FirstRand profit rises as bank eyes Africa growth and Canal+ pulls the plug on Showmax

Well, first round reporting their headline earnings up by over 10% in the six months

to the end of December.

Headline earnings per share up 11%, I do wonder how big effect a higher car sales volumes

were.

A strong contribution also from the FNB unit, Mary Velocasi is the CEO at the first round

group.

Mary, good evening and thanks so much for your time.

For normalized earnings from FNB, there were up 8%, you say that's mainly from targeted

origination strategies.

What are you doing to get more business?

What seems to be working for you at the moment?

Thank you, Steven.

So I think this last six months period, what's been good to see is I think FNB retails come

again, make it turn around, I think their profits went up by 14%, I think overall country

beaten to a high ROE in that business.

So where did the growth come from?

I think it's a focus on growing customer franchises and particularly in the lower end of the market

where competition is quite fierce.

So I was very pleased that to see that the recent efforts to grow customers, they are paying

off.

So overall customer growth for a franchise that is already big, I think for us that is

good.

On the back of customer growth, we get increased transactional volumes from various services

and solutions that we give our clients and that's really the bigger driver of, you know,

that's what ultimately contributes to our nine interest revenue.

Lending for FNB, particularly retail, has been muted.

So I think we asked only now starting to see an increase in demand for mortgages that

started coming that last quarter of the year and on personal loans.

So I guess we are quite constructive that there is a bit of a turn from a consumer point

of view, but it should hopefully manifest over the next six months.

So that six months was really, I think, a function of good top-line growth and unsupported

by good credit experience.

So that was also good to see.

And the FNB commercial, I think, has been a steady, stellar performer over a number of

years, but also good to see that we are growing our customer franchise there.

We've been lending, and I guess this is also, this is a segment where we focus quite a lot

on coming up with particularly lending solutions for SMEs.

So overall, good growth from commercial, good continued growth by West Bank.

I think you made reference to motor finance, I think, over the last two years, West Bank

has managed to capture quite a lot of deal flow on the back of alliances that they went

into with a lot of the Chinese OEMs, and I guess that's paid off because other Africans

this high demand for those vehicles.

So but pleasing performance, I think, also just showing the discipline that West Bank

team has applied with a strong RE.

And then maybe just to finish off, RMB, French has also delivered quite a strong set of

results coming from their lending activities where they managed to improve the margin that

we earned from those, and the global markets business also bouncing back well, as well

as a private equity business, making a good contribution.

So overall, good portfolio performance from our franchises.

I mean, are you, there's a lot of talk about competition, I mean, particularly at Imagine

for F&B, maybe for West Bank too, do you feel any of the heat of that competition?

I mean, do you have to change your practices a little bit just to make sure that your offering

is still competitive?

Even we have to do that on a regular basis, I think that is actually something that we

are very focused on because if we don't have good, applied value propositions, I think

if our solutions and offerings are not well priced, they're definitely a lot of alternatives

that customers can get.

So we are very focused on making sure that we are innovative and also that we are competitive.

So on the retail front, I guess you hear every day about the number of banks growing

the number of customers.

And for us, it's still quite important to grow the number of customers, but also the

customers that, you know, not only have a transitional bank account, but do a lot more

in our space.

So I think it's, yeah, we're still being able to attract that and hold on to those clients.

That's valuable for us.

I mean, in commercial and the business banking side, I think it's also a highly contested

space.

But there, fortunately, it's not, I think it's a market that we think that we've improvement

in the structural reform execution and the corporate cycle that we are starting to see

emerge where the credit extension is showing that, you know, corporate are back to lending

again.

We think all of that should be supportive of increased SME activities.

So there, I guess we are not, it's not about just protecting the franchise and defending,

but I think there is opportunity, probably for more players in that space.

So, but yeah, I think the key thing is making sure that we've got relevant plan value

propositions and we are looking at after our customers well.

Your operation in Botswana, battling a little bit, the economies in trouble, there's been

a collapse in demand for diamonds, and it's a small part of your overall portfolio.

I do worry that maybe the Botswana economy's not actually going to recover for a long time,

that'll have an impact on you.

Yeah, we are the biggest bank, I think actually the biggest business in Botswana.

So, it's certainly, yeah, I think that the government and liquidity stress transmits

to us quite directly.

And so, look, we are constructive on the outlook for Botswana as a country because, fortunately,

there's that thing point, I guess, from a country point of view, is a bit higher than

most countries start when they experience distress.

And there's got opportunities to implement structural reforms.

If you see the benefits that Zambia, Ghana and Nigeria are able to bank today, that should

be a good example, I think, to the Botswana government around the importance of early structural

reforms.

We left them too late for South Africa, but, okay, we're not starting to take shape.

But, yeah, so I guess we, yeah, we are hopeful that some structural reforms will be implemented

in Botswana because that is what the country requires.

The situation around you in the UK also complicated, you had to put aside, was at 5.8 billion

round because of the sort of misscelling issue, it's not just you, of course, it's other

operators there too.

Are you worried the final findings of the financial conduct authority in the UK might actually

go against you?

I mean, for a long time, you've sort of been very confident in public about this.

Are you beginning to have a few more sleepless nights over it?

I think not more than in the past, and I guess what's also encouraging is that we are getting

to the end because the FCA has announced that they will have the redress scheme out in

the market before the end of March.

So I guess, you know, that will provide certainty around what aspects require redress and how

much it will cost.

So in this six-month period, we haven't set up any provisions, so the number you quoted

is up.

It was the number two June 2025.

We are waiting to just see what the final redress scheme is going to cost, and then we will

take it from there.

Mary Velocasi, thank you so much for your time.

Really do appreciate it, CEO, at the first round group on the money show.

The money show with Steve and Krutters.

For confirmation today from Kunal Plus, the owners of DSTV that they shutting down the streaming

service, Show Max, Tina Sparera, as you know, is the critic industry expert, Tina Sparera

evening, Show Max, him arranging money for a long time, as opposed in the end, a good idea

to just put it out of its misery.

3.9 billion rent and some change, just evaporating, think of what could have maybe been done

with that money.

And now, after sort of the other content cuts, the next tree in the woods to fall is the

streamer after 10, 11 years since it started, now also getting the axe.

And also harbing it once again of what might else still come and happen during the course

of the year, as Kunal continues their aggressive cost cutting.

I mean, Show Max surely had quite a large number of South African subscribers.

There was content there.

A lot of it had come through a DSTV.

What about the model just didn't work?

It was almost like a pastiche, I wouldn't say like a copy and paste version of a Netflix,

but they sort of saw the writing on the wall with streamers and then multi-choice decided

we also need to start and push the streaming service out, maybe a bit haphazardly, maybe

a little bit of miseducation of not understanding and throwing money and more money after that

money.

Maybe in the execution they faulted and now we sit with the situation where another company

bought this company and decided that until year and no further in terms of the loss making

let's cut the losses and end the streaming future of Show Max.

Kunal plus have told us they're going to launch, I mean, it doesn't have a name yet,

but everyone calls it a sort of super app.

So a presumed would include DSTV channels, it would include Netflix or maybe Disney plus.

Is that going to work? That's still somewhere away.

I think it will mostly remain in the way that it is at the moment, but what people might not

realize is that last year, Kunal plus signed a new partnership with Netflix in Francophone Africa,

the countries up there on our continent and bundle Netflix into their offering and I wouldn't

be surprised if they if we're year-lating the year that they're just extending that part

of the existing partnership with Netflix into the rest of Africa and then we get Netflix bundled

instead of Kunal sort of doing the groundwork of trying their own app and all of those kinds of

things they just sort of aggregate and kind of execute better on what multi-joice always

said it wanted to do by sort of bundling traditional streaming services like your Apple and

Disney and Netflix and giving that to DSTV subscribers under one price.

So the whole point of the Kunal plus deal with DSTV is we understood it all the sort of motivation

for it was scale. You've got the operations across Europe, now you've got the operations across

Africa. You would think if scale was the issue that does help you in content discussions

sure, but it would also help you develop an app for Europe and Africa that would run together.

I don't know if it's going to end up like that.

I think they're they're big thing now after basically overpaying by quite a lot for multi-joice.

Now you are on that next step which is aggressive cost-cutting so you're not really looking in terms

of doing more and expanding. You're looking at the balance sheet and seeing where you can cut cost.

Next week on the 11th of March is the first full year results of Kunal after incorporating

multi-choice and then in black and white they have to explain to investors why this on the balance

sheet, why are we making losses here and there and sort of the big things to cut are sort of

starting in content and then with things like show max. So they're not going to now look at

really like expanding. They are looking at all of the big ticket items on the combined balance sheet

and what they can do away with. And at the same time one of the big cash cows sort of live sport,

that market is evolving and changing. Netflix has moved into some of that into North America but

they're also rumblings I heard for the first time yesterday that Sauru might even have

you know stream rugby matches or for Sauru app. Why not?

The shape of things to come. I'm here at the 8th Joe Burke form festival and producer after producer

is coming up to me and saying like contract hasn't been renewed. I'm in season 4 of my show for

take-me towards anti-magic or Mnet. So it's across the board. It doesn't matter whether your show

is profitable or high rating so whatever I think every single thing that is remotely to do with

DSDB is on the cards and potentially on the the chopping block content that might go away that

migrate to other apps or services or might just be cancelled. Tina Sparera thank you so much

really do appreciate it Tina Sparera as you know the industry expert also of course a TV critic

26 minutes now after six. Don't forget why you keep going back to a streaming server so 727-021-702

The money show. The market. Roy Motoni is an analyst at 91 Roy good evening. Let's start with first

round. Quite strong results and maybe also benefiting a little bit from increased sort of economic

activity. Yeah absolutely Steven. Well the results are actually in line with expectations.

What I think the market liked was that they maintained their guidance for high-team growth

for the full year. Remember this was just a result for the first six months plus they increased

their dividend by about 18% just showing what confidence they have in the market performance.

And then when you look at it from a divisional perspective all the essay businesses did well

big new West Bank first track West Bank first national bank in R&B the only one that went

backwards was the UK business but all around quite a solid performance. In parlor platinum I mean

a tough day to release in parlor is to release platinum results they they they they they they

profits were what five times what they were in the six months of their first of their

financial year the year before in the same period but obviously there was a big platinum

sale of today and they got hammered. No absolutely I mean that the results from an operational

perspective were exceptional. I mean you clearly expected the impact of the higher PGM prices but

even from a pure operational perspective they did very well generating significant amounts of cash

increasing the dividend reinstating the interim dividend the balance she strengthened meaningfully

and from a production perspective they maintained their guidance for the next for the next period.

So operationally really good but like you say timing is everything I think the market had

anticipated these results so you release your results on a day when there's a general sell-off

you'll get hit that way but I think as future investors look through sell-off such a reason

for your opportunity and some of the insurers are down some of the financial shares too obviously

their conflict in the Middle East weighing on them and there's a sort of relationship between

share price bond yields and what's happening around Iran. So what's basically happened is before

the Iran conflict broke out those general confidence that economic growth was coming through

and that inflation would come down so it seemed very predictable. I think what has happened with

this with this conflagration is that there's no serious doubts as to whether growth continues

depending on how long this whole thing lasts and whether inflation remains contained across the world.

Now in a world such as that you've already seen the risk of sentiment which is basically people

selling off anything they consider risky such a share and then going into bonds that they consider

that they consider relatively riskless because those are assured cash flows into the future.

So initially what you tend to see with this is that there's a mathematical relationship between

the price of bonds and the yield so the yield is basically just the coupon over the market value

so the cash that you earn every six months over the price that you would pay if you were to buy

the bond there. When bond prices go up the yields go down but at times when you go risk off and

there's greater demand then and yields go up then prices come down so it diametrically opposite.

It's a pure mathematical relationship but I think it reflects people wanting higher returns

because their environment has become riskier. I mean in the middle of that yet sunlim today they

put out a sort of statement they said their new business was growing strongly but then they also

said their headline earnings were lower because I think the phrase was structural sort of changes

and corporate activity and obviously there is the deal with 91 as you know better than me Roy

but it was still I wasn't quite sure what to make of it the market didn't seem to like it.

So it's an interesting one and these insurance company results are complicated on a good day

but I think the way you have to look at this is the results were comparing 2025 on 2024

in 2024 their earnings were not exaggerated but they were higher because of a lot of corporate

action around the Indian business and all of that well in 2025 they didn't have any of that so

they were coming off quite a high base then they're very happy about the new business wins

but they were coming at much lower margins because there was a change in business mix because

of the movement in bond yields people started buying different products which and a whole lot less

for them so it was much harder for the company to be the hurdle set in the previous year so yes

they're getting to earnings going backwards but like you said when you look at it operationally

they're actually not so bad so if you if you use 2025 as your base a start looking forward

on a more normalized basis then you wouldn't be so concerned but clearly when when you really

results and they're getting earnings going down in double digits the first thing you do is panic

or or believe that there's bad news and better than like I said insurance company earnings are

complicated on a good day Roy Matoni thanks so much ready to appreciate it's analyst at 91

7.02 7.02 Steven the Zon X at at Steven Grütters 13 minutes to 7 good evening a big event in London

today the finance minister you know Goranguana was there the reserve bank governor La Setcha

Chanya Chalcio's a transnet nescom they're making the investment case for South Africa it's the

JSE Investek macroeconomic summit Komish Mudla is the a CEO at a Investek essay Komish good evening

ready to appreciate the time how was the message received today what kind of questions were

investors asking good evening Steven it was really a very good day for for essay ink I think we

we had over 18 institutional investors present in the room a represent yeah seems to have lost

Komish Mudla there not entirely sure what happened let's see if we're able to get him back on the

line might just have to read the album quickly but seems to have just literally disappeared

not quite sure what happened to that link but I'm fairly optimistic we'll get him back

and just continue the conversation we have had this once or twice as you know let's just see

if he's there all right Komish I think you're back with us now sorry about that no problem now

in just in answer to your question we had over 18 institutional investors represented in the room

today with all of the government ministers that you referred to and these investors represent

over 29 trillion dollars of asset under management so real capital allocators in the room today

and essay ink has a really good story to tell I think when we look at all of the fundamental

improvements in terms of metrics from energy improvements in the energy availability factor

transport logistics the financial governance coming off the effective gray list as well as

looking at the strengthening of the land and the improvement of 10 year government bond yields

so we take all of those factors in and the significance of the structural reform program

in its entirety across all of the sectors that it's now operating in the message that investors

to come this afternoon was one that we've moved from a significant position of where I think

South Africa has been in the last 10 years on the back foot we were averaging 0.7% GDP growth

onto a platform where we're starting to see GDP growth lift to over 1% in all likely for the year

25 and for the year 26 projected to do one and a half percent with an ongoing trajectory up so I

think the message delivered by the finance minister by the governor of the reserve bank as well as

minister Flabisi and minister Dean McPherson and deputy minister Alvin vertus was one that we

opened for business that South Africa has created a depth of institutional strength now to

have the right investment climate for foreign investment and I mean the world's got a lot more

complicated in the last few years do you think South Africa is sort of navigating those changes

properly I mean our investors happy with what we're doing I mean lots of talk slightly uncomfortably

I suppose about our presumed or whatever our relationship with Iran is I mean I wouldn't even

know where to begin to describe it but I mean are there concerns about that absolutely and

some of that was raised and I think the most important point that came through it was you know we

compared the situation as an emerging market and governor LeSetia Kahnyago dealt with that he spoke

about when the war in the Ukraine broke out in 2022 and and and the significant deterioration

in the Rand off the back of that and high emerging markets got knocked post the declaration of war

between the Ukraine and Russia forced forward to February 26th and and you've noticed yes there's

been a slight deterioration in the Rand but all of the fundamentals in SA are holding us in place

you know the Rand has generally held up obviously we've been supported by by the commodity

cycle and particularly the rise in the price of gold and and that the US dollars not

that perceives the sole safe haven in a time of crisis and and I think that's been some of the

significant changes if you look forward from 22 to 26 I mean in a strange way I hate to look at it

like this because there's a conflict but this could be a little bit of an opportunity we're

trending the right way just as people are looking for a place to invest in other places they used

to put their money on looking so good we're trending in the right direction basically

very much so Stephen and I think that was pointed out by a number of the investors and I think the

debate has really shifted to the fact that we have such a strong framework for investors to

be attracted to that you have the rule of law that you have a functioning legal system

and and where we we can see that investors are acknowledging that that the risk premium

on investing in South Africa is reduced significantly that we are able to attract capital inflows

and you know one of the interesting facts highlighted by Leyla Fary the C the outgoing C of the

JSE was was that the JSE in the current period or in the period to to the end of your December 25

it actually seen foreign investment increase from 28% to I think early this year 34% so foreign

investment in the JSE again a significant indicator and then suddenly Valdeen ready the incoming

CEO had noted that that the JSE has been in the year to date one of the top three performing

you know the stock exchanges so the fact that we are able to attract those sorts of capital inflows

as an emerging market is of obviously a very good indicator and secondly there was consensus

in the room that you should be seeing an increase in terms of our own investment grade rating

so at the end of last year we saw that coming through from from S&P Moody's will be making

their decision early in May but if all of these factors continue in the same trajectory and in the

same line as we currently seeing we would expect further improvement in in our investment grading

and hopefully I returned to investment grade at an earlier date that then was initially predicted

and I think that then opens the doors to be the proper intersection between private capital

into fixed capital formation as well as public sector unlocking many of the public

private partnerships. Komish thank you so much really do appreciate the time what I know is a

busy day Komish modlah is the CEO at Investig S.A.

The money show Stephen Hurtis is brought to you by Absor corporate and investment backing

refined performance is a measure of discipline that's how we're invested in your story

abs is a race to the FSP five minutes to seven on Monday you heard from the CEO at shopwright Peter

Aylbrecht he was explaining there 162 containers stuck in the Suez Canal because of the conflict

in the Middle East and while some of our importers it may be stuck and waiting for products

our exporters beginning to get a little worried about this as well the chair of exporters

Western capers Terry Gale a Terry good evening some shipping lines are ready saying actually we

not going to take produce we're not going to take South African products into that part of the world

yes good evening Stephen unfortunately that is quite the case as well and in particular we

we're reaching the situation now that we have food on the water and that has obviously left

prior to the war starting on Friday and actually what happens to this food that is now on the water

you can't do anything with it it cannot be transferred to another another country or anything

not because of either sanitary requirements differ from country to country and in particular we

opened up a very good market in the Middle East by the very good market going with our agricultural

products and our food going into divine particular as it say most Middle East countries we

nascent with a with a problem that a lot of this is on the water there is one good side to it is

that the majority of the peaks the city of season is over our stone fruit and we are now doing

apples and pears and the grapes are still moving as well so it's not peak season however there are

certainly export boxes at our stock and the shipping lines have already implied that they are not

going to go to the fruit they've cancelled they're not accepting any bookings they're not actually

their vessels are going to be there we don't know actually what's going to happen from day to day at

the moment I mean the problem with this is things back up I mean it's like oil so because oil

can't be exported from that region there's no place to store the oil that's being produced on a

minute by minute basis you have to stop production takes a lot longer to restart that what happens

to all the produce that's been grown specifically to be sold I imagine those fridges and Cape Town

get full too yeah that that is as I say a problem what it was after we don't know as I have just

previously mentioned the fact that can they sell is the protest is still here has not left here can

they reroute their containers but they would have to follow the proper procedure for the country

that they're going to for arguments and containers destined for Dubai we cannot now suddenly move

them to India as an example because India's requirements are completely different to what Dubai

or Middle East requirements are as well so we are going to have an overflow of fruit sitting on our

key side that we wouldn't know what to do well that's why we actually are obviously hoping that

they fall in shortly quickly and not violently either we have we live in that hope but we don't know

from day to day I mean what options are there very difficult to suddenly go and find other trading

partners I must just say other exporters will find themselves in in the same boat obviously I'm

talking about other countries I suppose the problem is that there's almost nothing anyone can do

it's actually it's it's not a nice situation to be in as I said we've done lots of marketing we

grown the market and just listening to the previous gentleman spoke as well I think the gentleman

from shop right he gave a very positive outlook on the potentials as well which was very

interesting to hear however ours is what do we do with the fruit what do we do with the product

that actually is that is booked or is on the water as well we as our run a small company also

that mainly focuses on exports export all over the world and Dubai was quite a big market for us

now we're saying we actually fortunately we do quite a big project in Dubai 40 it hasn't left

yet so we can hold back on that but however there is a situation as I mentioned the fruit is there

the fruit is actually on the water what do we do with that it's almost a rhetorical question

at all moment we don't know and as I said the shipping lines as well the problem was that he's

that the shipping lines have implemented emergency emergency fuel charges with immediate effect

so your costs are going up but the time the goods get there irrespective of what the situation is

somebody has to pay for it and it tends to be either with a shipper or ultimately the importer so

the costs are going up all the time as well Terry Gale thanks so much chair at exporters west in

Cape yeah something very difficult to fix he can't really do anything maybe you just have to sort of

wait but that's hardly hardly encouraging we'll talk more about the streaming industry in a moment

don't forget also investment school tonight how to keep your emotions in check during times like

this you with the money show good evening seven o'clock

in conversation with Stephen Curtis is brought to you by Microsoft empowering essay through the

mission next equity equivalent investment program well in the beginning it seemed pretty obvious

that audiences were moving from TV to online streaming audience a TV audiences drop and they

haven't recovered but they're not always on streaming we've been talking about showmax all day

supermolele zondie there's our tech expert and he joins us now supermolele good evening so we've

been hearing about showmax and we understand the competition they were under but some of the

things are happening in other places so in the years you've got paramount plus and HBO max they're

merging into one platform is it the same thing um well hello Stephen and yes totally um it's

a bit similar things because um what you realize in the United States of America is that um uh

paramount has gone and done a take over of one of brothers which used to make um movies for a very

long time so um they dominated in that in that sector so because of that take over you would think

that's in the way that it's happening here in South Africa um with canal plus um hasn't done a take

over of multi-choice um that there would be restructuring and part of that restructuring is that

your content through streaming services done by what is now one company so a merger then would

be expected um in that particular area as well and it's quite interesting that it's it's pretty

it's all across the world in what used to be and still probably is um the biggest uh the film sector

in the world um but yet their issues are pretty much similar to ours. I mean other services have

closed recently I mean there was queso there was telecom one remember that there was voter com

had one where where are the audiences going um well audiences seem to be um I the clip that you

played it's it's the it's the fragmentation because there are um a lot of these streaming services

but um we also need to realize that it's not the traditional film or the traditional tv players

that are now enabling people to consume content there are other platforms and they available um

all over online spaces um that have not been in in this traditional tv space they're now available

on making content available think social media for example which is um where a lot of people spend

their time we're even here that South Africans uh spend probably the most amount of time on social

media when you compare them to um many other nations um and so they've also enabled um a video

as well and short videos um as well which have also even changed how movies are produced because

movies are now or movie producers have realized concentration is taken away people don't have time to

try and figure out complex storylines anymore uh because um a time is taken away by this small

screens and short videos and they have to cater to that in how they produce movies as well

so I mean what I've been fascinated by is the more and more evidence that more people

are watching youtube on their couch they're sitting at home and watching it on their big screen

tv what is youtube doing so well and I realized the shorts is a big thing but is it just uh

it's a multiple things right because a multiple research that's been done says that gen z for

example um that's consumed documentaries you would have thought so that's the younger generations

and interested in documentaries but they consume these documentaries on youtube um and you

mentioned shorts just now so that's also they got that from TikTok because TikTok came with short

videos and they also then started producing short videos too um and you would think of podcasts

as well because they have also said that our podcasts are their best performers um so uh

podcasts are also so I suppose because it's a one-stop shop for multiple things it also enables

people who haven't traditionally produced contents because these traditional platforms um that

some of which are starting down now come from um a big tv players who probably still use methods

that are in a way okay it can now because um of how tv used to function when it had no competition

when they would have expectations of what a production company is what contents must look like

uh whereas if you find a platform like youtube yes you'd find um tv producers going into that space

you'd find um and use producers um uploading their content on those platforms too

but you'd also find an ordinary Stephen Hubert who was out at the beach and spotted something and

decided to upload it um on youtube you'd find a surfer for example who comes in from a different

territory comes to South Africa and documents um his experience when he was exploring South Africa

so it's because you can get multiple types of content um of the professional kind as well as

the type that's done by the ordinary person on a single classroom okay okay so that makes a lot

of sense and I think a lot of people also just go through sort of old movie clips because it's fun um

so now you have people they produce content right and they produce it for tv and that to move

away from tv now streaming platforms are merging or shutting down i mean the producers

and and at one point we had quite a big tv production industry in South Africa i mean they're battling

um um and it it does seem like um it's going to be a continuous battle because um there's also the

next point in order in all these battles that are so there in now fewer spaces where their content

can be um and also there's AI also now that's also taking um some eyes away and social media which

has also taken eyes away changes um it will change the nature of the film industry and the tv

industry in South Africa because um it doesn't seem like um we know the one place that audiences are

because when we thought we did know where audiences were we're transitioning to it seems like

audiences either are no longer there or we overestimated that yeah it's so interesting to see how

all changes and you still need more content i mean i realize AI but also AI slot um i mean audiences

could be more discerning or just more distracted i know matt damen was talking about how films

have to change because people aren't following as you say the storyline and then kind of what's

the point really um well that's the thing it also it also has creativity right and what a

feature film actually is because um if you're going to sit for an hour and a half thing about for

example when you're sitting with the kids and watching a film for an hour and a half and whether

they can concentrate um as much as we would back in the day when we were watching the films we

loved when we were growing up so um and also um the repetition um in the story lines because they

know that there are multiple screens that they are contending with they're not just focusing on the

one big screen um or as they're focusing on the one big screen but the mind might also be thinking

about the small screen that they might also go and and pick up and fetch um and it's taking the

the eyes away so it needs to i suppose some new type of creativity that's that that's constantly

going to get the ice back on the primary screen or maybe the primary screen is no longer the big

screen and that's what we also need to understand that the primary screen has become the small screen

and maybe content including film maybe also needs to be produced for the primary screen now which

is the small screen sure supermolele thank you supermolele zondi our tech expert really do appreciate

the time Microsoft South Africa has launched mission next a high impact equity equivalent investment

program calling on South Africa's most ambitious future ready black owned smme's to own their next

phase of growth future next forms part of Microsoft's commitment to empower established black owned

businesses with the tools skills and global tier technology required for rapid scaling

small business focus is brought to you by capitex startup or scale up with capitex for business bank

for everyone or so often when you're running a small business it's the things outside your control

that can have a really big impact on you and the one thing that can hurt you now is higher oil

prices and then higher fuel prices or because of what's happening so far away from where we are

learn cladome 20 is the managing director for vantage advisory uh how's it learn cladome good to

talk again i mean it's a classic case right a company can be operating quite well something comes

along and suddenly your costs profile changes completely the delivery driven and uh you actually

put um you know what is interesting is that businesses can be able to absorb a couple of business

right uh however when it comes to sms um one event can eliminate a business out and uh usually

make an example right now you know in this particular case and you find that there's a business

that has uh taken some orders and and invoiced uh their customers and uh the bottom item somewhere

in their make list and the item was supposed to be shipped or delivered and this week

it is stuck and you can just imagine in terms of that entrepreneur right now uh how they are

feeling and especially that the customers will be expecting uh their products and you find that

as well on the other side especially with sms they're not able to really have couple or absorb

some of the overheads and especially one important element one line item especially when you

import is an insurance and the moment is you didn't actually take that box uh you'll find the

path that within a month you'll be out of business so that is basically the the classic business

case when it comes to sms that event like this uh can become catastrophic and and and therefore

but there are some learning heads as well that i think the sms should be um and learning from this

and especially when it comes to defecification of your employer yeah i'm gonna i'm gonna

just hold on a sec so so i mean the problem is is sorry don't clear but no one sort of saw this

coming i mean you know if you know if you're if you're running a small business i you would have

maybe known the top of your head it might come but but this is another example of how you have

to prepare for the unexpected is is my greater point well you you put on and and i think the

and again the lesson from here is that risk management becomes one of those items we usually

anticipate or things that applies only to good businesses and because i've got the budget for

that but i think if you are running a business as well as an sme it means path and path of

of your strategy when you start the year to say look how do we apply some of the risk management

principles and what can we do to save ourselves shall they be all of these shocks and i think right now

especially with this decade we are learning a lot of things that we have we're having more and more

of these events that are becoming you know heavy shocks for sms i mean we had uh convened

i just four or five years ago and we are having this now uh right now and therefore we should not

really assume that all of these things are only impacted good businesses but sms at the end of

the day especially a country like South Africa or a continent like Africa that is becoming more and

more important and dependent so therefore i think it's important that you also surround the

path with good advisors and your good accountants basically that can help you to advise your

on that there's a really important point you're going to make and i really interrupted you about

supplies and diversifying your supplies how do you do that yeah look and again i think there

also an opportunity here for DGIC is to say that we've seen you know how manufacturing based in

South Africa really going down over the years and and I think events like this they really

reminded that let us also invest heavily um you know locally so that at least yes you can have

your main supplier that you've been doing business for like a year or two or three years down the

line however you must have i think a second of a line of suppliers that should in that particular

region for instance be affected think about how many SMEs that are doing business especially in

Asia with the likes of China what happens if they's an event like that what's going to happen to

those businesses so it's important that i think of an FME that you don't really become

heavily you know focusing in one region when it comes to your suppliers but most importantly as

well come in the lessons that we are picking up here especially on the SMEs that have to that are

going to be impacted you know i think collaborate as well with with other businesses you know

with some of your competitors as well pick up a call and discuss in terms of how you guys can

absorb some of the rising tricks to cause that are going to be coming through especially businesses

like retail you know i'm just going to trick it to some gentlemen over saying look all of

that and we can be sitting with all of these goods where are we going to do with that so retail

tourism sector you know logistics these are some of the other sectors that are going to feel the

immediate impact i mean when when when things get tougher so so for a long time we've been talking

about you know lower inflation lower interest rates all of that stuff suddenly it could all

reverse many because of higher fuel prices and it's very hard to get around higher fuel prices for

anyone never mind a smaller business um can you prepare better kind of next time round there'll

be a lot of lessons from this time the problem is i mean no matter what you do fuel prices are going

to whack you well and and and and and again the manufacturing company will tell you that the

impact and especially if you have um has on their on their income statement but i think what

what is important here i mean it says go back to a drawing board right cash flow becomes

king in you know in periods like this and and and and you have to really try to say okay fine how do

we collect more than you know to really you know run away for some of this cost and and i mean

it's it's it's ideas like when you shorten some of your payment cycles you know if you have been

getting paid in 30 days um offer some incentives to say if you pay us within like a week or two

will give you a particular discount two percent or three percent discount because you you can have

all of these things but if there's no cash that is coming uh you'll find yourself you know in a

situation where you're not able to cover your day-to-day um operating expenses but i think

more importantly you know don't ride this way alone uh bring your advisors closer you know bounce

ideas and you find that you know uh what two is better than mine yeah uh and i mean it's also this

is the moment i mean i hate to be this person but if you survive this uh you might suddenly find

that you have a bigger patch of the market to yourself yeah look the impact on the

impact on this people it's quite dire because i mean if if you think about it um i mean we had about

cost thousand five that are grounded it's one of the biggest that we've had under the

covid and uh the nine eleven you know and most people that are and retailed as well they're going

to fill the pitch especially those ones who are importing around the meek list um but also it's

an opportunity for some of the businesses or some of the local suppliers as well to real rise as

they look and if you were importing this particular project we are on the corner you can start now

to consider and use us and that's what we've been saying um you know and we're very much

very much worried about that as i said we're becoming more important depending on the makers because

of the costs right but i mean if you are a local manufacturer you know and you've got a very good

product and your cost competitive i think it is your time that you take this is an opportunity to

reach out to some of you know your clients that you know they import quite a lot uh thanks so much

really do appreciate that long trade on twentware uh the managing director advantage advisory so much

to look at in these problems the money show investment school 25 minutes now to seven the time well

rarely i mean in moments like this what else can you talk about on investment school and we've

such volatility over the last few days the JC losing huge value regaining half of it then

kind of losing it again uh in the u.s. indices swinging back and forth i mean there's probably a

more technical way to say that but let's just think with swinging back and forth i mean south

career the index yesterday dropped 12% more than at any other day in its history i mean how do you

i suppose manage your emotions manage the turmoil just manage all of it tonight we're joined by

shuntel marks they have equity research they're definitely wealth and investments and the

sunda notches that even investment offers a at marzy acid management and thanks to both to both of

you so much for coming in i mean shuntel um if i can start with you i mean the first moment when

i see an index falling like that frankly let me just be honest here is i fear for my retirement

and isn't that the normal human emotion that we have to overcome well shuntel i don't not sure

if you're there i think we're going to just battle all right a sunda i mean that feeling of fear

is the emotion right natural um and uh grieve me everyone uh that is the natural feeling and you know

as you say immediately you're thinking you know my sunset to the the retirement and you see this big

drop um and you know half of of of your dreams are getting wiped out um i suppose this is where

the the the the element of managing your your emotions uh managing the fear factor involved in

all of this uh comes in of course for people to do this all the time when i say it's easier but it's

not so i can i can only imagine for people who don't look at this and do this on a daily basis but

i think what what i can say is uh it's it's really the time to focus on what it is that you're trying

to do so you investing for the long term you've got a strategy you've got a plan um of course equity

markets are at times a big part of long-term investment and long-term savings by by their very

nature um and actually part of the you know there's the the editor you know risk return um of course

this is now heightened risk and yeah and uh you know we've seen instances and history where

there's been big drops and then you know we see recoveries over the next couple of years so

yes um this is the time to really just sort of uh knuckle down remember why you doing what you're

doing um and uh and focus on on on sort of the lead long term uh thinking around what it is that

you're trying to achieve uh shantou marks you with us now i mean can you almost prepare your emotions

for a moment like this can you almost think to yourself when you go into investing there will be days

when this happens i think it comes with many years in the market where you see days like these

taking place and you actually start seeing the opportunities there's always uh uh it's always a

little bit of panic um i think it's just human but you start seeing the opportunities

amid the the chaos and you're able to maintain your composure better but i think the first step is

actually recognizing that having these emotions like panic like fear is very very normal um and

to to coach yourself through that uh to say okay i'm feeling this this is a natural human emotion

but that but that markets don't really they don't work according to emotion you'll get short-term

volatility that is based on other investors fear and greediness uh but ultimately markets revert

to the fundamentals they're avert to long-term growth they're avert to strategy and thematic changes

and technological changes they don't longer term reflect human emotions and once you get that

mindset right i think it's easier to start spotting the opportunities instead of doing something

rash like panic selling and i mean i sunda there's there's also and this is you know the bigger

sometimes the more difficult questions that there are actually opportunities in these moments and

i'm not just saying to you know by oil or look at the people who bought tuna gale today but there are

things that you can do that will actually maybe make you some money absolutely um i think there's

uh there's all these editors you know by when there's blood on the street and and so on i think

what what it goes back to or back it really relates to um understanding perhaps that assets even in

off the mouth of all of this you know we still need to eat we need to uh call and communicate

we need to get to work and and all these things so they are some they are they remain basic sort

of fundamental economic principles that then drive what you'd say are the value of of assets

underlying uh ultimately so um it's not that you know all of a sudden the banks uh shut down and

close and and so there's no banks um as i said shop right will probably still be around we'll still

need to go and and eat so the opportunities then arise from understanding that uh these moments do

sometimes present opportunities to buy good assets with good fundamentals at actually much more

attractive prices than what you would have bought them for uh let's say a week or two ago i mean shantel

you know sort of buying the dip and i mean you saw buying the dip you know almost immediately that

this started you know things plunged and then people bought the dip but if people are buying the dip

i mean are we going to get to a point where people buy the dip so quickly that actually there's no dip

we are starting to see that the the the dip uh becoming a much uh sharper dip and not no longer

kind of a shallow drawn down dip so i think you have to be quite quick uh and you have you'll

probably have to become quicker over time and that is just because there are things like algorithmic

uh kind of trading that is taking place in the background machine trading taking place in the

background so it makes it a little bit more difficult for the man on the street to actually take

these opportunities when they arise and take them quick enough um i think the the best thing to do

is not to try and be first but to see where that disconnect really has taken place between

but perhaps a company has come under pressure and it hasn't exactly recovered maybe you miss it

on one but there'll be opportunities like that where you don't see that immediate recovery

and then it's also important to just stick to your strategy i mean if your strategy is to set aside

a certain amount of money per month naturally you will be you will you will invest through periods where

you have uh opportunities to invest in the dip without even knowing about it because your

debit order's already gone off another important strategy is just to to keep that diversified portfolio

and stick to your portfolio management rules so look at whether or not some companies have run

very hard in this case there was also actually opportunities to sell because you would have seen

some of these oil companies and the energy companies rally exceptionally hard on the back of

what happened in the middle east and maybe they've run ahead of their fundamental values and the

and the um the fundamentals in the oil market so sticking to portfolio management principles

and sticking to your strategy is probably the best option uh and not trying to time it perfectly

because it's almost impossible to do that yeah no that's so that's so interesting i mean it's sort of

i suppose investing like many other things you know perfection's the enemy of good

as under um there must be things that you need to remember and there must be things you need to

avoid in these moments absolutely so i think remembering uh maybe just back to which until said

you know you didn't invest for a purpose let's say so i'm saying this money aside for retirement

for um a holiday for children's education so investment strategy um even if we go back to

right at the beginning the purpose for actually putting the money aside becomes an important anchor

that uh one needs to lean on and remember um in terms of uh you know in these moments and sort of

trying to make sure you stick to those principles i think again the the the fear factor the

the sort of the desire or the potential to panic in these moments is really where one needs to

manage themselves uh focus on what it is that you're trying to do in terms of the investment strategy

much easier said than done uh so so it is i know what i'm saying for people who are watching

their statements or watching um the market's moving at the moment it's like what are you talking about

um but i think that's really when we talk about equity market those are the kind of things that one

needs to um be aware of a hit of time in terms of what it is that you're getting into and the

characteristics of the equity market and and how they can uh perform um i mean it's sort of

interesting i mean shantel i'm sure they're they're kind of things you need to remember in your

head while you do this and i mean part of it is it's just why you invested in the first place you

know you've got to have a a sense of what the actual point of all of this is and the point of this

isn't actually to protect all your money on monday and and and double it on Tuesday your your

aim is actually something very different yeah so i think when it when we're looking at short-term

trading perhaps your aim is is more immediate but when you are a long-term investor and you're

investing for retirement or for a specific goal and you have five to ten years on your side uh it's

i think like just looking at what markets have done in the past during these shocks or these

bouts of volatility uh think about liberation day uh think about russia you cray and think about

covid-19 you will have a lot of time and you won't even need that much time for the market to recover

fully and then some and kind of repeating that to yourself will also help you stay calm during

periods of volatility it's very natural for markets to react violently to news like this uh but it's

also very natural for markets to eventually settle down and revert to behaving according to the

fundamentals uh as i said earlier so i think once you understand that the point is not to make money

tomorrow or for next week it's it it it calms your mind to a certain extent um sander we we we're

talking specifically about managing emotion um but a lot of trading now is almost automatic it's

algorithmic in other words it's not humans making the decisions it's give it a name

quants algorithms AI machines it's a machine right it's a machine that's been programmed

now when that happens that should automatically take the emotion out shouldn't it it it should um

theoretically um i suppose with these machines um they are let's let's use the term algorithms

which have been inputted in there so um simplifying it maybe that algorithm comes from someone

yeah they all biases at times that are embedded in these algorithms um so if you think about an

algorithm that's gonna say well um a share is full in 10 percent i need to sell now that immediately

is a bias because who's to say that it's in the 10 and a half percent that it starts to go up

again so so those those are the kind of things that you know yes they are they it's the machine

reacting but there is built in um i'm gonna say intelligence if you will or direction um

instruction that's built into it i think another thing maybe a related topic is that um markets

these days are influenced by newer factors so you've got the Chinese retail investors who

can't invest in property now um the us uh let's say buy and get us bonds and so on

not so sure about that because of what's happening with the us or the dollar and so on

and so we've seen those investors alongside let's say central banks and so on also buying things

like gold um so you've seen also quite interestingly you know gold not reacting peps as uh as would

be choreographed i.e uh uncertainty geopolit politics there's the the potential of oil rising

causing sort of an inflationary uh impact so i think that's also maybe along the same lines

and an impact in the market which is resulting in very strange behaviors movements in the short term

but again it maybe does talk to some of these biases that are that are embedded in these reactions

and and i think back to you know what we've been saying is long term strategy seeking to

the strategy in terms of what you're trying to achieve and not being influenced in the short term

um shantan i'm gonna put this question to you and to a standard because i think it may be a big

question if we have more sort of AI or automatic or computerized trading and you have a non-emotional

trader does that change markets because the issue of sentiment starts to disappear

yeah i mean the the reality is you'll have a non-emotional trader but you'll have an emotional client

at the end of that portfolio so so that is something that you also need to to keep in mind

your algo might be trading efficiently um but your human who owns that money and owns that

portfolio may not like the the the the outcome um what you could also find is that the machine

starts acting in almost a very similar way so you you build efficiency in your markets but through

building that efficiency it actually becomes inefficient again because the machines are all doing

the exact same thing or acting similarly to certain scenarios you could get a massive disconnect

between what is actually driving a company's profitability and what its share price should be

so yeah i mean i think it can change it but it could actually not change it in the way that you think

it might change it that's such an interesting point because a sander instead of you know a sander

versus shantel i mean in the nicest possible way um it really becomes it really becomes program versus

program and they will do the same thing i mean humans copy each other now but programs will absolutely

the same thing yeah and i think you know it it almost becomes a a soul fulfilling prophecy um in a

sense where you're trying to avoid an act in a certain way programmatically but if one machine is

doing that and another one sees the outcome of what the first machine is doing so it's a shantel's

point then the other one reacts to that then the efficiency is actually lost because the reaction

is not to the original information uh but to almost the artificial uh outcome of what's happened

in the in the first instance so again i think the impact of all these things uh the extent of the

moves and uh and what they mean becomes so much more vague and opaque because it's not then linked to

let's say fundamentals people looking at the company and say well this company is now 10% less

valuable than it was um a moment ago but it's actually reactions to information inefficiencies

creeping in and again i think it it does to your point to to your original question it does

introduce um changes and different patterns in terms of how markets trade and how uh all relative

to what you've seen in the past peps we're speaking to a standard notch that you've invested

officer at marzia's at management and shantel marks head of equity research it wouldn't be wealth

and investments an investment school how to manage your emotions on the markets during these times

nine minutes state the money show investment school speaking to shantel marks head of equity research

at if and be wealth and investments and a standard notch achieve investment officer at marzia's

at management how to stay grounded during these times how to manage your emotions i suppose just

how to keep your shirt might be the old fashioned way of saying do you know when this happens um

shantel uh you've made the point and this point has been made about how markets tend to calm down

and i think you might have been a part of the conversation which pointed to the great depression

were like the next day the doubt the next time the Dow Jones got to where it was that you know

before the start of the great depression was i think in the 1950s so i mean obviously you are correct

markets do calm down um do they always sort of i mean do they always have a pattern like the one

we're seeing now where you actually can't predict which way the volatility will go

it's become worse in terms of predicting where the market is going to go particularly when we're

looking at shorter term movements and and a lot of that has to do with how interconnected the

world has become and and also how technology is also playing a role in how information is

disseminated so i do think that it is becoming a little bit more difficult and the volatility is

also quite heightened uh for quite some time after the initial kind of shock event um what i would

say though is that the recovery time is has become a lot shorter as well so you've seen these big

reactions volatility is heightened is heightened for a few days but when you're looking at the recovery

of the market it happens a lot quicker uh then it did in the past and that's just because that

again that information gives disseminated pretty quickly um if you cast your mind back to

the the great depression you were also in the midst of uh well what followed was also a global war

so there were a few shock events that took place but you were also living in a world where

countries and markets were very very isolated so it would have taken a very long time to recover

capital's flowing freely now no one's isolated anymore everyone knows what's happening so it's

it's easier to adjust so asunder i'm going to put this point to you just to be difficult because you

know it's what i'm paid for um i would argue that the situation in Iran and the attacks around it

are not what's changed what's changed is the trump administration and the trump administration will

have long-term consequences so if you look at this would be the argument not necessarily my view

but the argument iraq was supposed to be a quick thing and ended up as a disaster same for Libya by the

way um and a disaster for the people living there uh iran could easily go the same way the trump

administration still has some time to run the sort of make america great movement in the states

is not done yet and doesn't that mean that that's actually what's changed and therefore markets are

going to be like this not just because of this not just because of Venezuela but because of trump

for a long time this is not a one-solve event is my point the world has literally changed

that's probably the the with the with the developments in iran one of the biggest questions is

how long do we think this is going to take and so i think your question is is quite fundamental

um i suppose if you look at geopolitics you know what was coming down along along the way

is the the shift in terms of east west um china us uh so so i suppose you could say the what we

see now is a heightened um development of that long long developing sort of trend um perhaps the

trump administration is accelerating that the the the the sort of geopolitical um i'm going to say

almost like a fight for for for position for dominance um and uh having said that though another

view around it is you know there's the there was the green land sort of situation uh with with the

trump and yeah Canada and Mexico uh so there's there's the other school of thought that says look

all you all the trump administration is after is the dominance of the of their hemisphere as they

call it and uh and so that then gives the chinese an angle in terms of dominance in their hemisphere

and so we lived in that we live in that fractured world when your problem is you know

iran is a long way from uh that other hemisphere so so there's also then the the the the sort of

discussion around oil and where china has been sourcing its oil and uh the the sort of discounted

oil it's been getting from police like live in israel iran um so yes i think the the arrival of the

administration does accelerate a lot of these um i think geopolitical uh developments that have

been simmering i think and perhaps uh that's that as you say what we can expect um in the next

a couple of years going forward um well so much to think about uh so much to stay calm about

has under not sure thank you the teeth investment officer at marzi acid management shuntel marks

that have equity research it wouldn't be wealth and investments really do appreciate the time

on this um and as always in life you know you've got to sort of listen to your head not too hard

when you've got to make a big decision particularly one about money count to ten and all of those

things but in the end now as both a sunda and shuntel made the point you have to think about why

you're doing this in the first place