Old Mutual gains traction as strategy pays off and Spar cuts costs in deeper turnaround push

And now the money show with Stephen credits on 7.02.

Let's walk the toll.

The money show with Stephen Curtis has brought to you by Absor Corporate and Investment Banking,

proud sponsors of GTR Africa 2026, enabling trade flows for growth.

Absor's a registered day for SP.

Good evening.

Nine minutes after six.

Good to be back with you tonight.

Thank you to African Milani for standing in for me yesterday.

A very busy corporate day.

Lots of different news.

I suppose if I had to pick and choose probably the two most interesting stories and that

might well have long term consequences, the one would be SPAR announcing what they

call voluntary severance.

They're letting workers go bluntly and they've had all sorts of issues.

We'll talk to the finance ghost.

Never spoken to the finance ghost before.

Have read the, have they worked many times?

I'm sure you have to about the situation at SPAR.

And the other interesting story is Mr Price, capital markets day to day.

They're CEOs.

They're management backing the decision to buy NKD, the central European retailer, investors

taking a listen, contemplating for a moment and then the share price fell four percent.

Really astonishing story in a way.

And we've heard from shareholders before they really don't like that deal.

There's something about it.

They don't like.

We'll talk, as I say to the finance ghost about SPAR and about 10 minutes.

Julie Straderms, the CEO at Old Mutual, they're very strong results.

They're headlining, adjusted headlining, so I should say, up 24 percent also, of course,

the announcement that Roger Jardin will be their new chair.

I remember working, I remember working under him very, very well.

He was the chair at Prime Media, he's been at Avenge, he's the chair at first round

as well.

Now I'm moving on to Old Mutual.

Fascinating to watch all the banking results that we've seen over the last little while.

At PWC, he's been going through all of them at talking about the sort of strengths

and our banking sector, some of the decisions they're being making, they've been making.

We'll speak to Francois Prinsler, at PWC, Africa's banking and capital markets leader at

around 640 or so.

And you may recall last week, I made the point, and I think it's an interesting point,

I made the point that black economic empowerment, a very controversial, we often hear arguments

against it.

I could probably point to a piece a day that's written about it in the sort of comment area.

We don't hear the argument for it, and I said, if it's only the ANCE, that is for it,

when if the ANC goes, could that be the end of BE?

Will someone defend it?

Well, I'm pleased to tell you that Rufo Amana-Khings, the CEO of the Black Entrepreneurs

Alliance, he wasn't listening to me that night, he says, yes, he will defend it.

I think that's going to be quite important.

And I just should just tell you, after 7 o'clock, the discovery, live deputy CEO, Garrett Friedlander,

they've had issues, well, they've been some very interesting data, and they've been

spending a lot of money on the early detection of cancer.

You can understand why, because for them, the earlier they detected the less cost, the

less cost down the road, obviously it saves lives too.

And some of the ways they're changing that, does seem to be working out for them.

Good to hear from you tonight, OWA-30702-021440567, and O7272-1702.

The Mali Show

With Stephen Krudders, live on 92.7 and 106 FM

Streaming on the Prime Media Plus Snap

And DSTV channel 856

Well, a busy day for Old Mutual, announcing Roger Jardine will replace Trevor Manial as chair

in June.

His headline earnings for the year to the end of December are by 24%.

That's suggested headline earnings, I should say, the CEO at Old Mutual's

Jury Stradem.

A jury good evening.

Thanks so much for your time.

Obviously, different things happening in different parts of your business.

Old Mutual Insure increased their group, gross, written premiums.

Not the only insurance company to do well here in the last year or so.

Are you seeing there's a bit more demand, maybe, for insurance at the moment?

Hi, Stephen.

Good to be with you.

Yeah, I think, I mean, our businesses has had a good year.

I mean, I think I've sickened before that we really think that we've turned around

the performance of Old Mutual Insure and, you know, we're poised to regain market share.

And, you know, I think for us, it's been more, more period of kind of restoring margins,

which I think we've done successfully and improving operationally.

We've got a very extensive use of data and AI.

And I think that is going to translate into growth and market share for us.

And I do think the demand is there.

Your loans and advances were down.

I think it was 4%.

And your finance loan book overall down 3%, and you said today, you wanted to improve

the quality of the book.

Also, you're not the only financial institution that's done that in the last year.

Are your non-performing loans maybe just a little concerned, they're rising a little

bit above what you wanted?

Yeah, so, you know, I think you go through cycles, don't you, with these, with, with, with

landing businesses.

I think we went through, through, through a period the last year or two where we've, we've

been wanting to tighten up somewhat and, and deal with some of these non-performing,

not, some, deal the non-performing loan issue.

But we're comfortable now with, with, with where that book is, how the, how the book

is performing.

And we've also actually started growing and loans advances again.

So, loan advances going up again by 22% this year.

So, we really are back into a, into a growth phase for that business, which, of course,

as you know, is, is, we've merged into our OEM bank of business in that cluster.

And so, actually, the success of both of those businesses have very closely coupled

together.

So, very important for us for the launch of the bank that we have a strong platform in

the finance business.

Yeah, that does make sense.

And I mean, the bank, everyone seems to have a bank nowadays.

You did a soft launch approach, employees and customer, there's, then your own customers,

then sort of open to the public.

Are you happy with the interest that it's evoked?

Have you seen a strong response?

I mean, you're happy with the progress it's making so far?

Yeah, you know, we, we are still, signing up 3000 customers a day, you know, I think

we've gotten up 31 December 284,000 customers.

So, and, you know, no, it keeps growing.

So, I think comfortable with customer traction, we haven't actually even yet gone for,

for, for our public launch, you know, our marketing campaigns.

That's will be in queue two of this year.

So, for now, we've been focused on, whilst we've been open to the public, we've, we've,

we've, we have been focused on conversion of all mutual clients, you know, integration

with our rewards program and so on.

And those things have gone, have gone well.

We've also seen almost half the customers actually being originated through, through our

branch network.

And you might recall, you know, one of the big, one of the big things for us is to take

advantage of old mutual's physical presence.

So, whilst we have the, the new technology stack and we've got the customer experience

on the app, which we think is world class, we, we're able to combine that with a kind of

in branch, face to face experience and that, and that really is a competitive advantage

relative to some of the other digital only new entrants.

Hmm.

Um, you, you were talking about lower annuity and retirement fund umbrella sales and that

did have an impact on you.

Um, I presume you're, you're going to try and improve that, is there an, an issue with

that sector?

You know, it's actually an industry issue, so the, so the guaranteed annuity market tends

to, we tends to rotate, well, annuities generally, people retiring, they tend to choose

a guaranteed annuity or a linked annuity, which is just, you know, as you know, one where

you just take the investment risk yourself, it's not guaranteed.

It depends on, on, on the pricing of the guaranteed annuities and in particular, where,

where bond yields are.

So actually, we've seen across the board with South African bond yields coming down, people

tending to favor linked annuities more.

And so that's really not been an old mutual issue per se, but more an industry issue and

what, you know, it'll tend to follow the cycle.

Yeah, that does make sense.

You're, you're obviously like everyone a bit worried about current geopolitics.

You say our situation, I think the phrase you use has actually become more constructive.

How optimistic are you?

I mean, it seemed at the beginning of the year, lots of room for optimism, the situation

around, around the Middle East, the oil price, obviously, will have an impact on us and

we can't avoid that.

Yeah, I think that it's, I mean, of course, we all find it very troubling.

I mean, I think it does depend, not stating the obvious, it does depend on how sustained

the crisis is, right?

And what that then means for fuel prices and then the knock on, you know, into the

rest of inflation.

So I think, you know, the prolonged crisis would, would I think be a much bigger bump

in the road for South Africa and for everyone else, frankly, in dealing with it?

Yeah.

Starting with Roger Dardine, I mean, I must just point out, he ran the company that owns

this radio station for a while, he was chair at first ran to, lots of experience in your

space.

You looking forward to that?

Yeah, very much so, very much so, you know, we were comparing notes a few moments ago.

It's been a good day for us, I think.

And you know, he's so highly regarded, so experienced, I think that the news has landed

very well.

And so, yeah, we're delighted.

Jury Straitham, good to chat.

Thanks so much.

CEO at Old Mutual 19 minutes after six.

The money show with Stephen Krutters on 7.02.

7.02.

News from Spa today, they're implementing what they call a voluntary severance program.

I mean, basically letting some workers go, you know, the context of this, that problems

with the implementation of that SAP software system, then their CEO resigned unexpectedly

about three weeks ago.

They last AGM saw a bit of pushback against one of the power, power that had been made.

The finance ghost is a retail analyst and commentator you have seen as work on money web,

daily, maverick, many other places.

And from now, for the first time on the money show, Mr. Ghost, good evening, thanks for

your time.

I mean, Spa has been through a rough time, but to let workers go, really, it might be seen

as a signal of something.

Yeah, it's a signal of a lot of things, and thanks for having me on the show, let me

just start there.

Look, these things never come out of nowhere.

I mean, I've been following Spa for quite some time now.

I've actually tried to buy into that turnaround and unfortunately, being pretty disappointed.

It's one of those things where every time you think it can't get worse, then it does get

worse.

And it really harks back to just when things started to go on for them in Europe, plus it started

to go on here, and then it felt like they were just putting fires out literally everywhere.

And unfortunately, when that starts to become the case for a company, eventually something

has got to give.

And it's stuff like trying to save costs that hit off as fine, but I think that it really

comes down to what's going on at store level, what's going on in the grocery market.

It's a huge struggle for them at the moment.

Spa is a shadow of the business that had once was, and they have a lot of work to do

to try and fix it.

We've heard some other commentary in the past about this, that one of the problems might

just be the structure.

It holds it back.

So a shopwright, for example, obviously the success story to compare everything to at

the moment.

They own most of their stores.

That means that they can sort of make sure and manage their delivery system for Spa.

Most of their outlets are sort of individually owned franchise system.

That makes that difficult.

I mean, is their structure sort of working against them?

So in the new world, it is working against them as we speak, but I'm also not 100% sure

that it has to work against them.

So being differentiated is not a terrible thing.

If I use the example of pick and pay at the moment, unfortunately, pick and pay feels

like just a bit of a bad version of the business that shopwright currently has, right?

They're not really differentiated.

They're doing all the same things.

They are trying to do on demand, et cetera, but they're not executing to the kind of

standard that works.

Whereas for Spa, they can actually do something different.

The joy of the franchise model is that they've got people who only stores often live in

the communities where the store is or at least they know the community well.

Why when you go to a spa, it's always interesting, a really great spa in my opinion remains almost

unbeatable.

It's got probably the best butchery and it's got stuff that reflects the area that you'll

find it in and it's own cultural nuances and what people are buying and you can actually

find the owner and tell that person what you like and what you don't like and ask for

something on the shelf, you're never in your life going to get that experience at Woolwoods

which is very much a stamp dart thing over and over again.

That's how they win and checkers is just this absolute efficiency animal.

So it is hard for them and the biggest issue why the franchise model is a huge problem

is because they just don't have access to store level data.

They don't have the ability to layer on a fulfillment engine like checkers 6060 and basically

say cool.

This is all our stores and connects all of them to customers.

It's far to you, I honestly, I think I've seen those vehicles on the road maybe twice,

whereas if you throw a stone at the moment you'll hit a 6060 person on a scooter, right?

Yeah, absolutely.

I mean, you just can't get in your car and not see them in some urban areas.

Okay, so what does management do?

They've got themselves into a hole.

They've been digging, unfortunately.

How do they now find a letter and get out of it?

Yeah, so I think it is at the differentiation point.

I think they've got to make sure that they get the basics right.

But the important thing to remember with Spy as the listed company, it's not the stores themselves.

The stores themselves are owned by franchisees and they can buy from anyone.

So actually, the changes from a listed company perspective, stuff like the voluntary severance

program you've seen, letting people go, they absolutely have to get their systems

implementations right.

I mean, their SAP or SAP implementation was truly awful.

It's going to go down as a whole of famous.

Ruined loyalty from the franchise these in KZN, which is a core region of strength for them.

They've had to get rid of some really tough international businesses where they basically

had to pay people to drag them away almost, or literally in the case of Poland.

So it's very, very tough from a whole self perspective.

What they need to do is they need to just, you can't turn around unless you've at least found the

bottom. But that's got to be step one.

It's just find the bottom.

Just stop drinking.

Stop getting worse.

You know, make the tough decisions, which it seems they're not doing.

New management in place and start to rebuild.

Get the systems right.

Get the loyalty right with your franchisees.

These people know how to run retailers.

That's why these franchisees work.

Supply them properly.

Get them their stuff.

It's amazing to me.

It boggles my mind that for a spa owner, they would rather buy from someone else in many cases

than the spa wholesaler.

I mean, if that isn't an indication that things are not going well, I don't know what is.

It really is a game of interest, retail.

It's a game of getting the basics right.

And that's where they need to start.

I mean, I don't want to personalize it, but we see the CEO going unexpectedly.

Yep.

We see various other people going before that, I think, particularly.

I mean, I don't know, but particularly after SAP, and because one follows the other,

doesn't necessarily mean one caused the other, I suppose.

Do you think they need to bring in an outsider?

I mean, I kind of keep looking at pick and pay and thinking,

Sean Summers, I understand why you brought him back.

I mean, I enjoy talking to him.

I don't know if it was such a good move.

Look at the interesting question.

I don't know, Riza, personally, I haven't engaged with him yet.

I hope to soon.

I don't think that necessarily it's a bad thing that they've got

and done the sort of internal appointment.

I mean, there's a lot of experience there.

I think what they just need is someone who's willing to do the hard yards.

It's someone who's tough.

It's someone who can come in and actually get it done.

I mean, obviously, it's a disappointment for everyone that they've now had.

A young CEO walking away under this guise of like,

okay, well, it's all too difficult.

I mean, fair enough, people's personal circumstances are what they are.

Yeah.

I always think that an entrepreneur can't do that.

No matter how tough my business is, I can't just say,

well, that was hard, guys, and then keep all the money I made in the last few years

and not have to give any of it back and just walk away.

It's such a life incorporate.

But they need someone who's going to do the hard work.

And I don't think they need to parachute in someone external necessarily.

I do worry a bit about that new role they've created where they're basically looking for.

I think they call it a managing director or food and liquor in South Africa.

I can't fully understand why they're creating another layer of management.

Why does they why do they need to do that?

You know, they shouldn't be spending time on anything other than

sparse South Africa.

Why do they need another person there?

That kind of thing worries me.

That's going to be what we need to see happen going forward.

Is how exactly will that play that?

If you speak to guys like Peter and Aubrey at the shop,

right, they are in the detail all the time.

And that's why retail CEOs can get paid a fortune.

Because they actually make a very, very big difference

through the organization that they run.

It's not like a banking CEO who's like steering the shop at a very high level.

Obviously a big role.

But the retail CEOs tend to get their hands dirty at store level.

Very interesting.

Finance, Ghost.

Thank you very much indeed.

Really do appreciate it.

The analyst and commentator known as the finance ghost on the money show,

27 minutes after six.

The money show.

The market.

Matete Tullare is at investing treasury sales and solutions.

Matete has been a while.

Welcome back.

Let's pick it up with spa.

I mean, quite an announcement of voluntary severance and voluntary severance program.

Yeah, I suppose also they're cutting jobs.

They're grappling with operational and governance challenges.

It's adding fresh pressure.

I mean, on South Africa's second largest growth that as you roughly said a few minutes ago,

saw the sudden departure of the, you know, see or last month.

But already the business was under strain from a costly and

sap implementation misstep.

There's been financial pressure and also tension with their independent retailers.

So they have said that they're going to start, you know,

this voluntary program as part of efforts to rein in costs and also stabilize performance

without necessarily.

Matete.

Even can you get me?

Yes, we lost you there a second.

Yeah, so look, they're not going to really be specifying which parts of the business

are going to be affected and how many jobs are being positive.

They have said that this program is a part of a broader reset

designs to align their cost base with the current trading conditions

and to ensure that they support themselves for future growth.

Old neutral.

I mean, quite strong adjusted headline earnings.

Obviously, different things happening in different sectors.

And of course, Roger Jardine coming in.

Exactly.

That was quite an interesting one.

I mean, if you think about Roger Jardine, he was previously at first round,

but also just from a numbers perspective.

Old mutuals, you know, they reported sharply higher annual profits.

I mean, they said that surgeon pretext profit was around 47% increase there.

You know, they 2025 results really reflecting an improved operating performance

in their life and savings businesses.

And also, old mutual insurance.

For me, the interesting part was the fact that they've declared a final dividend

of 56 rent, you know, up about 7.7 percent.

Also, as they said, I mean, Roger Jardine coming in from the 5th of June,

that is when the current transfer manual will be retiring as that HEM and then

Roger Jardine came in last year as an inexpect direct in September.

And then he will be assuming that role of chairperson from the 5th of June.

Stadio, the education group, they've been going great, guns, obviously.

They're still very, very aggressive, very optimistic about the future.

They seem to be growing very strongly and their earnings were up strongly too.

Yeah, look, I mean, their share price rallied about 6% today.

I mean, they reported about a 23% increase in headline earnings for 2025.

And also, rising the student numbers, I mean, in the first semester,

we did see about a 9% increase in student numbers.

And then in the second semester, another 7% also for them,

you know, they lifted their final dividend about 18 cents from about 15 cents.

And they're also planning a share buyback worth around 75 million rent.

Going forward, the group has also said they're very optimistic

in terms of reaching about 56,000 students by the end of this year.

Also, you know, then they're looking at about 80,000 students by the end of 2030.

My pleasure to laure.

Thanks very much indeed at investing treasury sales and solutions.

Good to chat again. Just gone 6.30.

What's up Steven?

On 072, 7.02.

1.702.

22 minutes to 7.

Well, I thought that was very interesting by the person known as the finance ghost about spa.

The idea that someone, an outlet, a supermarket that's locally owned can just do better than one

that sort of owns centrally. I hadn't thought of it like that in that way.

I'd love to hear your views. I mean, your experience at different supermarkets and why you go to

the ones you do. I have a shop right near me and I have a spa near me.

The spa is much closer to me, so my family and I spend a lot of time there.

There's a very big shop right quite close to us.

Let me go there too quite often, especially if it's on the way to certain things.

But just your sort of thought, you know, where you feel more at home, where you get

more attention from the people who are working there.

That kind of thing on 072, 7.02.

1.702.

I don't know if you heard what Guidamont Tasha, the minister of mineral and petroleum resources,

said yesterday, you're speaking at the big oil and gas conference.

It's underway in Cape Town.

You said a couple of very interesting things.

And when you consider the situation we're in, we're very worried about high oil prices.

Yes, we produce 30 to 35% of our own needs.

Thank you, Cecil.

There's another refinery that's working, but our refining capacity is very low,

partly because it hasn't made commercial sense actually.

For some people to restart, there's all to upgrade them to a newer fuel standards.

So the question I suppose, and I think Montauchy was kind of provoking an argument.

I think he's right to. I think we need to have this debate.

And I don't always agree with him as you know, but I think here we need to have the debate.

Look, he's keen and I understand the argument.

So oil prices are high.

We can't rely on where we get it from at the moment.

There's a big global rush for it.

Therefore, I think it goes as arguments and a paraphrasing here.

We need to explore here. We need to drill.

We need to have our own.

And he's confident they are resources.

That's fine. That's the one way of looking at it.

The other would be to say, go renewable and go hard and go now.

You know, Chinese electric cars.

They've got over capacity in their car market.

Bring them on.

Eskims improving so many companies now.

Every time we speak to people who run shopping centers or whatever,

they have their own renewable power because it's just cheaper.

So there are all sorts of ways to manage that.

I don't know if we're quite ready for that.

I must also say we're a big country by which I mean geographically.

And so the distances make electric cars very tough.

And you've heard from the person who runs the company that does this.

We're worths in most of their major centers,

use electrically powered trucks to deliver their goods.

So, you know, they're ways to do these things.

You're thought so, 727-217-219 minutes to 7.

702-219 minutes to 7.

Email him on Stephen at 702.co.z

16 minutes to 7 the time.

Well, over the last couple of weeks you've heard the results

from the major banking groups.

At PWC putting all the numbers together and combining the and calculating

that the combined headline earnings of our major banks grew.

But actually 9.4% between 2024 and 2025.

When you consider how busy 2025 was, different things, different risks,

different banks obviously doing things slightly differently.

If you consider the competition and all of the new entrants,

well, a whole industry 9.4%.

Yeah, not bad.

Francois Prinsler is the banking and capital markets leader at PWC Africa.

A Francois good evening.

Thanks so much for your time tonight.

Okay, as I say, busy 2025.

What were our banks doing right that on average allowed them to grow so strongly?

Good evening, Stephen.

Yes, and thank you for having me.

Yes, certainly as you've mentioned, the South Africa banks navigated

complex operating terrain to deliver solid results.

But as always, as you mentioned, in terms of all the risk and busyness,

we need to look at these banking results with a view of the operating

environment.

It took place certainly from a broader perspective.

Big picture.

We saw inflation moderate, interest rate cuts,

and GDP growth for 5th consecutive quarters in 2025.

We also saw South Africa removed from the fattest

gray list and the sovereign credit rating upgraded.

And all of that translated into better household and business sentiment domestically

and to recover in corporate fixed investment.

And for those banks that you mentioned that have significant operations in Africa,

we also saw compelling growth dynamics, particularly in the east,

while West Africa, large economies like Nigeria and Ghana,

navigated through currency and inflation volatility.

Globally, we saw the introduction of world-based US tariffs and significant

geopolitical turbulence that waited low down on investor sentiment.

So all of that really sets the scene for the major banks results.

And within that context, they really delivered strong performance.

As you mentioned, combined headline earnings 9.4% up on prior year,

which is significant outpacing domestic economic growth, which is great.

If you look at balance sheet as well, funding side, the deposits up 8.4 and lending side

up 5.8, which just gives the banks a much better opportunity to engage with their clients.

Good top-line growth, good cost control as well, the bank aim for 50% and they got there.

So over all of the very strong performance.

And Francois, I mean, if you've got lower interest rates,

I mean, it would stand to reason that quite quickly there'll be more demand for credit.

Households and companies would look to borrow again.

And that should mean more business for banks.

Yes, certainly, Steven.

And I think we've seen that coming through.

As I've mentioned, on the funding side, the deposits 8.4% up, very strong performance.

And like I said, the lending side also well up.

And on the back of that, good revenue momentum, net interest income and non-interest revenue,

resulting in operating revenue up 7.2%.

And positive jobs being created through that process.

And I think that the very dreaming bit is the return on equity,

which we saw coming through at 20%, admirable by any global standard, as we know,

and well above the cost of equity.

And I think what is very important looking at the result realistically is also the strong

management in terms of credit quality, with non-performing loans essentially flat.

So overall, in a tough environment,

a very, very good performance by the banks.

There's been a big move to digitization in AI.

And so there are plenty of digital banks now.

They don't have a physical presence sometimes.

Some of the newer banks, old mutual obviously, does.

And I know in the past, this sort of was anecdotal evidence,

our banking sector is pretty innovative compared to other markets.

If I recall, I could be wrong about this, you might know.

I think we were the first country to sort of have banks that would actually SMS you every time

something happened on your account.

I mean, that was science fiction compared to what other countries were doing.

Is it still the case, or are banks still quite innovative compared to banks in other places?

Yes, Steven, I think we've had the benefit of a very innovative banking environment.

Some of our banks have been implementing leading technology as of many years,

and if you put your mind back a few years ago,

I think some of our local banks have won global prizes for innovation.

And we continue to see that.

The South African major banks continue to complete intensely on digital growth,

with client acquisition and transaction volumes continue to increase,

driven by mobile first platforms.

To this end and to the point you rate, they continue to spend and invest

significantly in digital and refining their core systems.

And specifically across sort of three areas,

we've seen significant investment, cloud compute capability,

modernizing the payment and unifying systems across business segments.

And that will continue.

We are in the ear of AI digital and it's important to continue to invest and innovate to be competitive.

So, I mean, one of the things that's happening is that we see these massive power projects,

sustainable power across the country.

Those all need to be financed.

I mean, if I were a bank, those would be very interesting opportunities.

I mean, the market may even be saturated by now.

And banks like to put all of that kind of thing in their glossy brochures.

They do, they do, Steven.

And I think it's important to confirm that, you know,

obviously, the credit assessments are being done.

It needs to be eligible and projects of good returns.

But the sustainability in gender continues to be very important for all the banks.

And they continue to drive a range of implications.

You know, in the banks, I've continued to commit to ESG and those targets.

And they are aiming to balance good investment, good lending,

with responsible behavior.

So, I think we will continue to see significant investment and lending towards those industries

going forward.

François Prinsler, thanks so much for the thoughts.

Really appreciate it.

The banking and capital markets leader at PWC Africa banks.

Overall, as a sector in South Africa,

seem to be doing quite well, nine minutes to seven.

So, last week, you might have heard me making a comment about Black economic empowerment.

And I said, as a journalist, I find it quite frustrating.

There are so many people making the argument to gain speed at the moment,

including, as we know, the U.S. Ambassador.

But there are plenty of people in South African business,

plenty of people in the commentary, plenty of people in South African,

outside South Africa, making that argument.

And I shared that I felt frustrated that I hardly hear anyone making the argument for it.

And if I do, there are almost always from the ANC or a sort of ANC-aligned movement,

if you know what I mean.

And I said, I would like to hear from someone who defends it.

The risk for people who support BE, and let me just make this clear, and this is the point

that I was making, that if only the ANC defends it, and the ANC loses power,

or even just loses control of, say, the DTIC and the finance ministry,

well, BE itself might go with it.

That would be the risk for people who support BE.

Well, I'm pleased to tell you, someone who does support Black economic empowerment,

heard me, got in touch, and said,

they were happy to be the one to bring on the battle.

We're a Phil Wemman Echeng, how's it?

Good to chat again.

The Chief Executive of the Black Entrepreneurs Alliance.

You heard my comments last week.

How do you feel about it?

Is there a strong defense for BE?

Thank you so much, Steven, and good evening to the money show listeners.

Well, Steven, it's a difficult time that the critical economic crossroads,

and you'd appreciate, like you rightfully said,

and that debate is no longer whether transformation is necessary,

but how it must be implemented to deliver real, inclusive,

and sustainable economic justice.

Now, you made mention of the US ambassador,

and there will be the broad-based Black economic empowerment,

which came nine years after the South Africa got its freedom.

The historic imperative cannot be ignored, Steven.

Broad-based Black economic empowerment is not merely a political preference.

It is a constitutional and moral necessity

that rooted in South Africa's history,

and it's very, very, very important for us to appreciate that.

Now, the apartheid economy systematically excluded the majority of Black

Africans, which according to statistics,

the form 93% of the population mean the Indians,

the colors, and the Blacks are Africans.

Now, Drupal B speaks to ownership,

management skills, development, and enterprise development,

and you would know that, Steven, that to date,

a lot of Black people and Black entrepreneurs

are still economic spectators.

And this, because of broad-based Black economic empowerment,

and the preferential procurement policy framework,

not being adequately implemented,

and that's why the criticism is that,

no, let's get rid of it.

Because of the majority of people,

I mean, if you look at the white people,

just being 7%,

and if you want to do something that's impactful,

their numbers are low, are low,

and it's easy to really make a difference

over a small population,

whereby if you look at the number of Black people,

and also economic exposure to opportunities,

I mean, if you look at, even in the finance industry,

there's a lot of financial instruments that the bank has

to ensure that they can set people up for success.

One of the things that we believe

that broad-based Black economic empowerment should stay,

it's racial profiling in the finance,

and in the finance and banking sector,

the fact that Black people,

meaning Indian, color, and the African Blacks,

are still racially profiled.

They don't get the same interest rates

as their white counterparts,

and also they don't expose to financial instruments.

That sets them back, or rather, for failure.

I mean, I must just point out that this discussion's

been had before around that racial profiling by landers,

and they strongly deny that,

and we've had the argument with them in the past.

The criticism or a real way that that often comes,

is particularly for the big deals,

is that it's only people who are politically connected,

or people who are already empowered.

Would you reform any of it?

It's important, and Stephen, I'd like to agree with you,

and especially with the criticism

from the democratic alliance,

it's very valid because we believe

that double-p has delivered partial gains,

but needs reform, not removal.

And it is important to acknowledge both progress

and shortcomings.

Now, the achievements would be creation

of a Black middle class,

and a transfer of significant economic value,

I mean, you're looking at about C-Card 285 billion rent

in aliased alone, and that has ended seemingly,

there's no movement in that regard,

and also increase Black participation

in business and procurement.

Now, the challenge is the challenges, Stephen,

the elite capture, tender pre-nation,

planting and compliance manipulation,

limited impact on mass unemployment,

weak enterprise development execution,

as the Black and top pre-native alliance,

we are also advancing for for aggregation

of tender opportunities in the private and public center,

because if you aggregate them,

more people would participate,

and this thing of having opportunities

because of your proximity to power will be read,

and criticism that BE has benefited a few is valid,

but it leads to wrong conclusion.

That's why, like rightfully,

after solution is not abandoned BE,

but to deepen its broad-based impact

into a lot of people in the township.

I mean, you look at the Houghton province,

they got the Houghton Township Economic Development Act,

but no people have seen value in it,

and people that are in the townships,

and we are also advancing in favor

to the Minister of Trade and Industry to say,

you must also do a national township

and rural economic development,

so that when you start enterprises,

like you've had the Trim Limbo press, an example,

let's see more Black people benefiting in the value chain,

so that's what we're asking for.

We're a full way.

One of the things I find so interesting about it,

and sort of builds on the original point

that started this conversation,

is that so many people who I thought might defend it

are so quiet.

I mean, I would have thought,

if it is as important as you say it is,

you would see, you know,

everyone from Sakimagkozoma,

all the way through to someone who's benefited from it

in a small way at a bank,

out on the streets defending it.

I mean, where are they?

Steven, something that's set apart of Black people,

we like to defend our own corners

so that we can go to bed on a full stomach,

but economic stability depends on inclusive growth,

without meaningful economic inclusion,

inequality, fuel, social unrest,

and employment, raise instability,

investment, confidence, declines,

even critics acknowledge that post-apartheid policies

like PE were morally and strategically necessary

to sustain economic stability,

but now it seems like people not going out to the streets

to really vent their frustration

about being economic spectators,

they're just protecting their parade,

to say the fact that I'm employed,

let me protect my job,

I don't want to make noise,

because I'll disturb the status quo.

I mean, even Patras Motipa himself,

he benefited through NAFCOC

and also even Sandy Lezou

through the Black business council,

they, yes, they might, someone might say,

yes, they are making noise,

but for us, as people in on the ground,

we not seeing that noise

and also aggregation of 10 opportunities,

I'll throw a spanner in the wax,

you look at the loto.

If the loto was aggregated,

to say, okay, yes, not one company must win the loto,

but you aggregate it in all the provinces,

like all these gambling companies that are mushrooming,

you say in every province,

there's a black and taprines,

that's a consortium that are running the loto

in that province,

wouldn't we see inclusive growth,

inclusive growth, exposure,

and people growing their balance sheet

to eventually own the economy?

Rufo Emonocheng, thanks, really appreciate you coming on

and giving us the other side,

the chief executive of the Black Entropanurs Alliance,

and let me just say I'm always, I do,

and this is just a personal note,

and you can argue with me if you like, that's fine.

I always get a little nervous when one person

sort of says,

and I don't mean to argue with Rufo Emonanyway,

you know, we as this group or that group are like this,

I don't think you can really say that,

I think you go down a very difficult road there.

Anyway, I'd love to hear from you on all of this,

0-7-2-7-0-2-1-7-0-2 at 7 o'clock.

And now, the money show.

With Stephen Credet on 7-0-2.

Let's walk the toll.

The money show with Stephen Credet is brought to you

by Absor Corporate and Investment Banking,

proud sponsors of GTR Africa, 2026,

enabling trade flows for growth.

Absor is rigid at FSP.

Good evening, eight minutes after 7.

Well, discovery life, explaining today,

some of the payments they've made,

and some really interesting technology

for the early detection of things like cancer.

I'm sure you, in some way your life has been touched

by that disease, if not you,

someone you know, as someone in your family.

I'm really keen to talk about that,

talk about the screening of that,

Garrett Friedland, as the Deputy CEO of Discovery Life,

we'll hear from him in a moment.

Rotender and Dingwy, excuse me, Professor and Dingwy,

will be here in a few minutes.

I'm just turning around.

He's not in the office yet,

but I'm sure you'll be on his way.

Or we'll speak to him on Zoom, in fact.

He always has something to say about

what's happening in our content,

and then building your own portfolio

for investments, Warren Ingram,

focusing on that tonight.

What's up, Steven?

On 072, 702.

1702.

I asked earlier about your shopping experience.

Why do you go to certain supermarket chains and not others?

Hello, cravings, cravings.

Just wanted to comment on pick and pick,

you know, these are the time it didn't go.

I was just waiting for my wife to go to the checkers

and that they not decided to just walk in pick and pick,

loading to see the type of merchandise.

To be honest with you, I was actually impressed.

And with the quality and the prices of the merchandise

they have in there.

And I've actually become one of their customers.

I've been there for three times already.

I'm actually quite happy we put the selling in there.

Thanks.

Hello, just regarding where you feel comfortable

in whichever shop whether it's a spa,

checkers, pick and pay, whatever you.

Just a comment on checkers 60, 60.

I just always get a little bit frustrated in their shop

because the 60, 60 people are pushing trolleys up and down

and almost bumping out the way.

They seem to get priority everywhere within the shop.

And I just feel that checkers should be regarding

their in-shopping or in-shop customers

with a little bit more priority.

You know, I understand that the 60, 60 people

have got a obligation.

But I feel that it's to the detriment of the shop

is inside the shop, which makes me hesitant

to go to that shop.

Thanks, John.

Cheers.

Thanks so much for that.

Such thoughtful comments, actually, and so interesting.

I mean, I know people who've had experiences

of buying clothes in that shop and have said some of the things.

I'm sure everyone has their own view.

And then, yeah, I mean, also, you know,

you don't want to be bumped around.

I'm always slightly surprised that even in a supermarket,

and I realize there might be a storage issue,

the checkers 60, 60, 60 shoppers are kind of in the same space.

You would think maybe it would sort of,

they would have a kind of most likely items or something,

and those would be kept somewhere else for very quick dispatch.

It would be actually more efficient for the delivery drivers

to keep certain, often delivered items,

slightly separate from everything else.

On the other hand, the shops that they have,

I'm sure, went design for that.

I mean, they'll probably come.

Some very thoughtful comments there.

Thank you, 11 minutes after certain.

7-0-2.

7-0-2.

Steven.

Is on X.

Add apps, Steven.

Discovery life's saying today,

they paid out 11 and a half billion

round to clients last year,

but doing quite a lot for the early detection of diseases,

new claim starter shows, AI's helping doctors to take cancer.

And now, the serious problem's a lot earlier.

Obviously, that helps them in the longer run,

reduces costs.

But more importantly, we'll keep you alive.

Gareth Friedland is the deputy CEO of Discovery Life.

Gareth, good evening.

You paid out, I think it was nearly two billion

round for severe illness benefits,

nearly another billion round for capital disability benefits.

How important is that kind of product,

sort of ensuring for events that happen

while you are still alive?

How important is that becoming for your industry?

Yeah, that's right, Steven.

And I think we've definitely seen that trending upwards,

certainly in our claims data over the years.

You know, you want tens of think of life insurance

as just kind of payouts when you die.

We paid 3.1 billion to life cover clients.

And actually more than that, as you mentioned,

through things like severe illness,

income protection, disability parts.

So about 52% of our risk benefits

went to clients who are still alive

for events that happen to them during their lifetime.

And that is, you know, obviously,

becoming more and more important as people live longer.

And I exposed to different events

throughout the different phases of their life.

I mean, obviously, we sort of,

when we think of events like this,

we tend to think of cancer.

There are others, of course.

And if you detected much earlier, you can treat it.

And what I presume you're trying to do,

Gareth, is screening it at quite a mass scale

in a way that would detect it much earlier.

How do you go about doing that?

Yeah, that's just even, and it's broader

than just cancel your life.

That cancer is one of the, you know, most prevalent

categories of disease.

And obviously, something we really focused on,

I'm trying to detect earlier and treat better.

But what we've developed in the group is what we call

our personalized health pathways.

I mean, that really kind of synthesizes

all the data around the clients, their propensities,

their health data, their records.

And kind of works out based on each individual

client's health profile, what is the next best action

that they should take for their health?

And then we throw incentives at them to do that.

And through that program, we had 18,000 clients

go for screenings across the different types

of screenings last year, and actually 47 of those clients

ended up in severe illness claims, 32 of which

were actually early stage cancer claims.

So if you think about that, it's an unbelievably powerful

capability.

We've got an AI mechanism that's picking out a client,

telling them we've worked out, you need to go

for this cancer screening, and they've actually picked up

and detected cancer early and saved the life

with their kind of AI insight there.

I mean, some people are quite nervous to be screened,

and they want your product, and I'm sure after that,

once you have them in your clutches,

Gareth, you encourage them gently,

nudge them down the road for a screening.

My serious point is that more people are probably

being screened as a result of your product.

Absolutely, and that's a great thing.

So we are, in sensorizing clients to be screened,

and that does pick up the cancers earlier,

the prognosis are much better if you can treat,

you know, if you can detect earlier

and start treatment earlier.

And obviously we've got a product that then lives with them

for life, you know, to get yourself covered,

go for the screenings, you'll get payouts,

and then multiple payouts, as we've also started

to see become more and more prevalent in the data.

Well, I mean, isn't that also a reflection?

If you get one serious thing,

you might well get another, often as a complication,

and as people, you know, unfortunately,

things can sort of pile up at a certain point.

And that must be, I mean, quite expensive for you,

very important that the patient, the person,

your client, whoever, is being looked after in those cases.

Yeah, absolutely.

I talked to one of the key outcomes

of the statistics that we released today,

which is around multiple claims, multiple health events.

You know, prior to last year,

4% of our book had claimed under the surveillance benefit,

that 4% accounted for 22% of our claims last year.

So you can see, once you've had a claim,

your probability of claiming again, as you mentioned,

and particularly for related conditions,

goes up sixfold, 600% in the next year.

So that's starting to play out incredibly strongly in our stats.

And while you're right,

it might result in more and more claims for us.

It also results if you can pick them up earlier

in clients living longer.

And that's obviously better for them

and better for us as a life insurer in the long run.

I mean, one of the things that this kind of the

modus operandi of the discovery group

is to encourage people to be healthier.

So, you know, cappuccinos for exercising,

exercising fine, but a cappuccino, seriously.

Is there a lot of uptaken that?

I mean, one of the ways you do it,

is you sort of pay back some of the premium

if they do things that make themselves healthier.

Yeah, that's right.

We call it our shared value insurance model, Steven,

and it's really become incredibly powerful

and refined over the years.

We track it obsessively.

So last year, we found that our most engaged clients

in the vitality program were actually demonstrating

a 73% lower mortality rate than the rest of the book would.

Likewise, with more morbidity, 45% lower.

So, you're seeing genuine changes

in those clients' longevity in their morbidity

and mortality rates.

And that creates money in the system as a life insurer.

And we then pass that money back to the clients

through the payback benefits,

through shared value benefits.

And we paid actually 2.4 billion

around last year alone to clients just for being healthy.

That really is a kind of paradigm shift

in the world of life insurance.

Gareth Friedlander, thanks so much.

Deputy CEO of Discovery Life.

I ain't just interesting to see how the business is changing

and what's kind of working.

Your experiences, please, 072, 702, 1702.

7.02.

7.02.

Steven, it's on the money shelf.

6 to 8 pm.

There was a report on, I think it was from 24 today

that the Competition Commission

wasn't parliament yesterday.

And they said they're looking at probing the decision

by Canoe plus to shut down showmax.

And from what I understand, what they're saying,

is that when Canoe plus was given permission

to merge to buy DSTV, they made certain,

they gave certain undertakings.

People wouldn't be, people wouldn't be a retrenched.

They wouldn't be wholesale changes, that kind of thing.

And I understand that.

I have to say, though, I don't always disagree

with the Competition Commission just sometimes.

But if I were running a business

and there was a section that had just no business case

and everything I've read about showmax

is there's no business case.

I mean, don't get me wrong.

Probably like you, I'm a long time subscriber of it.

But there's no business case.

It's been losing money and I've a fist

and probably worse than that.

And now you're being told, well, actually,

maybe you won't be able to shut it down.

Yeah, I probably wouldn't take that line down.

I'll probably pretty annoyed, actually, if that happened.

I realize there could be consequences.

Now, sure, Canoe plus has been very clear.

No jobs will be lost.

And that's probably to comply with the undertakings

they gave to the Competition Commission.

It seems on the letter of law

that I don't know what the other case

of the Competition Commission would be here.

So I'm all for competition.

I'm all for a strong Competition Commission

to do this kind of thing.

But as I say, if I were a business owner

and there's no business case to keep this thing going

and it's losing as much money as showmax is,

now someone comes and says, actually,

I don't think you can shut it.

We won't let you.

Well, I'll be pretty frustrated at that.

Look, it may not happen.

They may sort of do a preliminary investigation

and think that's that.

But I just thought, I wouldn't get,

I wouldn't get two and two, you know,

whole divisions being closed

because of no business sense of

I were the Competition Commission.

Good money show.

African business focus.

Professor Ritindor and Dinguie,

pounding director,

a tribe African advisory author

of the book, Rumble and the Jungle Reloaded,

joining us now.

How's Ritindor?

Week's been a long time.

Very long time.

Yeah, good, good.

The Middle East conflict,

I mean, so many things we've been talking about,

the impact, particularly on oil prices,

but also having an impact here,

Kenyan meat exporters.

Yeah, Steven, so another element,

obviously just showing the public

picture of the Middle East.

Kenya exports about 2.3 million US dollars

of beef across to the Middle East.

Well, in terms of meat and the related products

from that perspective,

that's 2.3 million on a wheat basic

descent across to the Middle East.

It, it, it, it,

it confessed about 200,000 metric tons a day.

It's dropped significantly.

I think at the moment,

you know, the exporting from that 20,000 metric,

200 metric tons in the exporting about 50,000 cases.

The significant drop in the price of logistics

that transfers quite high,

50% of the exports from Kenya to the Middle East.

Go through Dubai.

So Abu Dhabi in Dubai,

I still feel a significant amount of demand

to buy.

And it's all because of the dynamics of the media and the investigation around that.

So you can imagine from an ecosystem agricultural perspective, the impacts of that.

And also I think the unified PKG has moved from about, in terms of logistical needs, from

a $1 feature of a $3.50 per unit.

So it's more than doubled.

So all you all see then, the ramifications of the conflict in the middle east,

where it not just affecting your oil prices, but directly, so it was something like agriculture

from an Africa perspective.

No, sure.

I mean, there's so many different impacts on this.

And then in Nigeria, that don't go tear refinery, they're supporting oil there.

I mean, we have Cecil here, thank goodness.

We want to buy oil.

We do buy oil from Nigeria as well.

Yeah.

So I think this is one of the positive side again, because obviously oil, Nigeria is the

native capital of oil, even though they manufacture it and they produce the crude oil and export

as well.

But another positive side in this perspective, even then going to build a refinery, remember,

he went through a bit of an uphill task with the local computers, with local rigging

to the frameworks, but it's actually saving them now because they produce about 600,000

barrels of crude oil per day.

They've been able to slice their pricey for diesel and gasoline by 9% to accommodate the

shortage that's coming from overseas.

So this is just a typical example, speaking, that when Africa sets itself for industrialization,

when we produce from the extractions and the raw material is caught up in the continents

and puts infrastructure on that, when the rainy day comes, it does help us.

And in the case of Nigeria, it's helping them to sit and extend.

And they still have to fight the regulatory frameworks that are costing them a bit more

and the argument is like, it has to actually be cheaper.

But ultimately, the positive story in the bleak storm of the Middle East and the ramifications

in terms of Nigeria, producing its own oil to supply, to supply its illegal consequences.

I mean, I suppose the other thing is, if you're the Dengolta refinery, this is your moment

to really get market share.

I mean, if you're able to sort of sail it as, sail it as, you know, we save the nation.

I mean, this is really the moment, especially when they're just isn't supplies from other people.

Yeah, but you can only produce and manufacture it even based on the infrastructure and the capacity

that you have.

So you are limited by perspective, but definitely, it's a good problem to have in terms of,

is a huge demand.

I think it also just highlights just from that region as well as world and other oil crude

manufacturing players.

I'm talking about countries like Angola, it's also got infrastructure.

Again, you know, there's that African Corp, which is not a pattern, the car with the market

places.

So on the day of the opportunity, if you haven't set up the infrastructure and the resources

properly, you obviously won't benefit.

So fortunately, for Nigeria, I think the right place, they couldn't put in more infrastructure,

but unfortunately, they're still building that still in the bigger picture of things,

a good place to do.

In Verundi, there's this big minerals deal.

It sort of involves AI and Bill Gates and Jeff Bezos.

So the company is called Corbots, and I think this highlights, I talked about how Corbots,

which is backed by both Bill Gates and Jeff Bezos, is an AI based company that allows

you to determine where the deposits of minerals are.

And they struck a deal with the DRC billion dollar deal to be, to work with the DRC in terms

of identifying the deposits of each of these minerals under the ground.

So your co-bots, your co-pots, et cetera, et cetera.

They struck a similar deal with Verundi.

It's a three-year deal.

The upside of being so obviously, they're just supposed to be winning identify minerals

under ground and obviously that benefits Verundi as well as them as a technology company.

In the rest of Verundi, obviously, they have a certain ownership of where those maps

are from a geomorphic perspective.

So hopefully the negotiations with regard to that deal is a win-win because on one side

it looks like a great opportunity, but in the past Africa has never really come out

of the positive side in terms of such a strategic deal.

So let's see how it goes.

The deal is elastic for three years and they're out there to create.

And it's technology, extractives, minerals, and government policy are coming together under

one belt.

So it's something close to watching see what the outcome's on.

There's been a lot of a big look at the latest egg tech startups in Africa that have raised

quite a lot of money.

I mean, I must give some optimism for the future.

Egg tech team, as you know, the agricultural sector contributes over 60% of Africa's employment

as well as over 60% of the Arab world, Arab land in the world is an African government

agriculture perspective, it's a huge opportunity.

In 2016, 2025, the business inside the Washington analysis and they highlighted that over $15

million dollars has been invested in terms of the egg tech market and that opportunity

continue to grow from a year-to-year basis.

It drops slightly over the past few years, but still the significant growth.

The key sort of using player at the top five feed techs or egg tech companies that have

attracted investment, Steven, are two girlfriends, which is in Kenya, what's so called, which is

in Kenya, next April, Egypt, grow international, Ethiopia, and Apollo, the Nigerian, I think

close to the, in terms of the bigger size of the investment, close to over half a billion

US dollars.

So something for Africa, they don't want to play technology, but also produce food and

create employment, which is all-positive.

And then France, finally, a returning, it's called a talking drum and it was looted

from Cotte de Voix, gosh, a long time ago.

It's called, the name of the drum is called GD Ayoroke and the size, even of this drum,

is 430 kilograms and it's four meters long.

It was used to communicate celebration, date, or even danger.

And obviously, during the colonial period, people used to use the communicator against the

France, maybe that was the one, the colonial power at the time.

So it was confiscated and taken all the way to France, in the Jacques-Sirat Museum, a hundred

years ago.

It's brought back to a big celebration that has happened in Côte de Voix, to celebrate

it and please didn't want my clone, it was rather, it was facilitated for this.

But still, if you think about it, see them, a big drum that's half the time and four meters

long is finally coming home to this.

Obviously, I can imagine at that time how the effort that was required to transport this

aspect all across the world by coming back again, but all know, from a cultural perspective

of IT, and quite excited for the people of Côte de Voix is celebrating that culture coming

back home to this.

Indeed, Professor of Tendour and Degree, thanks so much, really appreciate it.

And of course, the founder of Tribe Africa Advisory, 28 minutes after seven.

Personal Finance with Warren Ingram.

24 minutes now, to eight the time, as you know, Warren Ingram, a certified financial

planner at Galileo Capital, I was at Warren, so tonight we're talking about how you build

your investment portfolio.

And I have to say, at first kind of thought, side blush, it sounds to me like quite a complicated

thing to do, is it?

If it was complicated, I wouldn't be able to do it, so no, the answer is we can make

it hugely complex, but we can also all make it very simple and ask ourselves a few questions

and cut out a whole lot of noise and actually get it done reasonably easily.

OK, so I mean, we first need, I suppose, we started first principles here, we need to

know why we're doing it.

And again, my first thought would be to make money.

You need to be a bit more refined than that.

It's unlike a teenager.

So we do.

I mean, I think when we set a goal for our money, the goal determines so many other things

and it becomes the original domino that takes you in a direction or stops you going in

a direction.

And so, let's take a couple of examples.

If you said, well, I'm planning to buy a home in five years' time, then we know a few

things about that goal, one, it's a definite period of time, it's five years, two, you

need to save a certain amount of money by that time.

So you can't allow for wild outcomes, you can't allow, for example, where you were aiming

for, let's say, it's a million round and you choose an investment that could deliver

you two million or half a million.

You've got a finite period of time and a specific goal.

The alternative would be that I'm saving for my retirement in 20 years time.

Well, then you can allow for a lot more variability in your returns in the short term.

In other words, you can choose an investment that's mostly in the stock market and if it

goes crazy like it is at the moment, then that doesn't matter too much because you've

still got another 19 and a half years to go.

So your goal is absolutely critical because that's the thing that determines how long you've

got to invest and from there, once you know, and the jargon for that is your time horizon.

So once you know your time horizon, you can start to make some very sensible decisions

but also ignore many of the other options which become irrelevant to you.

So is there a kind of guiding line or a rule of thumb or something that would sort of

help you once you've worked out how long you're going to be investing for once you've

worked out your time horizon?

Yeah, I think, you know, sometimes the mistake people make is that they've got a very

short time horizon and in other words, they're saving for the next year or one or two or

three years and I think three years for me is short, short term.

And when you've got that very short time horizon, you can't invest in growth assets and

typically growth assets would be the stock market, property investments and the like because

you need to give those a long period of time to deliver the growth that you're expecting

but equally to ride that roller coaster of the markets where your investments will go

up and down and do it repeatedly over a period of time.

So the longer your time horizon and I think, you know, long term starts kind of maybe

around seven years and longer, then you can invest mostly in growth assets, but when

your time horizon is very short, then you're looking at things like many market funds,

income funds and the like.

So it's a very low risk, yes, low return, but it gives you a lot more certainty which

is what you need when you've got such a short time horizon.

Okay.

So this I suppose is about your risk tolerance, right, and about how you feel when markets

are doing what they're doing right now.

Yeah, it's, you know, it's pointless, you know, if you and I were chatting and you said

to me, well, this goal is for 20 years time and I said to you, okay, that's great, even

I'm going to invest 100% of your money in the local stock market and the global stock

markets.

I mean, you know, planning wise, that's not a bad thing to do, but I need to ask you

the follow up question, which is how are you going to behave when the markets do fall

apart because they're going to do it many times over 20 years.

And if you are tempted or maybe even driven to sell the first time you see your investment

go down by 10 or 15%, then, you know, a pure stock market investment is the worst possible

thing we can do for you because you're going to be in a position where you're going to

sell probably at the bottom of the market.

And so risk tolerance is key when making investment decisions.

If you know your time horizon, then you have to be pretty honest with yourself to say,

I would like to be brave and I'd like to be rational in calm and all of those things,

but what I know is I can't.

I become panicky, I look at my statements or my profile all the time and I make sure

to decisions usually to my detriment.

And if that's the case, then you start to lower your exposure to those growth assets

because those are the ones that give you the roller coaster ride.

And so you start to say, well, I need to bulk up things like cash and bonds.

And maybe they're not the best growth assets, but they're going to mute that stock market

roller coaster.

So your risk tolerance is really key.

And unfortunately, it is an emotional thing, it is a psychological thing.

So it's not like a point scoring system where you can say, well, I'm a sophisticated

investor.

I know I'm not emotional.

We're not robots and it's a hard-wired response.

So I think that this is probably where a lot of the time people derail themselves with

this, not understanding their own tolerances.

So I think your psychological tolerance for risk is important.

And then maybe one that doesn't get spoken about so much, but your financial ability to

deal with losses.

So if you've got a 20-year time horizon and you think everything's fine, but actually

you've got no ability financially to deal with a risk.

Something goes wrong in life and you need to draw on your investments.

And suddenly they're down 20 or 30%.

It means you didn't have the financial capacity to deal with the risk.

So risk tolerance is two things.

It's your psychological tolerance.

And then also your financial capacity to deal with those risks.

Your emotional tolerance, that's quite a difficult thing to know about yourself.

You could probably set down and quite sort of objectively work out your financial capacity.

But your emotional tolerance, you're really asking a question about yourself.

Yeah.

And you know, it is very difficult.

I mean, there's an entire field of behavioral science around this.

And it's where investing goes from being a science to an art because you have to make

a judgment call about yourself.

You have to exercise something, you know, that's not scientific to say, well, you know,

I know myself.

And when I lose money in the short term, I do get really angry and depressed and jittery

jumpy.

And if that's the case, then you need to reduce your exposure to risky assets, which are

unfortunately also the growth assets.

So I think the important thing here, though, is it's not all or nothing.

It's not that you say, well, I've got very little tolerance for risk there.

Or I can never take risk.

What happens now is you move yourself from the spectrum of being 100% invested in shares

to potentially maybe only 50%.

Because you then know that, well, you've got a solid chunk of your money that's in very

low risk, very conservative investments that will protect you from yourself and also

from that big market rollercoaster or volatility is what the jargon would be.

Then you've got to, okay, so you've done all of that.

And now you've got to look at the right kind of account.

And that, I mean, this is where the jargon starts to come in a little bit.

And as soon as we start talking about investments, I start to think about tech.

So where do we start?

Yeah, I think it's interesting because a lot of the time, this is actually where most

people would start the conversation around the investments.

They would look at the product first and not really think about why they're investing

or goal setting and then the risk tolerance is et cetera.

So talking about your product third, I think is important.

You need to go through those first two steps.

And then you could say, well, okay, I've got a long-ish time horizon.

So I know that I can invest in growth assets.

And if you've got 15 or 20-year time horizon, then it means that you can

absolutely maximize your tax-free savings account.

Because that's the one very nice long-term investment that size gives us where we don't

pay tax when we put money in and we don't pay tax on the growth or when we take money out.

And I'm just remembering now, I think I was going to tell you that it was 36,000, but

it's actually jumped up now to 45,000 or 46,000 contributions that you can make to tax-free.

So for someone who's looking to save, this is like almost the first step.

And maybe you do this in parallel with your retirement annuity or provident fund.

So I think that maximizing a tax-free makes all the sense to me, but it is your long-term

investment.

If you've got a very short time horizon where you need to save money for one or two years,

then it's pointless putting in a tax-free account because you use it and lose it.

In other words, if you put money in and you draw that money out, you may not top up

that contribution again.

So it says to us that we can only put in 500,000 ran over our lifetime.

And so if you draw out 100,000, that means you can only ever put in 400,000.

So tax-free is a great for long-term, RAs or provident funds, great for long-term.

But if you've got short-term money, then you're looking at something like a unit trust

or a money market fund or an exchange-traded fund.

Something that you can buy and sell relatively quickly and relatively efficiently.

And an R-A, a provident fund?

I love those, you know, understanding that SARS gives us a very nice tax break when

we make a contribution to our retirement funds.

And then also that all the growth inside those retirement funds is tax-free.

So you get two very significant tax benefits by contributing to retirement funds and also

remembering now that you can invest about 45% of your retirement fund can be globally

invested.

So you're getting very good diversification.

The only downside is there's sort of lock-up rules which is you can't really access a lot

of the money, you can access a portion of it.

But the bulk of the money you'll only be able to access from age 55 onwards.

So again, the product needs to align with your time horizon.

This is something that you choose for your long-term investments, but not your short-term

investments.

Warren, we've got a question from Tammy.

She says, I've just been told I'm going to be a retrench soon, I'm getting a retrenchment

payout.

How do I make it last while I'm looking for a new job?

Such an interesting question.

Your questions too for Warren Ingram on 07272-1702, back with Warren in a moment.

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The money show personal finance with Warren Ingram 10 minutes to eight the time.

And of course, we've got a question for you Warren from Tammy saying about to be retrenched.

I'm getting a pound.

How do I make it last while I look for a new job in a very tough position to be in it?

At least she's thinking it all through.

Well, what a horrible tough situation to be in.

And when you are faced with this kind of a financial emergency, let's hope it's not a crisis

and it's just an emergency.

Then a couple of comments, one, it's very important to kind of go into financial triage where

you start to make very tough financial decisions as early as you possibly can.

Your psychology here is I'm in a position where I've got to make the most difficult decisions

possible and I should do them very quickly and very early, not late when I've run out of all

of my options.

And so just thinking about things like if you've got big car repayments and it's a car you can sell

and at least not have this big car hanging over you all the time where you've got to make

this big payment and you don't know where the money is going to come from, then it would be

decisions like that or you owe money on a credit card and there's the potential for you to settle

the card, also something to think about.

But I think the starting point is face the reality and then second one will be your prospects

if you are a trench and usually retrenchments don't happen in a day or in a week.

There is a little bit of time the company starts talking to you and consulting with you

and I would also suggest you've got to be incredibly proactive about looking for a position.

If it's likely that you get a position quickly then maybe you don't need to make very radical

decisions immediately like selling your car. But if you are uncertain or you think there's a small

chance of getting a new position quickly then you've got to say I'm in a crisis right now I've

got to make very tough decisions now because I still got choices and so then I would say

it's cutting your costs as fast as you possibly can and making sure that you're paying the absolute

bare minimum stuff. How can you eliminate the unnecessary from your life as quickly as possible?

Cutting streaming services, subscriptions, all of those things, you need to do that kind of

radical cut right now and there is no cost that's too small to look at in a situation like this.

I think you start with your last three months of expenses and you say obviously I need to eat,

obviously I need to pay my medical aid, I need to live somewhere. But pretty much everything

else can be negotiable. The one thing I would say though is be very careful of doing things like

cancelling your medical aid or if you've got a car and it is paid off and you're going to keep the car

don't cancel your car insurance because those very big risks are the things that could wipe

your art the very next day when you then have a car accident or a medical emergency.

Yeah I know that makes so much sense for now and I like the advice about start now the more you do

now the better options you have. Alright so building our investment portfolio and we've now

we've worked out what sort of a country we're going to have but we have to decide on our asset

allocation and this surely is a crucial decision on this road.

All the research I've ever seen says that it accounts for about getting the mix of your assets

right in other words that combination of property cash bonds and shares. If you get that decision

right that will be about 90% of the reason why you will be successful and if you get that decision

wrong then the 90% works against you that will be 90% of the reason why your investments don't

pay not so it is an absolutely crucial decision and I think you can split these into you know two

broad categories growth assets and and then secure assets so secure assets are things like cash and

and you know decent government bonds you know I'm not sure I'd go and buy them as well in bonds

for example I'm not sure that those are low risk but but those are your low growth but but secure

and then your high growth but very volatile assets would be would be the stock market and the

property market and and so you do want to get growth you do want to grow your assets faster than

inflation so so bias you know having a bias in your investments to the growth assets makes sense

but but you do need a spread and that you do need that that beloved D word the diversification

so you need to make sure you've got a spread across all of them and and then don't forget that

you're spreading them inside Africa and globally as well and if you get that spread right when we do

get some kind of an unforeseen event like we're seeing now in the Middle East where something just

happens on a Saturday or Sunday and it derails your portfolio if you have a good spread of assets

it gives you a huge amount of protection compared to someone for example who just buys

textures and suddenly they fall apart you know drop 50 or 60% in a short period of time that's when

you get the asset allocation wrong and how complicated should it be I think we should make life

pretty simple I mean I think you can choose two or three funds you know with you say I'm going to

buy balanced fund in South Africa and a balanced fund overseas and maybe you just have two funds

and and you know if you do that consistently and and and simply simply I think you can get very

good diversification with art having to to build a complex portfolio that you're managing 24 hours

a day instead of you know living and working okay so now I've invested and now I've got the app

looking at the stock market every day how should I behave now you should behave as if that doesn't

exist that you that you don't have an app that you don't have a portfolio and and you know miraculously

only every six months do you somehow remember that you've got this thing and then you look at it and

you check it but for the rest you should you you should you know have a have a correct structure

and then let it do its job investments do incredibly well when you don't mess around with them and

change them all the time and it's the thing that people do unfortunately is they get emotional

because there's an event their social media screaming at them their friends tell them that the

world is ending and then they start to look at their portfolios and and adjust them so so I would

say the the the the the less you can look at the portfolio the better and and secondly what can

you do to to automate your savings in other words can you set up debit orders to go into your accounts

that are appropriate and you don't have to think about them every month you don't have to you know

consider what's going on in the world you just say on the second of every month I know I'm adding

to my investments I know they're a correctly positioned and in six months from now I'll have a

look and make sure everything's okay and six months they're off I'll do it again but but the

the the less you can look at it and the less you can worry about it the better your your investment

returns will be over time okay so um you basically need I mean what's the phrase about you need time

in the market you've got to put it in and keep it there yeah it's it's such a cliche and unfortunately

there isn't a better one so so you know understanding that the longer you let your investments remain

in the in the markets doesn't matter that they're incredibly volatile that the better it will be

for you over a long period of time it is actually impossible to become you know a legendary market

timer that you know legendary market time is you see them in the movies they're not in the real world

and there might be one or two people that are incredibly lucky from time to time but for the bulk

of us if we want to do this simply and we want to be sure that we're going to get good capital

growth leave your investment correctly structured don't worry about their market drops they're all

going to happen a lot and and just give your portfolio time to grow it's it's that the power of

compounding is is leaving things alone for a long period of time well and grim thank you so much

really appreciate it financial advisor co-founder at Galileo capital on personal finance tonight

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well US markets turning positive tonight despite all of the sort of fears and concerns and all

the rest of it the Dow Jones is up 0.29 the Nasdaq's up 0.5 for the S&P 500 is up 0.44

plenty of time for things to happen before we talk to you again tomorrow about follow

Warren's advice and leave your investments alone back tomorrow good evening Ed