Real Estate Investor Magazine South Africa September 2015 | Page 61

In theory, Rand weakness
is a gift that should stimulate
exports, however this is
impossible due to militant and
unproductive labour as well as
regular unplanned power cuts.
due to economic conditions in China and fallout from
the commodity crash which is resulting in large scale
job shedding in the mining industry. Add to this
all the negative political sentiment and corruption
in government at all levels, the trade deficit and
government spending more than it receives in taxes.
Many economists predict a pending ratings downgrade
which will further add to the Rands slide as emerging
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markets become less attractive. Foreigners are net
sellers of SA Government Bonds and South African
Equities currently, adding further downward pressure
to the value of the Rand.
The SARB is going to have to raise interest rates,
which will be deeply unpopular in an already strained
credit scenario for most local households.
Unless Government takes the bull by the horns and
stands up and not only talks a good story but starts
delivering on promises, Sable is of the opinion that the
down trend is here for the foreseeable future.
Watching the Boks on British soil in 2015 is going
to be a very expensive experience for anyone using
their hard earned Rands. However it’s never too late,
by 2019, if you haven’t already, it may be prudent to
start using your annual offshore capital allowance
for foreign investment purposes to start building an
offshore portfolio which may just then make the next
Rugby World Cup trip much more affordable. Who
knows the Boks might even be favorites to win then
too?
SEPTEMBER 2015 SA Real Estate Investor

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