WEBVTT

1
00:00:00.372 --> 00:00:03.113
You're listening to Strictly Business
Podcast

2
00:00:03.373 --> 00:00:05.373
with Lindsay Williams.

3
00:00:05.574 --> 00:00:08.134
For the first time since the COVID-19
pandemic,

4
00:00:08.215 --> 00:00:10.215
major central banks,

5
00:00:09.335 --> 00:00:11.335
including the US and South Africa,

6
00:00:11.876 --> 00:00:13.876
are cutting interest rates.

7
00:00:13.416 --> 00:00:16.337
With the global and local rate cutting
cycle now firmly

8
00:00:16.397 --> 00:00:18.397
underway,

9
00:00:17.077 --> 00:00:19.818
what are the implications for the SA fixed
income

10
00:00:20.198 --> 00:00:22.198
investors?

11
00:00:20.818 --> 00:00:23.379
With me now, Malcolm Charles, Portfolio
Manager,

12
00:00:23.459 --> 00:00:25.800
Fixed Income at 91 in Cape Town.

13
00:00:26.140 --> 00:00:28.242
Before you answer that question, please,
Malcolm,

14
00:00:28.262 --> 00:00:30.262
let me just give a very,

15
00:00:29.303 --> 00:00:32.085
very brief summary of what's happened in a
very busy

16
00:00:32.185 --> 00:00:34.185
time.

17
00:00:32.745 --> 00:00:35.268
Yesterday, that's Wednesday, the U.S.

18
00:00:35.348 --> 00:00:37.990
Federal Reserve cut interest rates by 50
basis

19
00:00:38.070 --> 00:00:40.070
points.

20
00:00:38.750 --> 00:00:40.750
A little bit of a surprise.

21
00:00:40.412 --> 00:00:42.412
Bank of England, not a surprise.

22
00:00:41.953 --> 00:00:43.953
They left interest rates unchanged.

23
00:00:44.015 --> 00:00:46.877
Tell us what happened in South Africa on
Thursday, please.

24
00:00:47.878 --> 00:00:50.720
Yeah, a bit of good news in line with our
expectations,

25
00:00:50.720 --> 00:00:52.720
a 25 basis points cut.

26
00:00:53.142 --> 00:00:55.142
So, yeah, joining the bandwagon.

27
00:00:55.612 --> 00:00:58.033
of interest rate cuts that the Swiss
actually started.

28
00:00:59.574 --> 00:01:01.574
We've seen, you say,

29
00:01:00.934 --> 00:01:02.934
Bank of England kept rates today,

30
00:01:02.835 --> 00:01:04.835
but they cut at the last meeting.

31
00:01:04.776 --> 00:01:07.437
And we're in that trend where we're going
to see more

32
00:01:07.497 --> 00:01:10.358
cuts from all the mentioned central
bankers,

33
00:01:10.858 --> 00:01:12.858
including ours.

34
00:01:11.659 --> 00:01:13.980
So the outlook, broadly speaking,

35
00:01:14.360 --> 00:01:17.141
is pretty positive and good

36
00:01:17.201 --> 00:01:19.201
relief for economies.

37
00:01:18.842 --> 00:01:20.983
Yes, broadly speaking, we'll come to that
in a moment.

38
00:01:21.623 --> 00:01:24.304
But what is the outlook for global and SA
interest rates?

39
00:01:24.684 --> 00:01:26.684
and inflation.

40
00:01:25.564 --> 00:01:27.564
Of course,

41
00:01:25.925 --> 00:01:28.846
it should really be inflation and global
interest

42
00:01:28.926 --> 00:01:30.926
rates.

43
00:01:29.186 --> 00:01:31.667
What can we expect if inflation behaves
itself?

44
00:01:32.327 --> 00:01:34.728
I think you're going to see different sort
of

45
00:01:34.888 --> 00:01:37.009
outlooks across the regions.

46
00:01:38.350 --> 00:01:40.350
The US, obviously, that's the big news.

47
00:01:40.630 --> 00:01:42.630
The 50 basis points we got there,

48
00:01:42.991 --> 00:01:45.873
we had an inflation scare earlier this
year

49
00:01:46.033 --> 00:01:48.033
in the first quarter,

50
00:01:46.873 --> 00:01:49.094
beginning of second quarter that has
dissipated,

51
00:01:49.134 --> 00:01:51.134
but it hasn't yet.

52
00:01:50.715 --> 00:01:52.715
So

53
00:01:51.395 --> 00:01:54.056
Jay Powell was at pains to say that

54
00:01:54.536 --> 00:01:57.459
The 50 was really just catch up that they
should have

55
00:01:57.499 --> 00:01:59.722
actually done 25 in July.

56
00:01:59.862 --> 00:02:01.862
So now they just literally do July and
August.

57
00:02:02.344 --> 00:02:04.344
They're not panicking.

58
00:02:03.085 --> 00:02:05.848
This is not like the COVID one where we're
going to get 50,

59
00:02:05.928 --> 00:02:07.928
50, 50.

60
00:02:08.290 --> 00:02:11.233
He gave guidance that we can expect
another 25 at

61
00:02:11.213 --> 00:02:13.756
the next meeting and another 25 closer to

62
00:02:13.796 --> 00:02:15.796
Christmas.

63
00:02:14.256 --> 00:02:16.719
So another 50 basis points from the U.S.

64
00:02:16.899 --> 00:02:18.899
this year.

65
00:02:18.380 --> 00:02:20.661
The UK is a little bit more tricky.

66
00:02:20.801 --> 00:02:22.963
Their inflation is a little bit more
sticky,

67
00:02:23.203 --> 00:02:25.264
and hence the pause this morning.

68
00:02:27.345 --> 00:02:30.046
They're going to be very slow

69
00:02:30.707 --> 00:02:32.848
with their cuts, so we expect another cut

70
00:02:34.068 --> 00:02:36.068
later in the year from the Bank of
England.

71
00:02:36.630 --> 00:02:38.630
ECB has already cut twice,

72
00:02:38.491 --> 00:02:41.052
so also going to be a little bit more

73
00:02:41.693 --> 00:02:43.693
circumspect and prudent,

74
00:02:44.034 --> 00:02:46.915
as they like to say in central

75
00:02:46.935 --> 00:02:48.935
bank speak.

76
00:02:47.476 --> 00:02:49.476
So...

77
00:02:48.456 --> 00:02:50.456
Yes, we're in a cutting cycle,

78
00:02:49.817 --> 00:02:52.299
but I think a conservative,

79
00:02:52.459 --> 00:02:54.459
prudent cutting cycle,

80
00:02:54.981 --> 00:02:57.402
but broad-based across most

81
00:02:57.463 --> 00:02:59.463
economies.

82
00:02:58.283 --> 00:03:00.283
Yeah,

83
00:02:58.463 --> 00:03:01.425
I was just looking at the Bank of England
statement and the inflation number,

84
00:03:01.565 --> 00:03:03.565
which came out on Thursday morning,

85
00:03:03.747 --> 00:03:05.747
2.2% for CPI.

86
00:03:05.728 --> 00:03:07.728
But the core inflation was

87
00:03:07.590 --> 00:03:09.590
3.6%.

88
00:03:09.111 --> 00:03:11.111
Just as a quick aside,

89
00:03:10.572 --> 00:03:12.572
is there a disparity between

90
00:03:12.793 --> 00:03:15.756
CPI and core in South Africa or the US,

91
00:03:15.796 --> 00:03:17.796
if you would?

92
00:03:17.769 --> 00:03:19.769
In South Africa, thankfully,

93
00:03:19.410 --> 00:03:21.931
our core inflation is very well behaved.

94
00:03:22.632 --> 00:03:25.454
The forecast for next year that the SARB

95
00:03:25.874 --> 00:03:28.636
actually put out is that their core
inflation is actually lower

96
00:03:28.676 --> 00:03:30.676
than

97
00:03:29.737 --> 00:03:32.339
CPI for the next three years.

98
00:03:32.519 --> 00:03:34.519
And more importantly,

99
00:03:35.461 --> 00:03:38.143
forecast to be below the midpoint of 4.5.

100
00:03:38.203 --> 00:03:40.545
So it's a very

101
00:03:40.605 --> 00:03:42.886
encouraging outlook

102
00:03:43.687 --> 00:03:45.687
for South Africa.

103
00:03:44.447 --> 00:03:46.447
I would say.

104
00:03:45.808 --> 00:03:47.808
Relative to targets,

105
00:03:47.268 --> 00:03:50.189
we're probably a little bit better off
than the

106
00:03:50.289 --> 00:03:53.030
UK ECB and the US.

107
00:03:54.351 --> 00:03:56.351
They're all tinkering

108
00:03:57.231 --> 00:04:00.112
a little bit around their target or a

109
00:04:00.112 --> 00:04:02.112
little bit above.

110
00:04:01.473 --> 00:04:03.893
So I would say as far as central bankers
go,

111
00:04:04.033 --> 00:04:06.974
I think the SOB can be a little bit more
comfortable than the other

112
00:04:07.014 --> 00:04:09.014
central bankers.

113
00:04:08.015 --> 00:04:10.015
Yes, indeed.

114
00:04:08.535 --> 00:04:11.316
The South African CPI rate very

115
00:04:11.416 --> 00:04:13.416
recently released came in.

116
00:04:13.036 --> 00:04:15.478
just below the 3% to 6% midpoint,

117
00:04:15.538 --> 00:04:17.538
came in at 4.4%.

118
00:04:17.480 --> 00:04:20.422
And although many people might have said
that with such a high

119
00:04:20.462 --> 00:04:22.462
base, i.e.

120
00:04:21.023 --> 00:04:23.023
around about 8%,

121
00:04:22.304 --> 00:04:24.946
it could have been a 50 basis point move,

122
00:04:25.186 --> 00:04:27.849
but nonetheless, it is very encouraging.

123
00:04:28.069 --> 00:04:30.331
What are the implications for the South
African economy?

124
00:04:30.411 --> 00:04:32.411
Because many people say, Malcolm,

125
00:04:32.372 --> 00:04:35.135
that the South African economy is less

126
00:04:35.275 --> 00:04:37.275
interest rate sensitive,

127
00:04:36.536 --> 00:04:39.178
and the consumer is less interest rate
sensitive

128
00:04:39.418 --> 00:04:41.418
than in other countries.

129
00:04:40.499 --> 00:04:42.499
Would you agree with that?

130
00:04:42.256 --> 00:04:44.500
I would because there's been quite a
destruction

131
00:04:46.002 --> 00:04:48.586
of the consumer in South Africa with lack
of

132
00:04:48.606 --> 00:04:50.606
employment, etc.

133
00:04:50.536 --> 00:04:53.438
But I think we are seeing a slight tick
up.

134
00:04:55.640 --> 00:04:57.640
It's less, but it's not irrelevant.

135
00:04:57.342 --> 00:05:00.064
So we are going to see benefit

136
00:05:00.124 --> 00:05:02.166
across the board for the consumer.

137
00:05:02.346 --> 00:05:04.688
And then, you know, throwing the two pot
as well,

138
00:05:05.348 --> 00:05:08.150
there's a little bit of extra cash there
that will hopefully go

139
00:05:08.331 --> 00:05:10.331
towards debt relief.

140
00:05:09.452 --> 00:05:12.434
But some of it we know will go towards
spending.

141
00:05:12.494 --> 00:05:14.494
So net-net,

142
00:05:14.456 --> 00:05:16.818
we expect a little uptick in consumer
spending

143
00:05:16.958 --> 00:05:19.500
and consumer activity in the economy.

144
00:05:19.880 --> 00:05:21.880
Very good.

145
00:05:20.280 --> 00:05:22.280
And that, of course,

146
00:05:21.261 --> 00:05:24.124
impacts growth because we are very reliant
on the

147
00:05:24.124 --> 00:05:26.787
consumer in South Africa when it comes to
GDP,

148
00:05:27.007 --> 00:05:29.007
gross domestic product.

149
00:05:28.308 --> 00:05:30.308
And what about the RAND?

150
00:05:29.189 --> 00:05:31.492
The RAND has been behaving itself quite
well recently.

151
00:05:32.132 --> 00:05:34.735
I think the mistake is we all got into the
habit of, you know,

152
00:05:34.735 --> 00:05:37.698
the RAND was just this absolute dog of

153
00:05:37.698 --> 00:05:39.698
a currency.

154
00:05:38.278 --> 00:05:40.278
But, you know,

155
00:05:39.279 --> 00:05:42.242
the mistake people make is they forget
that on the flip side,

156
00:05:42.262 --> 00:05:44.262
it was a hell of a strong dollar.

157
00:05:44.704 --> 00:05:46.704
For the last 18 months or so,

158
00:05:46.425 --> 00:05:48.425
the only trading town was the dollar.

159
00:05:48.445 --> 00:05:50.966
It was probably the best performing
economy in the world.

160
00:05:52.206 --> 00:05:54.206
On top of that,

161
00:05:53.006 --> 00:05:55.827
you had aggressive interest rate hikes
from the Fed.

162
00:05:56.547 --> 00:05:59.148
So the amount of money that flowed home

163
00:06:00.068 --> 00:06:02.809
as such from investors around the world
was incredible.

164
00:06:03.329 --> 00:06:06.250
The growth in money market funds alone in
the US

165
00:06:06.310 --> 00:06:08.310
was about $2 trillion.

166
00:06:07.451 --> 00:06:09.451
So

167
00:06:08.251 --> 00:06:10.972
all of that

168
00:06:11.052 --> 00:06:13.052
money flew there.

169
00:06:12.492 --> 00:06:15.093
It meant that the dollar was in

170
00:06:15.113 --> 00:06:17.474
demand and any other currency

171
00:06:17.734 --> 00:06:19.734
underperformed.

172
00:06:19.395 --> 00:06:21.395
Since then,

173
00:06:20.355 --> 00:06:22.416
the dollar is obviously losing a little
bit of shine.

174
00:06:22.676 --> 00:06:25.618
Interest rates are going to be cut a
little bit more aggressively from the Fed

175
00:06:25.197 --> 00:06:27.197
than

176
00:06:25.738 --> 00:06:27.738
from the Reserve Bank.

177
00:06:26.878 --> 00:06:29.599
So our interest rate differential will
improve.

178
00:06:30.760 --> 00:06:33.421
So that alone will see stability in the
currency.

179
00:06:33.561 --> 00:06:35.582
So I think we must get used to a more
stable

180
00:06:36.302 --> 00:06:39.163
RAND dollar exchange rate for the quarters
and months

181
00:06:39.183 --> 00:06:41.183
ahead.

182
00:06:40.244 --> 00:06:42.244
However...

183
00:06:41.084 --> 00:06:43.084
I was looking at the terms of trade as
well.

184
00:06:42.765 --> 00:06:45.706
So that's the stuff that we export divided
by the stuff that we

185
00:06:45.786 --> 00:06:47.786
import.

186
00:06:46.486 --> 00:06:48.486
Yes.

187
00:06:47.267 --> 00:06:50.068
And we're back at 2021-22 levels when the

188
00:06:50.088 --> 00:06:52.088
RAND was around

189
00:06:51.128 --> 00:06:53.429
1625.

190
00:06:53.429 --> 00:06:55.429
So, you know,

191
00:06:54.870 --> 00:06:57.531
don't be surprised if you don't see a

192
00:06:57.611 --> 00:07:00.472
stable to slightly firmer RAND over the
next six

193
00:07:00.612 --> 00:07:02.612
to nine months.

194
00:07:01.872 --> 00:07:03.893
Gosh, that would be wonderful in many
ways.

195
00:07:04.093 --> 00:07:06.093
Stability, of course, being the key,

196
00:07:05.594 --> 00:07:07.594
whether it's stronger or weaker,

197
00:07:07.375 --> 00:07:09.375
stability very much the key.

198
00:07:09.375 --> 00:07:11.375
The South African economy.

199
00:07:10.924 --> 00:07:13.666
And with a backdrop of the government of
national

200
00:07:13.846 --> 00:07:16.208
unity, has it stabilized?

201
00:07:16.328 --> 00:07:18.328
I've mentioned that word stable.

202
00:07:17.809 --> 00:07:20.691
Has the economy stabilized and will it
continue to do

203
00:07:20.791 --> 00:07:22.791
so or even grow,

204
00:07:22.372 --> 00:07:24.372
albeit at a modest pace?

205
00:07:25.735 --> 00:07:27.735
Very good question, Lindsay.

206
00:07:26.756 --> 00:07:29.337
And the quick answer is, yes,

207
00:07:29.378 --> 00:07:31.378
we have seen improvement.

208
00:07:30.819 --> 00:07:32.819
We've seen consumer confidence.

209
00:07:32.900 --> 00:07:34.900
We've seen business confidence tick up.

210
00:07:35.122 --> 00:07:37.543
All the early indicators are looking very

211
00:07:37.684 --> 00:07:39.684
positive.

212
00:07:39.605 --> 00:07:42.586
The engagements we have with various

213
00:07:43.107 --> 00:07:45.107
industry leaders,

214
00:07:44.848 --> 00:07:47.809
it's the most encouraged I can say that
they've been in probably eight to ten

215
00:07:47.890 --> 00:07:49.890
years.

216
00:07:49.330 --> 00:07:52.072
When they look at the outlook and they
look at the quality of

217
00:07:52.112 --> 00:07:54.894
engagement with state-owned enterprises
and with government

218
00:07:54.934 --> 00:07:56.934
bodies, etc.

219
00:07:55.694 --> 00:07:58.396
And we know that that all

220
00:07:58.496 --> 00:08:01.238
leads to investment in the economy,

221
00:08:01.338 --> 00:08:03.338
which we desperately need.

222
00:08:03.539 --> 00:08:05.539
And the one example we saw...

223
00:08:05.892 --> 00:08:08.673
If we get more reforms like we did with
the electricity and the

224
00:08:08.713 --> 00:08:10.994
solar, etc., that led to

225
00:08:11.554 --> 00:08:13.894
70, 80 billion rand invested in the
economy.

226
00:08:14.395 --> 00:08:16.395
And load shedding, our joke is,

227
00:08:15.955 --> 00:08:18.696
what is load shedding when it was becoming
a way of

228
00:08:18.736 --> 00:08:20.736
life?

229
00:08:19.516 --> 00:08:21.917
So if we can see that across other
sectors,

230
00:08:23.337 --> 00:08:25.378
I think we'll see a tick up in growth.

231
00:08:25.458 --> 00:08:28.019
So already the numbers that

232
00:08:28.239 --> 00:08:30.999
people are forecasting are a lot better

233
00:08:31.279 --> 00:08:33.279
than we've got used to.

234
00:08:34.012 --> 00:08:36.334
But if we see a reform sort of

235
00:08:36.935 --> 00:08:38.935
bonus on top of that,

236
00:08:38.736 --> 00:08:41.559
we can see meaningful growth next year and
the

237
00:08:41.579 --> 00:08:43.579
year after.

238
00:08:42.379 --> 00:08:44.379
Very encouraging.

239
00:08:43.340 --> 00:08:45.602
Now you've got to put on your portfolio
manager's hat.

240
00:08:45.903 --> 00:08:48.825
And I must say, you're very bad at
disguising your feelings,

241
00:08:48.885 --> 00:08:51.307
Malcolm, because I can sense an enthusiasm

242
00:08:51.948 --> 00:08:54.870
after what's happened in the last few
hours in

243
00:08:54.930 --> 00:08:56.930
South Africa.

244
00:08:55.711 --> 00:08:58.213
What is the impact on SAE fixed income

245
00:08:58.253 --> 00:09:00.253
investments?

246
00:08:59.274 --> 00:09:01.274
I mean, for example, the positioning.

247
00:09:01.584 --> 00:09:04.526
of the 91 Diversified Income Fund.

248
00:09:05.067 --> 00:09:07.709
Yeah, Lindsay, so it's been a great three,

249
00:09:07.769 --> 00:09:09.769
four months.

250
00:09:08.229 --> 00:09:10.992
So we started the year like really on a
bad

251
00:09:11.072 --> 00:09:13.072
note.

252
00:09:11.552 --> 00:09:13.552
There was political fears.

253
00:09:13.053 --> 00:09:15.876
There was inflation fears globally.

254
00:09:16.036 --> 00:09:18.036
And everything was like mucky and messy.

255
00:09:18.738 --> 00:09:20.940
Since then, the stars have started
aligning.

256
00:09:20.960 --> 00:09:23.382
So the government and national unity are
in place.

257
00:09:24.302 --> 00:09:27.005
Good reforms, good momentum coming from
that.

258
00:09:27.105 --> 00:09:29.226
At the same time that inflation is coming
down,

259
00:09:29.266 --> 00:09:31.266
the same time interest rates are coming
down.

260
00:09:31.484 --> 00:09:33.746
So for the first time in 10 to 15 years,

261
00:09:33.826 --> 00:09:36.467
South Africa is aligned with the global
economic

262
00:09:36.507 --> 00:09:38.507
cycle.

263
00:09:36.928 --> 00:09:38.949
So it's not something I'm used to

264
00:09:40.190 --> 00:09:42.611
in recent history, so it's really
encouraging.

265
00:09:43.172 --> 00:09:45.553
So the portfolio has been exceptionally
well

266
00:09:45.814 --> 00:09:48.295
positioned through the cycle.

267
00:09:48.876 --> 00:09:50.876
Going forward, it's still good,

268
00:09:51.137 --> 00:09:53.999
although quite a bit is in the price.

269
00:09:55.039 --> 00:09:57.941
So we've taken a little bit of risk off,
but we remain constructive.

270
00:09:58.001 --> 00:10:00.802
So on the bond side, we remain overweight.

271
00:10:01.303 --> 00:10:04.184
We've slightly reduced a

272
00:10:04.204 --> 00:10:06.546
bit of it just in case there's a little
bit of

273
00:10:06.966 --> 00:10:09.587
nervousness around the rate cuts and

274
00:10:09.927 --> 00:10:11.927
sort of questioning, has the Fed done too
much?

275
00:10:12.089 --> 00:10:14.270
But any sell-off, we will go back into the
market.

276
00:10:14.410 --> 00:10:16.410
But I reiterate,

277
00:10:15.550 --> 00:10:18.512
we remain very constructive on the bond
market

278
00:10:18.552 --> 00:10:20.552
going forward.

279
00:10:20.053 --> 00:10:22.053
On the credit side,

280
00:10:21.414 --> 00:10:23.875
there's still a decent yield there.

281
00:10:24.495 --> 00:10:26.495
albeit there's not much supply of it.

282
00:10:26.476 --> 00:10:29.056
So we sit in sort of more neutral credit

283
00:10:30.077 --> 00:10:32.077
at the moment.

284
00:10:30.917 --> 00:10:33.618
And that's purely because the pricing is a
little bit expensive.

285
00:10:34.298 --> 00:10:36.298
Property, we remain constructive.

286
00:10:36.218 --> 00:10:38.218
We like that.

287
00:10:37.839 --> 00:10:40.480
And in light of our conversation earlier
on the

288
00:10:40.540 --> 00:10:43.320
rant, that's probably the least amount of
dollars we've ever had.

289
00:10:43.360 --> 00:10:46.261
We've got around 1.5% dollars,

290
00:10:46.361 --> 00:10:48.361
just as a little bit of a hedge,

291
00:10:47.942 --> 00:10:50.823
because we do know that we've got
elections coming up

292
00:10:50.843 --> 00:10:52.843
in the US.

293
00:10:51.623 --> 00:10:53.623
There is that.

294
00:10:52.443 --> 00:10:55.325
That uncertainty in the Middle East is a
Russian-Ukraine war

295
00:10:55.386 --> 00:10:57.607
that everyone seems to have forgotten
about it.

296
00:10:57.908 --> 00:11:00.650
So you need some sort of protection for a

297
00:11:00.670 --> 00:11:02.670
global event.

298
00:11:01.431 --> 00:11:04.413
But a constructive sort of outlook in the

299
00:11:04.453 --> 00:11:07.396
portfolio will be taking a little bit of
risk off in

300
00:11:07.376 --> 00:11:09.376
the last couple of weeks.

301
00:11:09.117 --> 00:11:11.117
Let's look forward a year.

302
00:11:10.018 --> 00:11:12.018
Are you going to beat cash?

303
00:11:12.260 --> 00:11:14.260
Yes.

304
00:11:12.580 --> 00:11:14.580
I mean,

305
00:11:15.203 --> 00:11:17.203
it's an interesting time.

306
00:11:16.664 --> 00:11:18.664
But, you know,

307
00:11:17.284 --> 00:11:20.187
the way we do it is we look at cash is
going to be lower.

308
00:11:21.867 --> 00:11:23.867
As of midnight tonight,

309
00:11:23.508 --> 00:11:26.249
it drops 25% as we discussed.

310
00:11:26.369 --> 00:11:28.450
November, it'll drop another 25%.

311
00:11:28.490 --> 00:11:30.490
January, another 25%.

312
00:11:30.151 --> 00:11:33.072
So your lovely cash returns are going to
be a

313
00:11:33.092 --> 00:11:35.833
little bit less sexy for a while

314
00:11:36.453 --> 00:11:38.453
as we go into the cycle.

315
00:11:38.974 --> 00:11:41.736
Our portfolio currently yielding about

316
00:11:42.256 --> 00:11:44.537
10.10%, so comfortably above cash.

317
00:11:45.297 --> 00:11:48.138
And with the outlook that we see for South
Africa,

318
00:11:48.178 --> 00:11:50.178
we're pretty confident that

319
00:11:50.023 --> 00:11:52.685
Not only should we earn a decent

320
00:11:52.805 --> 00:11:54.805
yield,

321
00:11:54.105 --> 00:11:56.267
there's opportunity out there to actually

322
00:11:56.327 --> 00:11:59.148
participate and get a little bit of
capital uplift

323
00:12:00.249 --> 00:12:02.249
in the six months to 12 months ahead.

324
00:12:03.151 --> 00:12:05.652
Malcolm, your confidence is very evident.

325
00:12:05.692 --> 00:12:07.692
Thank you so much for your time.

326
00:12:06.713 --> 00:12:08.713
Malcolm Charles is a portfolio manager,

327
00:12:08.414 --> 00:12:10.955
fixed income at 91 in Cape Town.

328
00:12:11.996 --> 00:12:14.757
The views and opinions expressed in these
podcasts are those of

329
00:12:14.817 --> 00:12:17.339
Lindsay Williams and various contributors.

330
00:12:17.619 --> 00:12:19.619
and do not reflect the policy, position,

331
00:12:20.001 --> 00:12:22.682
or opinion of any other agency,
organization,

332
00:12:23.003 --> 00:12:25.885
employer, or company associated with

333
00:12:25.925 --> 00:12:27.925
StrictlyBusinessPodcast.com.

334
00:12:28.106 --> 00:12:30.548
Assumptions made on the analyses are not

335
00:12:30.668 --> 00:12:33.610
reflective of the position of any other
entity other

336
00:12:33.650 --> 00:12:35.650
than the speaker or the author.

337
00:12:35.371 --> 00:12:37.873
And since we are critically thinking human
beings,

338
00:12:38.233 --> 00:12:40.575
these views are always subject to change,

339
00:12:40.855 --> 00:12:43.417
revision, and rethinking at any time.

340
00:12:43.717 --> 00:12:46.118
Please do not hold us to them in
perpetuity.