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You're listening to Strictly Business
Podcast with Lindsay Williams.

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Today on this 91 Cash Talk podcast, we're
joined by Tsitsi

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Etendimatika, Client Director at 91 in
Cape Town.

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Now, Tsitsi, I'm going to start with the
big picture.

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I'd like someone to paint a picture for
me.

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The South African Reserve Bank, ASAB,
recently left the repo rate unchanged at

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7.5%.

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How has that affected corporate...

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cash strategies, especially as I sort of
get the feeling that certain Treasury

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departments might

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have been anticipating a cut?

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That was very optimistic if they were, but
the decision to maintain the rates at 7.5%

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reflects that the Reserve Bank is being
very cautious.

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And that's a good idea,

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given what we've seen coming out of the US
and given globally how uncertain things

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are.

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Most importantly for us here in South
Africa.

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our domestic challenges around the
government of national unity.

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So for corporate treasurers, this
stability of the rates actually offers

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opportunity to reassess cash

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management strategies, also balancing
between maintaining liquidity and seeking

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higher yields.

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This is a very good time for short-term
investment vehicles and money market funds

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to remain attractive for corporate

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treasurers.

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Well, what about inflation now, Titi?

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Because the inflation rate in the United
States.

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Surprised on the downside from 2.8% to
2.4%.

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In South Africa, obviously, we're
influenced by global inflation, but we

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have our own domestic issues as well.

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And with the RAND blowing out as risk-off
came to the fore since the Trump tariff

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situation,

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is there a risk to the upside?

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And also, with that global certainty in
play,

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how should corporate treasurers think
about adapting their cash strategies in

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this kind of uncertain environment?

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That's a fantastic question.

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So one of the things that we are saying
right now is anyone who claims an answer

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is lying.

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There's absolutely no one who has any idea
what's going on or what Mr.

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Trump will do.

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But what we do know is this environment is
marked by potential inflationary pressures

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and expectations.

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And what I would say for corporate
treasurers is the ability to be flexible

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and to think about diversification.

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And what does that mean?

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We think.

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This means segmenting your cash holdings,

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thinking about allocating portions to
money market funds for immediate access,

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and then thinking about the stickier cash
where you can allocate to income funds for

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longer term investment gains,

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which will allow you to optimize your
returns while managing your risks.

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OK, I was going to talk about money
market.

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Money market funds are often seen as a
safe bet, in brackets, boring by some

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people.

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But at the moment, they are particularly
attractive.

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Is that the case?

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How do they support?

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operational liquidity within a treasury
department?

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So we love to be boring.

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This is a good time to be boring.

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It also helps our clients have less gray
hairs.

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So these funds are tailored for
investments who have primary investment

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objectives of capital preservations.

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Your investors who are looking for
liquidity and looking for diversification,

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but still achieving returns in excess of
short-term bank rates.

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So this is your investor who...

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doesn't want to just park their money in a
bank deposit.

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These funds really are designed for
short-term investment and also just giving

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you that lower volatility,

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which will allow you to actually get some
sleep at night.

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Yeah, which we all need.

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You mentioned segmenting cash by time
horizon.

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What are the benefits and risks, on the
other side,

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of diversifying cash investments into
instruments like money market funds, which

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you've just spoken of,

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or Steffi Plus-type products?

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So segmenting your cash allows you to have
that tailored approach where you still get

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your liquidity,

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you still meet your return objectives, but
you get that extra bump up in your return,

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right?

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So the fantastic thing here is you get
everything that you get with money market

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funds,

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but you've got the higher yield.

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So you're going up the yield curve a
little bit, taking on a little bit more

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risk.

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But as I said, you get that extra 50 to 60
basis points.

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over and above what you would get on your
money market funds.

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And these funds are also really great in
that you get a bit more enhancement around

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your TENA.

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So you're getting a bit of a longer
instrument than what you would normally

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get in your money market funds and also
gives you that

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diversity of instruments that is slightly
more than what you would have in your

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traditional money market funds.

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Let's talk about bank deposits now,
because I think there was a film where

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some chap said, I work for my money,

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I want my money to work for me.

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And that really means that if you see a
big chunk of money sitting in a bank

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deposit, you think of opportunity costs,

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where could that money be going?

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What's the opportunity cost of keeping too
much cash parked in that instrument?

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And how can diversification help in that
matter?

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So holding all your excess cash in banks,
is a missed opportunity.

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It's one that we really think,
particularly in this stable or declining

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interest rate environment, isn't ideal.

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So what we would say is diversify your
holdings and your instruments by going

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into the funds that I've

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explained about, your money market funds
or your Steffi Plus type funds.

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This is to give you that ability to
enhance the yields and also spread the

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risk across various instruments and

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issuers.

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So this is all about diversification and
just reducing the impact of any single

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underperforming asset within

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your portfolio.

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Finally, the easiest question of the six
that I'm about to ask you.

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How do you see the cash investments
landscape evolving over the rest of the

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year?

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I mean, these days, it's the rest of the
day with the amount of inputs there are

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into the investment equation.

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And what are the key trends that
corporates should be?

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aware of?

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And again, it's very, very difficult
because the landscape changes so, so

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regularly.

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Absolutely.

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So what we're seeing is definitely going
ahead.

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We anticipate that the cash investment
landscape is likely to be influenced by

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multiple factors.

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This includes the potential interest rate
changes, inflation trends, and the global

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economic conditions.

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So keeping all that in mind, corporates
need to monitor what's going on in the

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landscape.

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and we're also paid to do that.

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So fortunately, the corporate treasurers
can just trust us to do the monitoring,

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make sure that we keep them informed
around policy shifts,

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around also emphasizing their flexibility
and thinking around their cash allocation

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and how they want to

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be nimble around, do you put it in your
liquidity bucket or do you put it in your

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longer term bucket

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where we can get them that extra yield
that we were talking about?

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But being robust.

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is so important in this trying time.

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Yes, trying indeed.

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Siti, thank you very much for your time.

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Siti Hattendi-Matika is Client Director at
91 in Cape Town.

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The views and opinions expressed in these
podcasts are those of Lindsay Williams and

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various contributors and do not reflect
the policy,

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position or opinion of any other agency,
organisation,

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employer or company associated with
StrictlyBusinessPodcast.com.

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assumptions made on the analyses are not
reflective of the position of any other

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entity other than the speaker or the
author.

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And since we are critically thinking human
beings, these views are always subject to

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change,

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revision and rethinking at any time.

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Please do not hold us to them in
perpetuity.