companies allegedly shared information about the premiums they charge consumers.
The Competition Commission raided the offices of eight major insurance companies and seized documents on Thursday afternoon as part of its probe into allegations of collusion and price fixing in South Africa’s insurance industry.
The competition watchdog raided the offices of Discovery Limited, Hollard Insurance Group, Momentum, Old Mutual Insure, Sanlam, Professional Provident Society Limited, FMI (a division of Bidvest Life) and BrightRock Life.
This is hot news, reported by all local newspapers and Bloomberg! What is just as interesting are the comments by readers of this article. They ask if the clients will receive anything from the fines that wil be imposed if these companies are indeed found guilty. The investigation was started in Jan 2021. 2 min 30 sec read
What does ex parte mean?
In civil procedure, ex parte is used to refer to motions for orders that can be granted without waiting for a response from the other side. Generally, these are orders that are only in place until further hearings can be held, such as a temporary restraining order. (Google)
For more on this see https://en.wikipedia.org/wiki/Ex_parte
Explainer: SA banks in the dogbox, but what does it all mean?
In this article from Feb 2017, we see why the Competition Commission allege that three SA Banks were involved in collusive trading in SA and US Currencies. Notice that price fixing only came into SA Law in 2013! 4 min read
Banking and investment news
Capitec on the threat of South Africa being greylisted
Speaking at a media round table (19 August), Wim de Bruyn, Capitec’s chief information officer, said that the bank is actively working with the South African Reserve Bank (SARB) on avoiding a greylisting.
He added that the banking industry as a whole is doing everything it can and is cognisant of the new tweaks, enhancements and additional requirements that are being put in place to mitigate possible money laundering and terrorist financing in the country.
Important that we understand what greylisting is in the banking sector and how it affects the ecosystem in general. 2mikn 30 sec read
Two SA managers with opposite views on China. Who is right?
Is it time to be bullish about China or avoid it?
Camissa Asset Management and PSG Asset Management have starkly opposed views on investing in China. Camissa is bullish about the country’s prospects while PSG is avoiding it.
A good article and easy to read. Great opposing views to help you formulate your own opinion. 3 min read
Why this global AM chief believes an ESG slowdown is welcome
The CEO of AllianceBernstein acknowledges flows into sustainable strategies have lost momentum but says correction was needed to aid next push.
LONDON: Investor interest in ESG-focused funds has slowed during 2022, but it is only a momentary pause caused by rallies in non-ESG areas, according to AllianceBernstein’s chief executive.
Seth Bernstein, who was speaking as part of the US group’s Q2 earnings call, made the comments in response to an analyst question about the current appetite for ESG funds.
A brief account of why the slowdown is happening. What reasons does Seth Bernstein give? 2 min 30 sec read
Fintech
SA banks embrace Google Wallet in contactless payment drive
Internet search giant Google yesterday (23 August) launched its Google Wallet and Google Pay services in South Africa.
With the launch, cardholders of FNB, Discovery Bank, Investec, Standard Bank, Absa and Nedbank can add their cards to Google Wallet and pay via their Android phones or Wear OS devices where contactless payments are accepted.
The arrival of the Google Wallet solution adds to other contactless payment methods local banks have adopted, including Apple Pay, Samsung Pay, Fitbit Pay and Garmin Pay.
A proliferation of contactless payment service providers - which one would you choose and why? 4min read
Intengo Market looks to revolutionise Africa’s corporate debt market
Intengo Market, a digital corporate credit marketplace that was previously incubated by FirstRand-owned Rand Merchant Bank (RMB), is looking to revolutionise the way corporate debt instruments are issued and traded in SA and the rest of the continent.
Ian Norden, an actuary by profession, will head up Intengo Market which is now a fully fledged business in its own right. This is a Business Live article for which you need a subscription, but below is more about Intengo Market when it was launched in Oct 2021.
RMB launches Intengo, a digital marketplace for debt instruments in SA
RMB today announced the launch of Intengo, a more liquid and transparent digital marketplace for the issuance and investment of listed and unlisted corporate debt instruments in South Africa.
Originally incubated by RMB, Intengo is now available to investment grade corporates who want to raise funding from the debt capital markets and in the next phase will be available to investors who want to invest in these instruments.
3 min read.
FSCA sets ball rolling on crypto regulation in SA
The Financial Sector Conduct Authority (FSCA) says the draft regulatory framework for the regulation of the crypto-currency industry in South Africa will be finalised “very soon”.
Last month, the South African Reserve Bank (SARB) announced it was working to introduce a regulatory framework to govern crypto transactions.
The announcement came almost six years after the central bank of South Africa had initially taken a stance not to regulate the crypto-currency industry, as it is classified as an asset, rather than a currency.
After re-examining its previous position, SARB noted it has now reconsidered its stance, having taken steps to regulate crypto as a financial asset – an initiative it is embarking on in collaboration with the Intergovernmental Fintech Working Group (IFWG).
The crypto and regulation space is suddenly becoming very relevant. 3 min read
Agriculture and food security
Finance is key to South Africa’s inclusive agricultural growth agenda
The country’s agricultural growth strategy aims to boost the share of black farmers’ participation in the sector, ensure food security and create jobs. But finance is the burning question.
We have spent the past couple of months drafting the growth strategy that will take South Africa’s agriculture sector to greater heights than the gains we have seen since 1994. The sector has more than doubled in value terms since then. This growth has lagged in including black farmers at the commercial level – they still form roughly 10% of the commercial output.
The growth strategy, such as the Agriculture and Agro-Processing Master Plan, not only aims to boost the share of black farmers’ participation in the sector, but also to support established commercial farming for a robust, inclusive sector.
The article states that the Land Bank is key to getting this plan off the ground. It must be supported as a financial institution. 3 min 30 sec read.
Subsidies for African farmers: we’ve designed a tool to guide spending decisions
One of the hardest decisions a government must make is who to support with the limited public funds at its disposal. In recent years the largest countries in sub-Saharan Africa have spent between 14% and 26% of combined annual public expenditures on agriculture.
This reflects the fact that governments have prioritised access to fertiliser for rural smallholders.
A very interesting article showing how the tool works and how it can be adjusted to specific features of an area. 4 min 30 sec read
Consumer Goods Council granted interdict to stop Food Safety Authority from seizing meatless products
Last week, the Food Safety Authority warned it would seize products on Monday, 22 August, but this time a fed-up Consumer Goods Council of South Africa took it to court and won a temporary reprieve.
This is a very interesting article because it is an illustration of how decisions made at a high level distanced from people in the affected sector, impact businesses and consumers on the ground. Another instance where policy should be adjusted? 4 min read
Theatre of the absurd as Food Safety Authority dragged to court over threat to seize meatless products
This article presents a wider angle on the topic. I have included both articles because the topic would constitute a useful debate on how policies and implementation without consideration of appropriateness can cause economic ruin rapidly in this market. It would be interesting to know if such businesses would be covered by insurance in these instances. 4 min read
Health Care
Health Squared medical aid scheme applies to be wound up
Some 48 000 members and their beneficiaries, who will be without medical cover from 1 September when South African medical scheme Health Squared dissolves the company, have been told by the Council of Medical Schemes (CMS) not to rush hastily into joining other schemes, saying they risk penalties and exclusions if they do.
As yet another casualty of the COVID-19 pandemic, the organisation is taking steps to voluntarily wind up, it said on when a link in an SMS sent to members took them to a letter signed by principal officer Elias Mabena, informing them about the planned voluntary winding up of the scheme.
This appears be a big mess. Lots to learn about in the article that pertains to solvency, but also spare a thought for the 48 000 members who will lose their medical aid cover in September! 5 min read
CMS to oppose Health Squared’s bid for voluntary liquidation
The Council for Medical Schemes (CMS) was engaged in discussions with seven schemes to consider options for members of Health Squared, which intends to apply for voluntary liquidation on 1 September.
In a statement on Tuesday, the regulator of medical schemes “encouraged” Health Squared members to avoid “panic-inspired movements that might leave them worse off”.
This article gives more detail than the one above and comes a week later. If you're in Health or plan to be, both should be read. 4 min read
BHF takes legal action against the CMS to compel it to review the LCBO guidelines
The Board of Healthcare Funders (BHF) has applied to the High Court in Pretoria to overturn the moratorium that effectively prohibits medical schemes from providing low-cost benefit options (LCBOs) to South Africans who cannot afford full medical scheme membership.
The Council for Medical Schemes (CMS), the Registrar of Medical Schemes, and the Minister of Health are cited as the first, second, and third respondents, respectively
What about the LCBO being the starting point as a collaboration between Medical Aids and the government to kick start NHI? 4 min 30 sec read
About YOU
5 Tips for Managing Your Mental Health and Well-Being
Snacking on fruit rather than savoury snacks may help you avoid depression and anxiety, according to researchers from Aston University. And an article from the World Economic Forum suggests that caring for houseplants can improve your mental and physical health. In this edition you’ll also find tips for fighting burnout, freeing up more time and recovering from work stress.
Do yourself a favour and take the advice to heart. The article provides further reading based on its research. 4 min read