Welcome to this month’s FinMeUp update. March 2026 is shaping up to be a pivotal month for South African investors. Gold is at record highs, the rand is under pressure, the SARB meets on 26 March with markets split on a rate cut, and Godongwana’s Budget points to real fiscal progress. A lot is moving.

All of this matters for long term investors, but it also reminds us that good financial outcomes rarely come from reacting to headlines. They come from the small, consistent decisions we make each year.

Which brings us to something far more practical and immediate: the end of tax season.

As the tax year closed on 28 February, many South Africans rushed to make last minute decisions around contributions, deductions and tax efficient investing. In our latest FinMeUp Conversations episode, we unpack what investors should be thinking about now that the tax year has closed, and the opportunities that come with the new one.

Given the current macro backdrop, these are three areas we are watching closely this month.

Note: This is not financial advice, merely observations. For personalised financial advice, you can book to speak to a financial advisor here (powered by a registered FSP: No. 51310).

Imagine waking up one day with a completely different relationship with your money.

✔ You feel in control of your financial future.
✔ You understand investing and have a clear wealth plan.
✔ Your portfolio is diversified and goal aligned.
✔ You invest consistently every month.
✔ You understand fees and avoid common mistakes.
✔ You trust your decisions and grow wealth over time.

This is the transformation that becomes possible when you get clarity and a plan.
It is what we are helping thousands of people build inside FinMeUp.

Take the Next Step For Investors: Don't know your risk profile? Discover if these opportunities match your goals: Find Your Finimal

For Advisors: Join our growing network of fee-only professionals helping South Africans achieve FIRE: Chat to Travys

Your money matters. Make it count.

The FinMeUp Team

Your money matters. Make it count.

Welcome to this month’s edition of our newsletter! As we navigate through a landscape filled with market fluctuations and tax season deadlines, it’s essential to stay informed and proactive.

🌟 Here’s what we have in store for you:

• Market Insights: Why February's signals might not align with the headlines.

• Tax Strategies: Three actionable tax moves that could benefit you now.

• Hidden Opportunities: Discover the 73% of SA investors who are missing out.

• Portfolio Tips: A simple shift you can make before month-end.

But first, a message from our CEO, Travys Wilkins:

Tax Preparedness | A Message from Our CEO

 🎯 Three Market Opportunities

1. Current Market Update: The Rand's Strengthening Trend

What's Really Happening: While everyone's focused on tax deadlines, the Rand quietly strengthened which creates a rare offshore buying opportunity. As of February 1, 2026, the South African Rand has surged to approximately R16.14 per US Dollar, marking a significant appreciation from previous levels of R18.00 - R19.00.

The Signal: A rapid appreciation of 2.35% to 2.54% against the USD has been observed, providing local investors with a favorable entry point for offshore investments.

The Move: Now is an opportune time to consider diversifying into offshore assets as your Rands stretch further. If you're looking to invest in international markets, the current exchange rate offers a strategic advantage.

2. Navigating Tax Efficiency in 2026

February Tax Considerations: As we enter the final month of the tax year, it's essential for investors to consider strategies that enhance tax efficiency without offering specific investment advice.

The Insight: With the end of the tax year approaching, individuals should review their investment portfolios for potential tax implications. This includes understanding how capital gains tax (CGT) can affect returns and considering tax-efficient investment vehicles that may help to mitigate tax liabilities.

The Nugget: Engaging with a tax professional can provide insights into available deductions, credits, and strategies tailored to individual circumstances, ensuring that investors make the most of their financial situations as the tax deadline approaches.

3. Time-Sensitive Tax Strategies: Utilize Your Annual Exemption

The Strategy: Each individual is allowed an annual capital gains tax exemption of R40,000. This is a perfect time to review your portfolio and consider realizing gains on investments that have appreciated. By selling off some profitable assets before the tax year closes, you can utilize your exemption effectively.

The Actionable Step: If you have investments that have performed well, consider selling enough to realize gains up to your R40,000 exemption limit. This way, you can enjoy the profit without incurring any capital gains tax. Conversely, if you have underperforming investments, you can sell them to offset any realized gains, minimizing your tax liability.

Note: This is not financial advice, merely observations. For personalised financial advice, you can book to speak to a financial advisor here (powered by a registered FSP: No. 51310).

⚠️ Two Reality Checks

1. RA Contribution

Everyone’s Saying: “Max out your RA by February 28th.”

The Reality: A Retirement Annuity (RA) is not just about locking money away for retirement. Its real power lies in the tax deduction it creates today. When used correctly, an RA can actually increase your monthly cash flow, without reducing your standard of living.

The Strategy:
RA contributions reduce your taxable income. This often results in lower PAYE each month or a tax refund. Instead of letting those tax savings disappear into everyday spending, you can intentionally redirect them into a Tax-Free Savings Account (TFSA). You are not spending more, you are simply redirecting money SARS would have taken.

The Outcome:
You end up with two powerful benefits working together:

• Disciplined, long-term retirement saving through your RA

• Flexible, fully tax-free savings in a TFSA

• No increase in monthly financial strain

• Improved liquidity alongside retirement security

Action:
Use your RA primarily as a tax-efficiency tool, not in isolation. Capture the tax saving it creates and immediately channel it into a TFSA. This combination builds long-term wealth, preserves flexibility, and maximises the value of every rand you earn.

2. The Offshore Obsession

The Hype: "Get your money offshore before the Rand crashes!"

The Facts: South Africa's top 40 shares already provide around 70% offshore exposure through companies like Naspers, Richemont, and Anglo American. You're effectively paying forex spreads for exposure you already possess.

The Positive Shift: Recently, South Africa has been removed from the grey list, which enhances the country’s credibility and can improve foreign investment flows. This development signals a more stable economic environment and could strengthen the Rand, making local investments more attractive.

The Better Play: Local shares are currently trading at 12x earnings compared to 25x for their US equivalents. Even if the Rand weakens by 10%, you’re still better off investing in quality local companies.

The Insight: With the improved outlook for South Africa, focus on diversifying within your local market before rushing to offshore investments. This strategy capitalizes on undervalued local assets while minimizing potential currency risks, especially in a recovering economic landscape.

🚀 One Action

The “February Reset Strategy”

What's Happening: As markets position for potential rate cuts and inflation concerns linger, February presents a prime opportunity for investors to reassess and realign their portfolios for maximum tax efficiency.

Your Move:

1. Week 1: Lock in your Retirement Annuity (RA) contributions to take full advantage of tax deductions while they remain available.

2. Week 2: Rebalance your portfolio to reduce cash holdings and increase exposure to undervalued local assets, capitalizing on the improved economic outlook post-grey list.

3. Week 3: Complete any offshore transfers at current favorable exchange rates, ensuring you’re not overexposed to currency risks.

4. Week 4: Finalize your RA/Tax-Free Savings Account (TFSA) top-ups to maximize your tax efficiency before the tax year ends.

The Contrarian Angle: While many are preoccupied with tax deadlines, savvy investors are positioning themselves for the upcoming post-tax season rally. Historically, the March-May period has been strong for South African markets.

Risk Check: Avoid chasing FOMO (Fear of Missing Out). Stick to your investment strategy while optimizing the timing and structure of your actions.

The Key Difference: Successful investors act on the right information at the right time. Now is the moment to take decisive steps toward enhancing your financial future!

Take the Next Step Don't know your risk profile? Discover if offshore investing matches your goals with our free 3-minute assessment: Find Your Finimal.

Your money matters. Make it count.

The FinMeUp Team

Your money matters. Make it count.

Watch our latest YouTube video about employee benefits. Employee benefits should make your life easier, not more confusing. This clip is from our latest YouTube video where we break down what real value looks like. If you’re employed, this one’s for you.

1. South Africa’s Economy Is Showing Real Resilience

South Africa’s economy expanded for the fourth consecutive quarter, with growth supported by mining, agriculture and services. Business confidence and employment indicators are rising, signalling a turning point for investor and business sentiment.

The opportunity:
A stabilising economy creates space for diversified SA equity exposure. Improved earnings outlooks and stronger sentiment can support long term returns as conditions strengthen.

2. Payments and Fintech Transformation Is Accelerating

South Africa’s payments ecosystem is preparing for major regulatory reform. Proposed changes would allow non bank players to hold specific licences and participate directly in payments infrastructure. This would shift the industry toward open access and increased competition, after decades of bank led dominance.

The opportunity:
Fintech, digital wallets and open banking platforms are positioned to benefit as the landscape becomes more competitive. Consumers may see lower costs and more choice.

3. AI in Financial Services Moves Into Regulatory Focus

The FSCA and Prudential Authority have released early findings on the use of Artificial Intelligence in the South African financial sector. The report explores opportunities for innovation as well as risks relating to fairness, explainability and responsible deployment. This signals growing regulatory attention as AI becomes more widely used.

The opportunity:
AI enabled advice tools, compliance automation and smarter financial planning systems are set to grow. Early adopters who align with emerging regulatory standards may gain strong competitive advantage.

Note: This is not financial advice, merely observations. For personalised financial advice, you can book to speak to a financial advisor here (powered by a registered FSP: No. 51310).

Imagine waking up one day with a completely different relationship with your money.

✔ You feel in control of your financial future and know your money is finally working for you.
✔ You understand the core principles of investing and have a clear plan to grow your wealth.
✔ Your portfolio is diversified and aligned with your goals.
✔ You have built a consistent monthly investing habit that actually sticks.
✔ You have reduced unnecessary fees and know how to analyse what you are paying.
✔ You know the common mistakes investors make and how to avoid them.
✔ You trust yourself to make smart financial decisions and grow your wealth over time.

This is the transformation that becomes possible when you get clarity and a plan.
It is what we are helping thousands of people build inside FinMeUp.

Take the Next Step For Investors: Don't know your risk profile? Discover if these opportunities match your goals: Find Your Finimal

For Advisors: Join our growing network of fee-only professionals helping South Africans achieve FIRE: Chat to Travys

Your money matters. Make it count.

See you in 2026,

The FinMeUp Team

Your money matters. Make it count.

SARB's rate cut on 31 July to 7% signals confidence in controlled inflation, while global tech continues its AI-driven rally. But September brings a critical reminder: it's Wills Month in South Africa, and 70% of South Africans still don't have valid wills.

Here’s what matters from last month:

THREE MARKET OPPORTUNITIES 🎯

Where AI Data Centres are located - New York Times

1. Global AI Rally Accelerates with Infrastructure Boom

The global technology sector, particularly AI and software companies, maintained explosive momentum in August as U.S. AI data center power demand surged. Substantial investments in clean energy and infrastructure are supporting this growth, with the S&P 500 tech sector gaining further ground led by companies investing heavily in AI capabilities. The opportunity: South African investors accessing global markets via offshore structures, ETFs, or local tech holdings like Naspers/Prosus can benefit from this secular growth trend that shows no signs of slowing.

2. SARB Cuts to 7% Unlock Credit-Sensitive Sectors

The SARB cut the repo rate to 7% on July 31st - the lowest since late 2022 - while inflation rose mildly to 3.5% in July but remained within target. This monetary support signals confidence in economic growth despite ongoing challenges in mining and manufacturing. The opportunity: Rate cuts dramatically improve affordability on loans and mortgages, supporting consumer spending and property markets, while creating favourable conditions for credit-sensitive investments and cyclical sectors.

3. JSE Posts H1 Performance with 13.2% Profit Growth

JSE Group reported a 13.2% increase in net profit after tax in H1 2025, driven by broad-based revenue growth across Capital Markets (+16%) and Post-Trade Services (+17%). Equity market activity remained elevated despite global geopolitical tensions, highlighting market resilience and diversification success. The opportunity: Robust JSE performance reflects healthy market depth and investor confidence, reaffirming equity market participation as a key wealth-building strategy while local exchange benefits from global volatility.

Note: This is not financial advice, merely observations. For personalised financial advice, you can book to speak to a financial advisor here (powered by a registered FSP: No. 51310).

TWO REALITY CHECKS ⚠️

#1: The Estate Planning Crisis Most South Africans Ignore

With a valid will, your assets transfer according to your wishes through a Master of the High Court-appointed executor. Without one, the Intestate Succession Act distributes assets by law, which may not reflect your actual intentions. The transfer process can take months or years depending on estate complexity. The wake-up call: Having a valid will accelerates and clarifies asset transfer, reduces disputes, and ensures beneficiaries receive intended inheritances without unnecessary delays - yet 70% of South Africans die without proper estate planning.

#2: Minors Can't Inherit Directly - Your Kids Are at Risk

Minors under 18 cannot directly inherit assets - their money goes into the Guardian's Fund earning minimal returns instead of growing wealth. Testamentary trusts set up in your will manage minor beneficiaries' assets until they reach a specified age (often 21), while trustees handle distributions for education and living expenses. The harsh reality: Without proper planning, your children's inheritance gets locked in low-return government funds instead of building generational wealth through proper investment management.

ONE ACTION TO TAKE 🚀

Secure Your Estate During South Africa's Wills Month

September is South Africa's official Wills Month, making this the perfect time to protect your family's financial future while positioning your portfolio for the current market opportunities created by rate cuts and AI growth.

Here's how to get started:

• Immediate: Create or update your will this month - use September's focus on estate planning to ensure your assets transfer according to your wishes

• Protection: Set up a testamentary trust for minor beneficiaries to protect their inheritance and manage funds until adulthood

• Coverage: Review life insurance needs, factoring in school fees, debts, and household expenses to protect your family's financial stability

• Growth: Take advantage of 7% rates by increasing exposure to property, consumer discretionary, and financials while maintaining global AI exposure

The difference between investors who build wealth and those who don't? Taking action on the right information at the right time.

Take the Next Step For Investors: Don't know your risk profile? Discover if these opportunities match your goals: Find Your Finimal

For Advisors: Join our growing network of fee-only professionals helping South Africans achieve FIRE: Chat to Travys

Your money matters. Make it count.

See you next month,

The FinMeUp Team

Today's anticipated SARB interest rate cut has us keeping an eye on our portfolio, potentially boosting bank stocks and creating a window for offshore investments thanks to the rand's recent strength. Here's what you need to know: 3 opportunities, 2 reality checks, and 1 actionable step for smart money.

THREE MARKET OPPORTUNITIES 🎯

1. Can The Repo Rate Cut Create Momentum

The SARB is expected to cut the repo rate today, showing a stance to keep inflation below 3%. JSE financial sector stocks including Standard Bank, Capitec and FirstRand showed performance with positive earnings updates and improved loan growth prospects.
The opportunity: Attractive valuations combined with improving fundamentals make local banks a key play for both income and capital growth as the rate cutting cycle continues.

2. Rand Strength Opens Offshore Window

The rand strengthened to lows of R17.75/USD in July, supported by the potential SARB rate cut and a weaker US dollar amid global trade tensions. This rand strength reduces the cost of offshore assets for SA investors, creating a window to increase exposure affordably.
The opportunity: Offshore diversification becomes dramatically more affordable and prudent amid local economic uncertainties - every rand now buys significantly more international assets than just weeks ago.

3. Gold Miners Capitalise on Price Levels

Gold traded around R1900 per gram in late July, near recent highs, supported by geopolitical risks and aggressive central bank buying globally. SA gold miners like Harmony Gold and Gold Fields reported strong production and improved earnings outlooks as the rand-gold price combination continues supporting healthy margins.
The opportunity: Gold mining stocks offer inflation protection and portfolio diversification while generating rand-hedged revenues that benefit from currency volatility.

Note: This is not financial advice, merely observations. For personalised financial advice, you can book to speak to a financial advisor here (powered by a registered FSP: No. 51310).

TWO REALITY CHECKS ⚠️

#1: The "Safety" of Cash Is an Illusion

Holding large amounts of cash in a bank account feels safe, especially during uncertain times. However, financial advisors warn this is one of the most common and costly mistakes investors make. While cash is essential for emergencies, its value is consistently eroded by inflation over the long term. This problem is magnified in the current environment where the South African Reserve Bank is in a rate-cutting cycle, which will further reduce the after-tax yields on cash holdings, making it almost certain that your money won't outperform inflation.
The harsh reality: Holding excess cash isn't preserving your capital; it's a guaranteed way to lose purchasing power over time. If you want your money to grow, it needs to be invested and working for you.

#2: The Myth of Easy Double-Digit Returns

A persistent myth in retirement planning is the assumption of consistently high returns, such as inflation plus 5% or more. The reality is much more sobering. Over the past decade, many Regulation 28-compliant balanced funds have struggled to deliver even CPI+3%, with the median return sitting at just 7.46% per year. Furthermore, headline returns are not what lands in your pocket. High fees, including administration and advice fees which are not always reflected in published performance, can significantly reduce your actual returns.
The wake-up call: Chasing unrealistic returns while ignoring the impact of high fees is a critical retirement planning mistake. You must know your portfolio's true return after all costs to determine if you are on track to meet your goals.

Your feedback shapes our community events - vote now! 🗳️

ONE ACTION TO TAKE 🚀

Rebalancing: Capture Banking Momentum + Offshore Diversification

With banks rallying and the rand creating an offshore buying opportunity, this is the kind of moment to rebalance your portfolio across three key themes driving current market conditions.

Here's how to get started:

• Banking Play: Increase allocation to JSE banks and financials (Nedbank, FirstRand, Standard Bank) to capture policy-driven upside and stable dividends

• Defensive Gold: Add or maintain exposure to gold miners (Harmony Gold, Gold Fields) for inflation protection and rand-hedged growth

• Offshore Window: Gradually increase offshore exposure to global AI and semiconductor ETFs, using rand strength to manage high valuations

• Currency Strategy: Stagger offshore purchases over 2-3 months to manage remaining rand volatility risk

The difference between investors who build wealth and those who don't? Taking action on the right information at the right time.

Take the Next Step For Investors: Don't know your risk profile? Discover if these opportunities match your goals: Find Your Finimal

For Advisors: Join our growing network of fee-only professionals helping South Africans achieve FIRE: Chat to Travys

Your money matters. Make it count.

See you next month,

The FinMeUp Team

SARS just got a R4 billion war chest and they're coming for you.

Over 1,000 new debt collectors. AI-powered auditing. No more paper letters (everything's going digital). And they're not just targeting the big fish - they're coming after SMEs, professionals, and anyone who's missed a PAYE payment or underestimated provisional tax.

But before you panic, here's what you need to know, along with a video that I recommend you watch before the end of the week.

THREE MARKET OPPORTUNITIES 🎯

1. Middle East Chaos Creates Gold Rush

US bombing of Iranian nuclear sites sent oil past $80/barrel (now around $67/barrel) and the rand weaken to around R18.15/$. While commodities like gold are growing with a Krugerand starting at around R65,738/ounce and can “easily exceed” R100,000.
The opportunity: Gold is up 38% year-on-year and provides rand-hedge protection during geopolitical uncertainty. Krugerrands are VAT-exempt for SA investors - consider speaking to your financial adviser about portfolio allocation for volatility protection.

2. JSE Resources and Financials Lead Strong Gains

JSE performers in June include Reinet (+19.0%), Implats (+23.2%), and Sibanye-Stillwater (+13.28%), while Gold Fields went down 8%. Financials like Capitec (+3.1%) showed resilience amid improved policy clarity and SARB rate cuts to 7.75%.
The opportunity: Resource stocks offer rand-hedged revenues and attractive dividend potential, while financials benefit from improving credit conditions and supportive monetary policy during the recovery phase.

3. SA SME Digital Boom: E-commerce Surges 21.4% Annually

South African small businesses are riding a digital wave with e-commerce growing at 21.4% compound annual growth rate through 2030 and internet adoption jumping from 68% to over 75%. The opportunity: Start or digitise your business now to capture the mobile commerce boom - with 91% of SA's formalised businesses being SMEs contributing 34% to GDP, there's massive room for growth in the digital economy.

Note: This is not financial advice, merely observations. For personalised financial advice, you can book to speak to a financial advisor here (powered by a registered FSP: No. 51310).

TWO REALITY CHECKS ⚠️

#1: SARS Is Coming For You

The New Reality:

• 1,000+ new debt collectors deployed.

• AI flagging large deposits automatically.

• Digital-only communication (no more paper letters).

• Focus on SMEs, professionals, missed PAYE payments.

• R50 billion in unpaid taxes being actively pursued.

What To Do:

• Update your eFiling profile - verify all contact details.

• Don't ignore legitimate SARS communication - it appears in your eFiling account.

• Get professional help early - tax practitioners can negotiate debt reductions.

• Know the triggers: Large deposits, late PAYE, underestimated provisional tax.

#2: Your Emergency Fund Is Probably Useless

48.1% of South Africans have less than 3 months of emergency savings, but even if you think you're prepared you could be making these mistakes.

The False Security Trap:

• You're calculating wrong: Most people base emergency funds on total monthly expenses, not essential survival costs.

• You're storing it wrong: R50,000 in a savings account earning 8% loses R2,000+ annually to inflation after tax.

• You're defining "emergency" wrong: Load shedding equipment, security upgrades, and medical aid shortfalls aren't covered by traditional emergency funds.

A Local Reality Check:

• Average job search: 6-8 months (not the global standard of 3 months).

• UIF maximum: R17,712/month for only 12 months (probably less than your typical bond payment).

• Medical aid gaps: R100,000-R300,000 for serious procedures not fully covered.

• Load shedding costs: R15,000-R40,000 for backup power solutions most families need.

If you earn R25,000/month and lose your job:

• Standard advice (3 months): R75,000 emergency fund

• SA reality (6+ months): R150,000+ needed just for basics

• True emergency fund: R200,000+ including medical gaps, security, infrastructure failures

Your "emergency fund" isn't protecting you from the emergencies you're most likely to face. It's time to rebuild it for our unique risks.

ONE ACTION TO TAKE 🚀

Conduct Your "R250 Mistake" Audit This Week

Most South Africans are bleeding money through small, recurring costs that compound into massive wealth destroyers. From the video above we’re “reframing” it as the "R250 mistake" because that's typically what a subscription or service costs monthly.

Your 4-Step Audit Process:

Step 1: The Bank Statement Scan

• Download last 3 months of bank statements

• Highlight every recurring debit you don't immediately recognize

• Circle subscriptions you haven't used in 30+ days

• Target: Find R250-R500 in unnecessary monthly costs

Step 2: The Insurance Reality Check

• List all insurance policies and premiums

• Check if you have duplicate coverage (car insurance through bank + separate insurer)

• Verify you're not paying for outdated coverage amounts

• Target: Optimise coverage without gaps or overlaps

Step 3: The Investment Fee Investigation

• Log into all investment accounts

• Find the Total Expense Ratio (TER) or annual fee

• If it's above 1%, research lower-cost alternatives

• Target: Reduce investment fees by 0.5-1% annually

Step 4: The Compound Effect Calculation

• Add up all savings found (aim for R500+ monthly)

• Calculate: R500 x 12 months x 30 years x compound growth

• Result: R500 monthly invested at 10% = R1.1 million over 30 years

Why This Matters: The difference between financial success and struggle often isn't income level - it's eliminating wealth-destroying habits while making the most of wealth-building ones. That "small" R250 monthly subscription or habit becomes R569,000 in lost compound growth over 30 years.

Watch This

While finishing this newsletter looking back at June and doing my half year budget this episode was released on the Diary of a CEO. I didn’t want to keep this from YOU, give it a watch or listen!

Reply with the biggest "R250 mistake" you discovered in your audit. Your transparency could help another reader identify their own wealth leaks.

See you next month,
The FinMeUp Team

Your money matters. Make it count.

While global markets show mixed signals and South Africa's economic growth remains sluggish at just 0.6%, smart money is positioning for both international opportunities and local protection strategies.

THREE MARKET OPPORTUNITIES 🎯

1. European Markets Surge While US Stumbles

Poland (+47.6%), Austria (+34.3%), and Greece (+32.7%) are demolishing global returns while the S&P 500 crawls at +0.4%. European defensive stocks like Rheinmetall are soaring (≈200% YTD) on increased military spending, and the ECB's rate cuts are fuelling industrial recovery. The opportunity: Investors can access these outperforming markets through European ETFs at historically attractive ZAR entry points.

2. Rand Strength Creates Offshore Buying Window

The rand has strengthened to R17.99/USD from R19.43 in April - a rare 8% appreciation that makes offshore investments significantly cheaper. This strength is driven by lower oil prices and improved inflation outlook, but currency windows close fast. The opportunity: Every rand of offshore investment now buys more international assets than it did two months ago.

3. JSE Tech Stocks Deliver While Others Struggle

Bytes Technology Group posted 17.1% profit growth with revenue up 4.9%, while their cash reserves jumped 27.4%. They're paying 15% higher dividends as global digital transformation accelerates. The opportunity: Capture AI and tech growth through JSE-listed companies without currency risk, while these stocks trade at reasonable valuations.

Note: This is not financial advice, merely observations. For personalised financial advice, you can book to speak to a financial advisor here (powered by a registered FSP: No. 51310).

TWO REALITY CHECKS ⚠️

#1: The Retirement Crisis Is Worse Than You Think

Only 6% of South Africans are on track to retire comfortably, according to 10X Investments' latest report. Even worse, 72% of people whose retirement plans are failing say "I can't save enough" - but the real problem is that they don't know their investment costs. 37% have no idea what fees they're paying, while others think they pay nothing at all. The brutal truth: Hidden fees and poor planning are destroying retirement dreams faster than low savings rates.

#2: South Africans drowning in debt

SA's earners (R35,000+ monthly) have the highest debt burden at 177% of annual income, with 77% of monthly income going to debt repayments. Their unsecured debt has increased 90% in nine years - the highest ever recorded. The wake-up call: Higher income doesn't equal wealth if you're trapped in a debt spiral that prevents investing for the future.

ONE ACTION TO TAKE 🚀

Get Your Estate Planning Sorted Before It's Too Late

With R89 billion in unclaimed benefits sitting in SA's financial system and only 6% of people retiring comfortably, most South Africans are leaving their families financially vulnerable. The "sandwich generation" is supporting both aging parents and children while neglecting their own estate planning - a costly mistake that multiplies during uncertain times.

Here's how to get started:

• Immediate: Update your beneficiary nominations on all retirement accounts, policies, and investments this month

• Essential: Get a basic will drafted if you don't have one - 70% of South Africans die without proper estate planning

• Protection: Review your life insurance coverage - aim for 10x annual income if you have dependents

• Smart: Establish a testamentary trust to protect minor children's inheritance from being mismanaged

The difference between investors who build wealth and those who don't? Taking action on the right information at the right time.

Take the Next Step Don't know your risk profile? Discover if offshore investing matches your goals with our free 3-minute assessment: Find Your Finimal.

See you next month,

The FinMeUp Team

Your money matters. Make it count.

If things are feeling a little “odd” this week, it’s because markets are still holding their breath ahead of the US elections – like we speculated last week.

But investors have been quietly repositioning across the board – from gold and Bitcoin to Tesla stock. Here’s how you can prepare as we get closer to one of the most closely watched events of the year…

Shining some light on 🔦 

• Gold VS Bitoin VS Escaping the rat race.

• PnP renewal strategy, SA investment drive & AMD optimism.

• Stock update: Higgo’s Top 11 stock picks for 2024.

• Earnings calendar: Who’s reporting on revenue, when.

THE SPOTLIGHT

Gold, Bitcoin & Other Surges this Week

With just days to go before the U.S. election, most international financial markets are in a holding pattern, with investors displaying mixed appetites for risk. 

The dynamics playing out across different asset classes – gold’s rally, Bitcoin’s ascent, and Tesla’s record gains – show a landscape shaped by both anticipation and caution.

Gold Soars as a Safe Haven Asset

As geopolitical risks mount, including ongoing tensions in the Middle East, gold prices have surged 32% this year, closing in on record highs. Analysts project prices could reach just shy of R5,000 per ounce by year-end as investors seek safe-haven assets amidst election-driven uncertainty.

The recent increase in central bank gold purchases and more anticipated interest rate cuts further bolster gold's appeal. For risk-averse investors, the stability of precious metals provides a hedge against potential post-election volatility, with demand projected to stay strong as the political climate unfolds.

Bitcoin’s Rally Underpinned by Fiscal Concerns

In a departure from traditional markets, Bitcoin has seen a parallel rally, spurred by investor confidence in its status as “digital gold.” Bitcoin hit $71,000 this week, just shy of its record high, as anticipation grows around pro-crypto policies under a potential Trump administration. 

In an article touting “Your Money is Being Wasted,” Tesla’s Elon Musk has even declared the U.S. debt load a “financial emergency,” saying it’s priming both the gold and BTC surge and urging fiscal responsibility as a critical issue.

This rhetoric has helped fuel Bitcoin’s growth as a hedge against fiat instability, with Bitcoin ETFs now outpacing many traditional ETFs (BTC and ETH ETFs now make up 14 of the top 30 new ETFs), signalling broader market adoption.

Tesla’s Double-Edged Growth and Crypto Strategy

While Tesla’s Q3 earnings exceeded expectations, propelling shares up by 22%, Musk’s growth updates reveal a unique strategy that blends optimism for growth with a conservative financial outlook. Tesla’s commitment to holding Bitcoin on its balance sheet reflects Musk’s faith in crypto’s long-term value, even as he warns of the risks associated with the U.S. debt crisis.

Tesla’s growth trajectory – and dual stance of EVs alongside BTC – appeals to investors who see tech innovation as a longer-term play, balancing today’s fiscal challenges with tomorrow’s potential gains.

Note: This is not financial advice, merely observations. For personalised financial advice, you can book to speak to a financial advisor here (powered by a registered FSP: No. 51310).

STOCKS AND ALL

📉 Pick n Pay’s Widening Losses: Pick n Pay posted a R827.4 million loss for H1 2024, up 45% from last year. Despite a 3.7% turnover growth to R56 billion and a modest trading profit from Boxer, hefty finance costs led to a R1.05 billion pre-tax loss. The group is exiting the Nigerian market but plans to list its Boxer division on the JSE in Africa’s largest IPO this year, aiming to raise up to R8 billion as part of a restructuring strategy.

🌍 JSE’s Investment Drive: A South African delegation, including JSE leadership and government ministers, is in New York for the SA Tomorrow Conference, promoting SA as an investment destination. CEOs from 19 listed companies are joining the push to attract U.S. investors, highlighting opportunities in sectors from energy to digital tech.

📈 AMD Gears Up for Earnings: AMD shares rose 2.36% to close at $159.92 ahead of its Q3 earnings report. Wall Street expects earnings per share of 92 cents and $6.71 billion in revenue, as investor attention sharpens on AI chip demand and AMD’s competition with Nvidia.

HIGGO’S TOP 11

Name	Growth YTD	Price
4Sight Holdings Ltd	48%	ZAC74.00
Advanced Micro Devices, Inc.	13.73%	$166.25
Bitcoin (BTC / USD)	53.71%	$72,226.81
Brookfield Corp	37.81%	$53.65
Caxton and CTP Publishers and Printers	18.77%	ZAC 1,259.00
Ether (ETH / USD)	13.01%	$2,067.82
Master Drilling Group Ltd	8.00%	ZAC 1, 350.00
MercadoLibre Inc	28.62%	$2,026.57
On Holding AG	76.99%	$49.91
Purple Group	29.33%	ZAC 97.00
Santova Ltd	-6.67%	ZAC 700.00
Scottish Mortgage Investment Trust PLC	13.72%	GBX 867.00
PORTFOLIO YTD:	39.99%

*A balance between Bitcoin and Ether represent the EC10 stock pick, click here for more.

UPCOMING EARNINGS REPORTS

These companies are expected to deliver earnings reports in the next few weeks:

30 October 2024

• Microsoft

• Meta

• RENERGEN Ltd

31 October 2024

• Apple

• Amazon

• AB inBev

4 November 2024

• Palantir Technologies

THE PEOPLE HAVE SPOKEN

Which sector do you think will benefit the most post-election?

🟩🟩🟩🟩🟩🟩 🛢️ Oil and defence (36%)

⬜️⬜️⬜️⬜️⬜️⬜️ 🌱 Clean energy (0)

🟨⬜️⬜️⬜️⬜️⬜️ 💻 Tech and healthcare (13%)

🟨🟨🟨🟨⬜️⬜️ 💰 Financials (25%)

🟨⬜️⬜️⬜️⬜️⬜️ 🏗️ Infrastructure and construction (13%)

🟨⬜️⬜️⬜️⬜️⬜️ 📦 Retail and consumer goods (13%)

LOL, so considering we highlighted which markets might do well if Trump or Harris wins the US elections, the majority here seems to predict a Trump win – which is not dissimilar to poll projections right now.

Both trackers we highlighted last week have increased Trump’s changes by at least 2 points in 7 days – The Hill increased it to 54% Trump and Polymarket says it’s a resounding 66%.

As we in SA know all too well, election outcomes can have a massive impact on the markets. But when you’re talking about US elections, the market fluctuations have been apparent for some time already.

Now it all comes to a head in less than two weeks as Americans prepare to go to the polls on 5 November. And presidential candidates Donald Trump and Kamila Harris have very different policies and agendas, so swings either way can send ripples through the markets.

Here’s what you need to know to prepare and protect your investments going either way…

Shining some light on 🔦 

• Market impact: What if Trump or Harris wins in the US?

• Prosus’s AI retail, gold surge & the big Bitcoin breakout.

• Stock update: Higgo’s Top 11 stock picks for 2024.

• Earnings calendar: Who’s reporting on revenue, when.

• How to invest safely when markets rebound and fluctuate.

THE SPOTLIGHT

How Could the US Election Impact Markets?

There’s no question that the upcoming US elections have been impacting markets recently. And it’s all coming to a head in 13 days’ time.

Americans will head to the polls on November 5, 2024, with results normally confirmed in a few days before the Electoral College casts its votes in December and the new president takes office on January 20, 2025.

Who will it be? Well, polling opinion aggregators like The Hill only recently adjusted for a 52% chance of a Trump win, while Polymarket puts it at 64% Trump.

The thing is, you never really know. And as both UK-based trading platform IG and Alex Sebastian for The Times points out, the candidates (Trump and Harris) have very different fiscal policies and aims in mind.

Here’s how wins either way could pan out for investments…

Trump: Pro-Business, Pro-Oil, and Bitcoin Influence

If Trump wins, we can expect tax cuts, deregulation, and support for traditional sectors like fossil fuels, defence, and banking. 

Bitcoin has shown a tendency to surge during Trump's wins, as seen recently after an assassination attempt, making it a potentially volatile but significant asset to watch. 

A stronger dollar and rising inflation could boost US Treasury yields. Trade tensions, especially with China, may rise, creating further market volatility. His “America First” approach might benefit domestic sectors but pressure industries reliant on foreign supply chains.

Harris: Clean Energy and Healthcare Growth

On the other hand, Harris’ administration would likely emphasise renewable energy and healthcare. Green technology sectors – solar, wind, and electric vehicles – could benefit from expanded investment and tax incentives. 

Conversely, traditional energy companies could face more stringent regulations. 

Infrastructure investment is also on the agenda, which could benefit construction and engineering firms. Harris may focus on a more collaborative foreign policy, reducing trade tensions, stabilising supply chains, and providing a more predictable market environment.

Balancing Uncertainty

While these differences create stark investment strategies, it's critical to remember that US elections often cause short-term market volatility. 

Investors should focus on long-term trends and diversification to weather any immediate market swings. Industries like renewable energy, healthcare, and tech may thrive regardless of the winner, while sectors like oil, gas, and traditional industries could see more variability.

Note: This is not financial advice, merely observations. For personalised financial advice, you can book to speak to a financial advisor here (powered by a registered FSP: No. 51310).

STOCKS AND ALL

📊 4Sight’s Growth: 4Sight Holdings (JSE: 4SI) posted a 20.1% revenue increase for H1 2024, reaching R541.9 million. Operating profit rose by 32.9%, driven by its focus on AI and innovation, with R5 million invested quarterly in AI and Copilot technology.

📉 Pan African Voting Shift: Pan African Resources (GB) saw a slight decrease in voting rights, with Allan Gray Proprietary Limited reducing its stake from 17.94% to 16.96% as of October 17, 2024. This change may affect shareholder dynamics and investor sentiment.

💻 Naspers’s New AI E-Commerce Vision: Naspers, through its Dutch-listed subsidiary Prosus, plans to leverage AI to transform e-commerce as part of a strategy to double the company's value and enhance emerging market services to expand Prosus’ portfolio beyond its key stake in Tencent. Recent actions include selling stakes in Trip.com and Superbalist, and continued buybacks to close the valuation gap.

🪙 Gold Prices Surge: Gold prices have soared, increasing by 32% this year, as investors turn to safe-haven assets amid U.S. election uncertainty and escalating tensions in the Middle East. Analysts suggest prices could hit $2,800 per ounce by year-end, driven by strong demand, interest rate cuts, and central bank gold purchases.

📈 Bitcoin’s Big Breakout: Bitcoin surged 10% last week, reaching $69,000, driven by election-related volatility and favourable crypto sentiment from both U.S. presidential candidates. Analysts predict a potential bull run, with targets between $180K and $300K. Technical indicators show room for further growth, despite possible short-term resistance around $72K–$74K.

HIGGO’S TOP 11

Name	Growth YTD	Price
4Sight Holdings Ltd	66%	ZAC83.00
Advanced Micro Devices, Inc.	5.41%	$154.09
Bitcoin (BTC / USD)	42.47%	$66,855.30
Brookfield Corp	39.53%	$54.32
Caxton and CTP Publishers and Printers	16.51%	ZAC 1,213.00
Ether (ETH / USD)	11.80%	$2,067.82
Master Drilling Group Ltd	8.00%	ZAC 1, 350.00
MercadoLibre Inc	31.24%	$2,067.82
On Holding AG	72.55%	$48.66
Purple Group	33.33%	ZAC 100.00
Santova Ltd	-4.80%	ZAC 714.00
Scottish Mortgage Investment Trust PLC	11.65%	GBX 851.26
PORTFOLIO YTD:	39.54%

*A balance between Bitcoin and Ether represent the EC10 stock pick, click here for more.

UPCOMING EARNINGS REPORTS

These companies are expected to deliver earnings reports in the next few weeks:

23 October 2024 NextEra Energy Tesla  24 October 2024 Anglo American Platinum 28 October 2024 Pick n Pay Stores 29 October 2024 AMD Alphabet First Solar

30 October 2024 Microsoft Meta RENERGEN Ltd 31 October 2024 Apple Amazon AB inBev 4 November 2024 Palantir Technologies

WEALTH HACKER’S KIT

When Markets Move: Is It Safe to Invest Right Now?

South Africa is riding a wave of optimism. Interest rates have dropped, the Rand is strengthening, fuel prices have dropped and the two-pot retirement system is injecting fresh cash into the economy. 

But with the US elections looming and could bring global market fluctuations, how do you know when and where to invest safely?

1. Understand Market Rebounds

The market often rebounds quickly after a downturn, but timing your entry can be tricky. One key insight: trying to time the market perfectly can backfire. 

For example, in 2020, the global markets saw one of the fastest recoveries ever after the COVID-19 crash. Those who stayed invested through the dip saw far higher returns than those who waited for the “perfect” moment to re-enter. 

The lesson? Rather than chasing the best entry point, stay focused on long-term gains. This applies whether you're investing in stocks, ETFs, or even property.

2. Diversification is Key

With South Africa's improving economic outlook, the temptation is to pour all your money into local stocks or assets benefiting from the current recovery. However, it's essential to stay diversified. 

As global factors, such as the upcoming US elections, could still affect the market, holding a mix of local and international assets will cushion your portfolio. Offshore investments provide exposure to stronger currencies and markets, which can balance any potential local market volatility.

3. Long-Term Strategies Work

Short-term market movements can be volatile and unpredictable. Instead of reacting to every fluctuation, focus on your long-term goals. Historical data shows that those who hold their investments during uncertain times typically see better returns than those who try to jump in and out.

Monitor Key Indicators

While it’s impossible to predict exactly how markets will perform, certain indicators can guide your strategy. Keep an eye on South Africa’s inflation rate, interest rate changes, and the Rand’s performance against major currencies like the Dollar.

THE PEOPLE HAVE SPOKEN

Is Spending Two-Pot Money Now the Right Call?

🟨⬜️⬜️⬜️⬜️⬜️ ✅ Yes – if it means avoiding more debt, it’s worth it (10%)

🟩🟩🟩🟩🟩🟩 🚫 No – retirement comes first, don’t touch it (62%)

🟨⬜️⬜️⬜️⬜️⬜️ ⚖️ Maybe – depends on how bad things are financially (19%)

⬜️⬜️⬜️⬜️⬜️⬜️ 🤷‍♂️ It’s tempting, but not sure if it’s smart (0)

🟨⬜️⬜️⬜️⬜️⬜️ 💡 I’d only withdraw if I could reinvest in something better (10%)

You’re right, that’s the best way to look at it, Shaun! ☝️

Yes, Holman, if you have good reason to believe the win will be much bigger, you could take the risk – especially if you're young enough to know you can make up for it if it goes the wrong way. 🤔

Right, Diederick, it’s an investment in yourself, whether you use it or not, it’s your wealth. 🧠

A month-and-a-half since SA implemented the new two-pot retirement savings system, we have some outflow data on what South Africans are spending withdrawals on.

And that, combined with other recent general SA optimism signals could make for interesting investment opportunities.

Here’s what you need to know…

Shining some light on 🔦 

• Two-pot in play: More SA optimism on the cards.

• SA-Saudi deal, bonds, private markets & energy on the rise.

• Stock update: Higgo’s Top 11 stock picks for 2024.

• Earnings calendar: Who’s reporting on revenue, when.

• Should you invest in a retirement annuity or go off-shore?

THE SPOTLIGHT

Leveraging SA’s Two-Pot Savings Windfall

We haven’t spoken about it yet, but SA’s new two-pot retirement system, which was enacted a month-and-a-half ago on 1 September 2024, is already injecting more cash into the market.

1.2 Million South Africans have processed R21 billion worth of withdrawals to date to fund, amongst others:

How the Two-Pot System Works: A Game Changer

Previously, all retirement contributions were inaccessible unless you retired or resigned from your work, in which 100% of the savings became available – which led to some bad decisions of people caching out all their retirements early.

The two-pot system counters that by making one-third of contributions available to withdraw from a savings pot while preserving two-thirds of contributions in a retirement pot, ensuring long-term financial security for retirement.

This split allows South Africans to tap into their savings without fully depleting their retirement funds.

Yet, as we’ve seen, access to savings generates significant financial injections into the marketplace. So who stands to benefit?

Industries to Watch

The retail sector is one of the primary beneficiaries of the two-pot system's R21 billion injection into the economy. As consumers tap into their savings to cover immediate expenses like home and car repairs, as well as day-to-day needs, large retailers are well-positioned to capture a share of this spending.

Take Shoprite Holdings, for example. The Group has seen market share gains for five consecutive years, with sales rising 12% to R240.7 billion in 2024, far outpacing the rest of the market thanks to strong performances in their SA supermarkets (contributing 81% of Group sales) and 58.1% growth in online sales via the Checkers Sixty60 platform.

It’s a bit expensive, though, so we wouldn’t discount Woolworths, which is more attractively priced and known for delivering good dividend yield.

And don’t forget the JSE Financial 15 – a large portion of two-pot withdrawals is going to finance and repay debts, so the banks are seeing some action too.

General SA Optimism

As we highlighted in recent weeks:

• The stronger Rand means importers are doing well, specifically pharmaceuticals like Adcock Ingram and tech hardware importer Mustek (who some say could see its pre-tax profits quadruple this year alone).

• And falling interest rates and fuel prices are helping inject more liquidity into the market.

It’s not all smooth sailing, though, as Eskom is trying to get a 36% energy price hike approved, but still a general air of optimism for SA Inc. 

Note: This is not financial advice, merely observations. For personalised financial advice, you can book to speak to a financial advisor here (powered by a registered FSP: No. 51310).

STOCKS AND ALL

💼 Saudi-SA Trade Deal: Saudi Exim Bank signed a $25 million credit agreement with Standard Bank to boost Saudi exports to South Africa. This deal strengthens trade ties as South Africa’s exports to Saudi Arabia grew 23% in 2023.

📦 Mondi’s Polish Investment: Mondi completed a €95 million upgrade at its Świecie containerboard mill, increasing kraft liner capacity by 55,000 tonnes. The investment enhances product quality, improves environmental performance, and meets rising demand for heavy-duty packaging.

📈 New Sibanye Interest: Sanctuary Advisors LLC acquired 208,028 shares of Sibanye Stillwater (NYSE: SBSW) in Q2, valued at $905,000. Despite recent analyst downgrades and a price target reduction to $5.17, institutional interest in the company remains high, with 34.93% of shares owned by institutional investors.

📊 BlackRock Eyes Bonds & Private Markets: BlackRock's earnings report shows $47.8 billion flowing into bonds as investors move away from equities while a survey reveals 91% of insurers plan to boost private market investments, especially in clean energy.

⚡️ NextEra Energy on the Rise: NextEra Energy Inc. saw its stock rally 1.28%, marking five consecutive days of gains. Meanwhile, Sanctuary Advisors LLC acquired 22,103 shares of NextEra Energy Partners, valued at $639,000, as interest in solar energy and clean

HIGGO’S TOP 11

Name	Growth YTD	Price
4Sight Holdings Ltd	48%	ZAC 74.00
Advanced Micro Devices, Inc.	7.16%	$156.64
Bitcoin (BTC / USD)	42.63%	$67,011.04
Brookfield Corp	37.37%	$53.48
Caxton and CTP Publishers and Printers	21.60%	ZAC 1,289.00
Ether (ETH / USD)	12.10%	$2,615.58
Master Drilling Group Ltd	6.40%	ZAC 1,330.00
MercadoLibre Inc	29.07%	$2,033.62
On Holding AG	75.14%	$49.39
Purple Group	25.33%	ZAC 94.00
Santova Ltd	-6.67%	ZAC 700.00
Scottish Mortgage Investment Trust PLC	9.68%	GBX 836.20
PORTFOLIO YTD:	37.44%

*A balance between Bitcoin and Ether represent the EC10 stock pick, click here for more.

UPCOMING EARNINGS REPORTS

These companies are expected to deliver earnings reports in the next few weeks:

16 October 2024 ASML Holding 23 October 2024 NextEra Energy

24 October 2024 Anglo American Platinum 28 October 2024 Pick n Pay Stores

WEALTH HACKER’S KIT

Should You Still Invest in Retirement Annuities?

Retirement annuities (RAs) have long been a go-to for South Africans saving for retirement. 

But with the two-pot system, increasing offshore investment options, and concerns about government regulations, it’s worth asking: Is a retirement annuity still the best option for you?

Here’s what you need to know to make an informed decision:

Retirement Annuities: The Basics

RAs are tax-efficient vehicles that allow you to contribute up to 27.5% of your gross income (up to R350,000 per year) and claim it as a deduction. They also offer tax-free growth, making them an appealing choice for many.

However, your money is locked until age 55, and even then, you can only take one-third as a lump sum. The rest must be invested in an annuity for income.

Are RAs Still Worth It?

1. Tax Benefits

The biggest draw of RAs is the tax rebate. If you’re in a high-income bracket, this can lead to significant savings over time, which can be reinvested to grow your wealth. Just remember, if you don’t reinvest your tax rebate, your overall portfolio value could take a hit.

2. Limited Flexibility

Your RA investments are subject to Regulation 28, which limits your offshore exposure to 45%. For those seeking more international diversification, this can feel restrictive. If you’re looking for maximum flexibility, offshore investments might be a better alternative.

Offshore Investments: A Compelling Alternative

Over the past decade, offshore investments, such as the MSCI World Index, have outperformed the average retirement annuity fund by a staggering 22%. While past performance doesn’t guarantee future returns, the global exposure offered by offshore investments is hard to ignore.

However, offshore investments come with no tax breaks, and any growth will be taxed. It’s also worth noting that currency fluctuations can impact your returns.

THE PEOPLE HAVE SPOKEN

As fuel prices drop, where will you allocate your savings? 

🟨🟨⬜️⬜️⬜️⬜️ 🏠 Home and living expenses (26%)

🟩🟩🟩🟩🟩🟩 🛒 More savings and investments (60%)

⬜️⬜️⬜️⬜️⬜️⬜️ 📈 Expanding my business (0)

⬜️⬜️⬜️⬜️⬜️⬜️ 🎉 Leisure and travel (7%)

⬜️⬜️⬜️⬜️⬜️⬜️ 💻 Upskilling or education (7%)

⬜️⬜️⬜️⬜️⬜️⬜️ 👨‍👩‍👧 Supporting family or dependents (0)

Definitely, it’s a good time to make your own strategic plays, Shaun! 🎯

After a decent fuel price cut last week (on the back of consecutive cuts since June), Transport Minister Gwede Mantashe said they’re in discussions to lower it even further – dropping that his ultimate goal is for fuel in SA to be around the R14 mark.

This, of course, tracks with last week’s speculation of how SA can capitalise on a stronger Rand.

But this week, we take a look back at the Purple Group – which we added to our Top 11 picks for the year, to see how investor hesitation is keeping it undervalued, and perhaps ripe for the picking…

Shining some light on 🔦 

• Purple Group: Is market caution a buying signal?

• Uptober, AI showdowns & construction surges.

• Stock update: Higgo’s Top 11 stock picks for 2024.

• Earnings calendar: Who’s reporting on revenue, when.

• How to maximise your purchasing power in property.

THE SPOTLIGHT

Is Purple Group Caution A Buying Signal?

In September, you’ll remember we added EasyEquities parent Purple Group (JSE) to our Top 10 stock picks for the year – technically turning it into a Top 11. 

Since then, we’ve seen moderate positive performance — up almost 30% for us! — but recent market sentiment has some investors holding back. So, what’s causing this cautious approach, and does it impact our outlook?

Hesitant Investors: An Opportunity?

Recent analysis shows Purple Group’s price-to-sales (P/S) ratio of 4x is just slightly above the industry median of 3.3x, which suggests that the market sees it as performing in line with the broader capital markets industry in South Africa. 

Despite the company’s solid revenue growth – up 13% in the last year and 60% over the past three years – some shareholders seem to fear the stock has reached its performance limits.

Especially since it was under pressure recently due to a large seller who offloaded several million shares for around 80 cents. Now that the seller has exited, the stock has climbed from 70 cents to 90 cents.

This mix of caution and anticipation for good results means some investors are selling at lower prices, but we’re still very optimistic about Purple Group’s long-term potential. As a reminder, here’s why:

• Crypto exposure: Bitcoin prices are up 3x from last year, and EasyEquities’ crypto trading volume boosts potential fee revenue for Purple Group.

• Subscription model success: The R25 subscription model is adding recurring revenue, stabilizing cash flow.

• Record inflows: EasyEquities has seen record inflows, nearing R60bn in assets, and its institutional revenue is growing.

• New products expected: With an estimated EPS of 4 cents and a P/E ratio of around 19, Purple Group has a strong valuation considering its growth potential.

A Low Buy Opportunity

While Purple Group operates in a cyclical industry that may be affected by bear markets, two factors provide more stability: its subscription model and institutional revenue, which are both consistent and “sticky.”

This reduces volatility in its performance, even in challenging market conditions.

So, while investor caution is understandable given the economic landscape, we see this as an opportunity to potentially pick up stock at lower prices – and that’s why it stays in our Top 11 for the year.

Note: This is not financial advice, merely observations. For personalised financial advice, you can book to speak to a financial advisor here (powered by a registered FSP: No. 51310).

HAVE YOUR SAY

STOCKS AND ALL

🏗️ Calgro Jump: Calgro M3 shares surged over 14% following a trading update projecting a 23% to 33% increase in headline earnings per share (Heps) for the six months ended August 2024. The property developer continues to show strong growth, building on 27% profit growth from FY 2024.

🤖 AMD AI Anticipation: AMD's stock is up over 15% year-to-date, with analysts expecting further gains as the company prepares to unveil new AI products at its "Advancing AI" event on 10 October 2024. With 13 "buy" ratings and expectations of new partnerships, AMD could gain ground in the AI space, challenging industry leader Nvidia.

₿ Uptober: Bitcoin surged past $63,000 after U.S. jobs data exceeded expectations, adding 254,000 new jobs. While prices cooled over the weekend, the original cryptocurrency erased earlier losses and is set for what many traders call "Uptober," a historically strong month for Bitcoin.

🦾 AI Showdown: Wondering whether to invest in Palantir or Snowflake? Palantir's accelerating revenue growth and profitability make it the clear AI stock winner as Snowflake struggles with slower revenue growth and significant losses. However, Palantir’s high valuation raises caution for investors, while Snowflake’s lower price-to-sales ratio might offer better long-term value.

☀️ Sunny Outlook: First Solar retains its “buy” rating despite BofA lowering the price target to $321 due to industry delays. With a fully booked backlog through 2026 and U.S. pricing stability, First Solar’s long-term position remains strong.

HIGGO’S TOP 11

Name	Growth YTD	Price
4Sight Holdings Ltd	44%	ZAC 72.00
Advanced Micro Devices, Inc.	18.21%	$172.80
Bitcoin (BTC / USD)	34.35%	$63,126.50
Brookfield Corp	34.60%	$52.40
Caxton and CTP Publishers and Printers	18.68%	ZAC 1,258.00
Ether (ETH / USD)	4.69%	$2,442.54
Master Drilling Group Ltd	6.40%	ZAC 1,330.00
MercadoLibre Inc	27.84%	$2,014.23
On Holding AG	83.51%	$51.75
Purple Group	30.76%	ZAC 98.00
Santova Ltd	-4.67%	ZAC 715.00
Scottish Mortgage Investment Trust PLC	11.36%	GBX 849.00
PORTFOLIO YTD:	37.20%

UPCOMING EARNINGS REPORTS

These companies are expected to deliver earnings reports in the next few weeks:

9 October 2024 Jubilee Metals Group PLC 11 October 2024 Blackrock

14 October 2024 Calgro M3 Karooooo Sasfin Holdings 16 October 2024 ASML Holding

WEALTH HACKER’S KIT

How to Maximise Your Property Purchasing Power

Want to build your wealth in property? 

It’s a solid plan; property is known to be an excellent vehicle for solid, stable wealth protection and moderate growth.

But understanding and growing your purchasing power is the key to success in property investing in SA.

What is Purchasing Power in Property?

Your purchasing power is the maximum loan amount a bank will offer you to invest in property. 

Each property you buy reduces this, but income-generating properties can help boost it back up. 

Essentially, the more you earn, and the more you reinvest in rental properties, the more property loans you can get. This leverage is a powerful tool to build your wealth over time.

How Do Banks Calculate It?

Banks typically use the 30% rule: they won’t loan you more than what amounts to 30% of your gross income. 

For instance, if you earn R60,000 a month, you might qualify for a loan of R1.8 million. But factors like your expenses and other financial commitments also come into play, so, cutting unnecessary expenses can help increase your purchasing power.

Ways to Improve Your Purchasing Power

Want to increase your purchasing power? Focus on raising your income or selling underperforming properties to free up room for new, better investments. 

Plus, banks count around 80% of rental income as part of your affordability, so rental properties can significantly boost your purchasing power.

Pro Tip: Don’t rush into buying a primary residence. It reduces your purchasing power without generating income, limiting your ability to invest in rental properties.

By managing your purchasing power wisely, you’ll be in a stronger position to capitalise on opportunities and grow your property portfolio faster.

THE PEOPLE HAVE SPOKEN

How do you feel about the potential of the ZAR hitting R16 or R15?

🟨⬜️⬜️⬜️⬜️⬜️ 🚀 Excited about more buying power (14%)

🟩🟩🟩🟩🟩🟩 📊 Planning to invest more internationally while the ZAR is strong (46%)

🟨⬜️⬜️⬜️⬜️⬜️ 😟 Worried about the impact on my foreign income (14%)

🟨⬜️⬜️⬜️⬜️⬜️ 💼 Considering shifting more funds into local opportunities (8%)

🟨🟨⬜️⬜️⬜️⬜️ 🤔 Haven’t thought about it yet (18%)

A solid plan, Mari! ☝️

Yes, you can get more for spending Rand in dollar markets, Shaun. 💸

And more business, in general, is always good for the country, hey Xxnadu! 📊

Good insight, Jan. We hoping it’s a while still, but yeah it looks like SARB wants to move strategically and fast to capitalise on that momentum. 🚀

PS: We had our board meeting yesterday, and we are excited to share with you what’s coming up over the next few weeks — see you next week.

Buoyed by recent rate cuts, the South African Rand has been performing exceptionally well of late, fueling theories that this could be the perfect opportunity for SA to make some big moves against the dollar, fuel prices and inflation in over a decade. 

Yet, we’ve been adapted to a stronger Dollar for so long, how do you switch to ensure you benefit from a potential continued reversal?

Shining some light on 🔦 

• A strengthening Rand and falling inflation.

• SA bank moves, gold on the up & Meta VS Alphabet.

• Stock update: Higgo’s Top 11 stock picks for 2024.

• Earnings calendar: Who’s reporting on revenue, when.

• How to conquer debt and gain financial freedom.

THE SPOTLIGHT

THE SPOTLIGHT

Capitalising on a Stronger Rand

Over the past year, the South African rand (ZAR) has strengthened significantly against the US dollar (USD). As of late September, the USD/ZAR exchange rate dropped below R17 for the first time since early 2023, signalling a robust performance from the ZAR. 

But why is the rand gaining momentum, and where might it be heading?

Why the ZAR is Strengthening

• Prompted by low inflation, the US Federal Reserve’s 50bps rate cut softened it against global markets a bit.

• Off inflation falling to 4.4% in August, the SARB also cut rates, but only by a cautious 25bps.

• At the same time, the crude oil price is falling and commodities like gold and platinum (key SA exports) have rebounded.

• SA is also riding high on great positive sentiment due to the new GNU government structure.

• All while the SA economy is growing, expected to see its best performance in over a decade in the next two years.

Perfect Storm: A Strategic Play by SARB?

Some say this might just be the opportunity SA was looking for. With fiscal policy almost always eyeing inflation, a stronger Rand against the Dollar amid falling oil prices sets SA up to tackle one of our biggest inflation influencers: the fuel price.

As petrol and diesel prices fall, the cost of transporting goods decreases, leading to lower prices for food, clothing, and other essentials. But it also helps lower operating costs for local businesses and can help drive economic growth.

And pundits haven’t missed that economic growth could attract more foreign investment (currency), further strengthening the Rand. Some believe we could see the Rand reaching R16 or even R15 range to the Dollar in the next few months.

This could have a powerful effect: Cheaper imports, lower inflation and improved operational costs. But it could come with mixed consequences for South African investors exposed to international markets.

Benefiting from the ZAR Upswing

Now, many in South Africa have set themselves up for the opposite: SA individuals and companies delivering services to international clients will be the first to feel the pinch as the Rand improves, eroding previously inflated margins.

To adapt, consider:

• Using the stronger buying power to invest in foreign assets or diversify portfolios globally.

• But keep an eye on the local scene: Lower business costs could see SA Inc. perform well – including those who’ll benefit from lower import costs.

• If the Rand keeps strengthening, putting capital into assets that appreciate in value domestically (such as property) could benefit greatly from renewed economic growth.

Know How and Where to Invest

While the outlook is positive, South Africa’s economic growth will depend on continued reforms and improvements in key sectors.

So it always pays to focus on your core investment fundamentals like your risk profile and personal goals.

And, naturally, we can help you with those right now…

Note: This is not financial advice, merely observations. For personalised financial advice, you can book to speak to a financial advisor here (powered by a registered FSP: No. 51310).

STOCKS AND ALL

🏦 Big Bank Moves: Major South African banks are shutting down branches across the country in response to declining demand for physical banking services, with digital transformation cited as the primary driver.

🛢️ Pan African Earnings: Analysts forecast rising gold production for Pan African Resources, expected to reach 250,000 ounces annually by 2026. The company increased its dividend to R0.22 per share in 2024, with the potential for higher payouts as production rises and costs flatten.

🔍 Alphabet on Top: Alphabet’s stock is benefiting from its leading position in search and artificial intelligence, with Pivotal Research giving it a "Buy" rating and a $215 price target. With growth in Google Cloud, YouTube, and strong financials, Alphabet is poised for further expansion in the tech space, even as it faces regulatory challenges.

📊 Meta Contender: Alphabet and Meta dominate the digital ad market with a combined 57% market share. While Alphabet leads in search engine advertising, Meta's AI-driven apps fueled outsize sales growth in 2024. However, ongoing antitrust cases pose risks to Alphabet’s search and streaming revenues, possibly giving Meta an edge for growth potential in the near term.

HIGGO’S TOP 11

Name	Growth YTD	Price
4Sight Holdings Ltd	48%	ZAC 74.00
Advanced Micro Devices, Inc.	9.28%	$159.75
Bitcoin (BTC / USD)	30.92%	$61.517.40
Brookfield Corp	36.35%	$53.08
Caxton and CTP Publishers and Printers	17.83%	ZAC 1,249.00
Ether (ETH / USD)	13.53%	$2,648.91
Master Drilling Group Ltd	2.80%	ZAC 1,285.00
MercadoLibre Inc	31.13%	$2,066.12
On Holding AG	75.00%	$49.35
Purple Group	4.00%	ZAC 78.00
Santova Ltd	2.00%	ZAC 765.00
Scottish Mortgage Investment Trust PLC	9.02%	GBX 831.20
PORTFOLIO YTD:	33.85%

UPCOMING EARNINGS REPORTS

These companies are expected to deliver earnings reports in the next few weeks:

11 October 2024 Blackrock

14 October 2024 Calgro M3

WEALTH HACKER’S KIT

How to Conquer Your Debt and Gain Financial Freedom

Debt can be a serious roadblock on the path to financial freedom. It limits your choices, increases stress, and drains away your disposable income. 

But the right strategy can help you tackle it head-on and reclaim your financial flexibility.

Why Debt Sucks

Debt reduces your ability to invest in yourself, your lifestyle, and your future. 

Here’s a quick reminder:

• Assets generate passive income and grow your wealth.

• Liabilities drain your finances and limit your ability to create wealth.

Debt falls squarely into the "liabilities" category, but fortunately, you can conquer it using one of two key methods: the Snowball Method or the Avalanche Method.

Choose Your Debt-Smashing Strategy: Snowball vs. Avalanche

1. The Snowball Method: This method focuses on repaying the smallest debt first. As you clear each balance, you gain momentum, like a snowball rolling downhill, which can be incredibly motivating. The satisfaction of crossing debts off your list can keep you going even when the bigger ones loom ahead.

2. The Avalanche Method: Here, the focus is on tackling the debt with the highest interest rate first. This method is technically more cost-effective since it reduces the overall amount you pay in interest over time. It requires discipline but results in more savings.

Which One’s Right for You?

While the Avalanche Method saves more money in the long run, the Snowball Method can give you a powerful psychological boost through "wins" early in the process. 

The emotional lift from seeing progress might be just what you need to stay on track.

Want to get your debt paid off faster so you can invest more in building wealth?

We’ve built the tools to help you start right now…

THE PEOPLE HAVE SPOKEN

Where’s your focus in the AI investment space?

🟩🟩🟩🟩🟩🟩 🏆 Investing in chip manufacturers like AMD and Nvidia (30%)

🟩🟩🟩🟩🟩🟩 💼 Keeping an eye on high-risk AI startups (30%)

🟨🟨🟨🟨⬜️⬜️ 📊 Staying cautious with more traditional tech stocks (20%)

🟨🟨🟨🟨⬜️⬜️ 🌱 Exploring AI-related ETFs and mutual funds (20%)

What you said…

Indeed, Eric. We have AMD as one of our top picks for the year, and it’s been a decent performer overall. ⚡

See you next Wednesday for another edition of Money Matters.

Riding high off last week’s 25 basis point interest rate cut (despite most of us having hoped for a little more), the markets responded well and there’s a general optimism in SA and globally (off the US’s rate cut).

This, of course, means relief for consumers and a little more liquidity in the market, but also paves the way for more consecutive rate cuts over the next few months.

Now, one of the questions on your mind is likely how you’re going to make the most of this, and we’ve had some comments about AI and tech in your responses recently. So today we’re looking at the sector – specifically, the big chip manufacturers…

Shining some light on 🔦 

• Smart AI investment: The battle of the chip giants.

• Tesla rallies, a Scottish bargain & 4Sight’s growth.

• Stock update: Higgo’s Top 10 stock picks for 2024

• Earnings calendar: Who’s reporting on revenue, when

• How to strategically diversify your portfolio.

THE SPOTLIGHT

Smart AI Tech Investment

It’s no secret that the AI tech space has attracted a lot of interest and scepticism of late – the market has grown by over 150% since 2022 and investment by over 50% YoY.

Yet a lot of that has been in the high-risk strategic development side – your Microsofts and OpenAI’s signing big deals the average investor will never even see.

So how do you get a slice of the AI pie? Well, one worthwhile option is the established market performers that serve/supply the big AI cats – one of our favourites being your chip manufacturers: they have established presences on stock markets, have earned investors money for some time, yet are still positioned to benefit off the AI wave.

Here are the AI chip investments to note…

Institutional Confidence in AMD

Recent filings reveal that British Columbia Investment Management Corp significantly increased its holdings in Advanced Micro Devices (AMD) by nearly 60% in the second quarter of 2024. 

This move reflects growing confidence among institutional investors in AMD's potential amid the accelerating AI movement. Other institutional investors are following suit:

• Tradewinds Capital Management LLC more than doubled its holdings in AMD.

• Morton Brown Family Wealth LLC nearly doubled its investment.

• New positions were opened by Fairway Wealth LLC and Northwest Bank & Trust Co.

• Semmax Financial Advisors Inc. increased its stake by over 900%.

Analysts are also optimistic, with the majority rating AMD as a "buy" and setting price targets that suggest substantial upside potential.

Nvidia's Position in the AI Landscape

Despite a recent dip in stock performance, Nvidia remains a powerhouse in the AI sector. 

Concerns about the sustainability of AI spending and increased competition have caused some investors to hesitate. However, recent insights from Wall Street suggest that these worries may be overblown – JPMorgan analysts predict that AI infrastructure capital expenditures will accelerate, estimating that spending from major cloud providers like Microsoft, Amazon, and Alphabet will grow at 24% annually over the next five years.

Even losing its position as the top-performing S&P 500 stock didn’t stop analysts from arguing that now might be the time to invest. In fact, Nvidia has also been a standout over the past five years, leading the list of "10-bagger" stocks – those that have increased tenfold in value. 

That said, you still practice caution with these stocks because the market remains volatile.

Navigate the AI Investment Trend with Our Tools

The AI movement is not just a technological trend; it's reshaping the investment landscape. And to help you make informed decisions in this evolving market, we're offering two valuable resources:

1. Risk Profile Assessment Tool: Understand your risk tolerance to make investment choices that align with your financial comfort zone – see yours with Finimals now.

2. Investment Goal Management Tool: Set, track, and achieve your financial objectives with personalised strategies – manage yours with Goals here.

Note: This is not financial advice, merely observations. For personalised financial advice, you can book to speak to a financial advisor here (powered by a registered FSP: No. 51310).

STOCKS AND ALL

📈 4Sight’s Growth: 4Sight Holdings (JSE:4SI) achieved a 41% annual EPS growth over the past three years, with revenue increasing 28% to R941 million while maintaining stable EBIT margins. Insiders hold a significant 56% stake, aligning their interests with shareholders. CEO compensation is below the median for similar companies, reflecting prudent management.

🔌 Sasol & Eskom Explore LNG: Sasol and Eskom signed an agreement to explore liquefied natural gas (LNG) supply, aiming to prevent a 2027 gas supply crisis. While Sasol (SSL) has been listed among the “worst stocks under $10”, it reported improved productivity, including a 6% rise in Mozambique gas production and reduced capital expenditure.

🌍 Brookfield’s $2.4B Raise: Brookfield Asset Management has raised $2.4 billion for a climate-finance fund, targeting clean energy in emerging markets. Supported by the UAE’s Alterra fund, it aims for a $5 billion total capital raise by 2025. Meanwhile, British Columbia Investment Management Corp sold 163,245 shares of Brookfield in Q2, trimming its stake by 9%. Despite this, Brookfield’s stock has gained traction, recently trading at a 1-year high of $47.34.

👟 On Shorts: Swiss sportswear company On (NYSE), known for its partnerships with Roger Federer and Zendaya, saw a 28% sales increase in Q2 2024, despite logistical challenges. However, 14.82% of its shares are currently shorted, making it one of the most shorted ADR stocks. While hedge funds remain bullish, analysts believe other sectors, like AI, may offer better returns.

🚗 Tesla Rallies: Tesla shares jumped 5% to $250, their highest in two months, driven by anticipation of strong Q3 deliveries (analyst estimate: 470k vehicles) and excitement around the upcoming Robotaxi Day (10 Oct.) Tesla’s stock is up 36% in three months, outperforming the S&P 500’s 5% gain. Despite challenges in Europe, Tesla’s robust performance in China and a Cybertruck ramp-up in the US are fueling optimism.

🏦 Scottish Bargain?: Despite a 4.5% gain year-to-date, Scottish Mortgage Investment Trust (LSE: SMT) is trading at a 10.3% discount to its net asset value, offering investors the chance to buy stakes in growth companies like SpaceX at a lower price. With interest rate cuts expected, this could reignite interest in growth stocks, making it an appealing option for investors.

HIGGO’S TOP 11

Name	Growth YTD	Price
4Sight Holdings Ltd	38%	ZAC 69.00
Advanced Micro Devices, Inc.	8.30%	$158.32
Bitcoin (BTC / USD)	36.41%	$64.068.80
Brookfield Corp	35.63%	$52.80
Caxton and CTP Publishers and Printers	16.98%	ZAC 1,240.00
Ether (ETH / USD)	13.53%	$2,648.91
Master Drilling Group Ltd	3.84%	ZAC 1,298.00
MercadoLibre Inc	33.98%	$2,111.00
On Holding AG	79.33%	$50.57
Purple Group	6.67%	ZAC 80.00
Santova Ltd	2.93%	ZAC 772.00
Scottish Mortgage Investment Trust PLC	8.03%	GBX 823.60
PORTFOLIO YTD:	33.96%

UPCOMING EARNINGS REPORTS

These companies are expected to deliver earnings reports in the next few weeks:

1 October 2024

• Capitec Bank

WEALTH HACKER’S KIT

Balancing Concentration When Investing

In school, we're often told to focus on one thing – to specialise – because the world rewards mastery in a specific area. Yet when it comes to investing, the common advice is to spread your assets across a broad, well-diversified portfolio. Contradictory, isn't it?

What Is Diversification?

Diversification is a risk management strategy popularised by economist Harry Markowitz. It involves investing in a variety of assets that aren't closely correlated. The principle is straightforward: if one investment underperforms, others may perform well, balancing out your overall returns.

What Is Diworsification?

Coined by legendary investor Peter Lynch, "diworsification" refers to over-diversifying your portfolio to the point where it becomes less efficient. By spreading assets across too many investments, you might dilute potential returns and end up with a portfolio that underperforms compared to a more focused strategy.

Which Strategy Suits You?

• For Maximum Growth: Concentrating more on equities could offer higher returns but comes with increased risk.

• For Stability: Diversifying across various asset classes can provide more consistent, albeit potentially lower, returns.

Real-World Scenarios

During Market Downturns:

• 2008 Financial Crisis: The JSE All Share Index (ALSI) dropped by 23.23%, while South African bonds, represented by the average of the interest-bearing variable-term sector, increased by 14.97%. A diversified portfolio blending stocks and bonds would have softened the blow compared to a stock-only portfolio.

During Market Upswings:

• 2009 Recovery: The JSE ALSI soared by 32.13%, whereas bonds returned -1.69%. An investor heavily concentrated in equities would have reaped higher gains than one with a diversified portfolio.

Over the Long Term:

• From 2003 to 2022, the annualized return of the JSE ALSI was 13.34%, while bonds returned 9.88%. A diversified portfolio might offer more consistent returns over time but could underperform compared to a focused equity investment.

How Much Should You Invest in Equities?

A common guideline is the "120 Minus Your Age" rule:

1. Subtract your age from 120.

2. The result is the percentage of your portfolio to allocate to equities.

Example: If you're 40 years old:

• 120 – 40 = 80

• Allocate 80% of your portfolio to equities.

This rule suggests that younger investors can afford to take on more risk for potential growth, gradually shifting to more conservative investments as they age. 

However, it's essential to regularly review and adjust your portfolio to ensure it aligns with your evolving goals and risk tolerance.

And you can do that right now, in just a few minutes…

THE PEOPLE HAVE SPOKEN

We asked if you know your risk profile and investment goals, and most need a refresher…

🟩🟩🟩🟩🟩🟩 🤓 Yes, but I could really use a refresh! (38%)

🟨🟨🟨🟨⬜️⬜️ 📊 No, better check out those FinMeUp tools right now! (25%)

🟨⬜️⬜️⬜️⬜️⬜️ 📈 I know my profile, but I could use help tracking my goals and progress. (12%)

🟨🟨🟨🟨⬜️⬜️ 🤯 I didn’t even know you had to think about these things before investing! (25%)

No problem, though, you can get your risk profile assessed for free with Finimals.

And, then, for strategic wealth-building: you can set, track and manage your investments with Goals.

It’s a big week, as evidenced by the Rand hovering just above a 13-month low to the Dollar. And everyone’s eyes are on the US Federal Reserve and SA Reserve Bank as we expect them to announce the first interest rate cuts since Coivd. 

Off the back of SA’s CPI dropping to 4.6% in August, we expect the SARB to cut interest rates by at least 25 basis points to 8%, after maintaining it at a 15-year high of 8.25%.

But with all that market optimism, it's easy to make mistakes.

Here are two things to do before rate cuts, to ensure you build wealth in SA…

Shining some light on 🔦 

• 2 Investment must-dos before interest rate cuts.

• SA’s new banks, BTC’s $60k flirts & affordable Google.

• Stock update: Higgo’s Top 10 stock picks for 2024

• Earnings calendar: Who’s reporting on revenue, when

• Saving VS investing: what’s best for you?

THE SPOTLIGHT

Rate Cuts: 2 Things You Need to WIN

It’s exciting times all around this week as both the US and South Africa are expected to cut interest rates, which means lower repayments on loans (homes, debt) and more liquidity in the markets, priming optimism and growth.

And we’re only hours away…

The US Federal Reserve’s Open Market Committee is expected to announce the first US rate cut in 4 years by 20:00 tonight (Wednesday 18 Sept) – and it seems to be just a question of whether it’ll be a 50 bps cut or 25 bps, with potentially more cuts on the horizon.

In South Africa, the rate decision is expected at around 15:00 tomorrow (Thursday 19 Sept), and it has similar 25bps to 50bps expectations.

What It Means For You

This will be SA’s first rate cut in 4 years and, generally, it presents a golden opportunity to capitalise on growth and increased liquidity.

But how do you get the maximum benefit for such a once-every-so-often occurrence?

We’re breaking it down into two key strategic moves to help you build for the future right now…

1. Know Your Risk Profile

Rate cuts increase market optimism, but investing without knowing your risk tolerance can lead to hasty and potentially costly decisions. 

Your risk profile determines how much risk you're comfortable with and how much you can realistically take on, based on your actual financial situation, long-term goals, and personality.

If you want to make smart, future-proof investments, knowing where you stand on the risk spectrum is vital.

Discover yours for free right now: FinMeUp has built a tool specifically designed to help determine your risk profile. It’s fast, easy, with an element of fun and it costs you nothing – get your risk profile with Finimals right now.

2. Focus on Your Key Investment Goal(s)

Investing without a clear goal is like driving without a destination – you might move, but you won’t get anywhere meaningful. 

Here’s why goal-focused investing is essential:

• It gives you clarity and focus: Having a specific financial target (whether it’s retirement, buying a home, or building wealth) helps you filter out distractions and stay focused.

• It helps you measure your progress: A clear goal allows you to track progress and adjust your strategy if needed. For example, if your goal is long-term wealth, a temporary market dip is less of a concern than missing your contribution targets.

• It means you’re strategy-driven, not emotional: Goals act as a safety net to prevent emotional decision-making. If you know your goal and have a strategy to achieve it, you're less likely to make rash moves during periods of volatility.

Set, track and manage your investment goal: We’ve also built a remarkable tool that helps you keep focused and strategic, for more goal-focused wealth-building – use the Goals tool to get the max out of your investments.

Note: This is not financial advice; it is merely observations. For personalised financial advice, you can book to speak to a financial advisor here (powered by a registered FSP: No. 51310).

STOCKS AND ALL

🏦 Battle of the Banks: As Discovery Bank hits 1 million customers, TymeBank attracts major investment and Capitec leads in users with 23 million customers, Old Mutual announced it’s preparing to launch a new bank by the end of 2024. It’ll be joined by Postbank, the Young Women in Business Network (YWBN), and SA Innovative Financial Services Cooperative (SAIFSC), all preparing to take on SA’s traditional Big 4.

📈 Karooooo's Growth Surge: IoT and SaaS company Karooooo reported a 15% revenue increase in Q1 FY2025, with 80% of its income from South Africa. Its Cartrack platform drives growth, especially in Southeast Asia, which saw a 24% surge in FY2024. Shares are up 62% year-to-date, making it a strong contender for investors in emerging markets.

🪙 Bitcoin Flirts with $60K as Fed Decision Nears: Bitcoin briefly hit $60K but slid below again this week as traders brace for the Fed's rate decision this week. A 0.25% or 0.5% cut could drive crypto volatility, with BTC increasingly tied to macro trends.

📉 Alphabet Drops 18%, a Bargain?: Alphabet (GOOG) shares have fallen 18% to $159. With a forward P/E of 18.3 and growth potential in digital ads and cloud computing, it’s seen by some as a bargain despite AI and regulatory risks.

🚀 PDD Holdings Faces US Scrutiny Amid Growth: PDD Holdings (PDD) stock dropped 2.4% following news that the Biden administration plans to restrict a trade exemption that benefits Chinese firms like Temu. Despite this, PDD reported an 86% revenue increase in Q2 2024, driven by its growth in e-commerce and agriculture. Analysts maintain a bullish outlook, with a price target suggesting a 79% upside.

HIGGO’S TOP 11

Name	Growth YTD	Price
4Sight Holdings Ltd	40%	ZAC 70.00
Advanced Micro Devices, Inc.	3.17%	$150.82
Bitcoin (BTC / USD)	28.49%	$60.320.00
Brookfield Corp	29.26%	$50.32
Caxton and CTP Publishers and Printers	17.83%	ZAC 1,249.00
Ether (ETH / USD)	1.05%	$2,357.76
Master Drilling Group Ltd	1.60%	ZAC 1,270.00
MercadoLibre Inc	31.65%	$2,074.26
On Holding AG	74.65%	$49.25
Purple Group	4.00%	ZAC 78.00
Santova Ltd	2.67%	ZAC 770.00
Scottish Mortgage Investment Trust PLC	7.71%	GBX 821.20
PORTFOLIO YTD:	31.10%

WEALTH HACKER’S KIT

Saving vs. Investing: What’s Best for You?

From childhood, we’re taught to save – whether it’s in a bank account or a piggy bank. But what if investing was the smarter option?

At the heart of the matter is this: how hard is your money working for you? If growth is not outpacing inflation, you’re effectively losing purchasing power as life gets more expensive. 

What’s the Difference?

Though often confused, saving and investing are not the same. 

Savings typically sit in low-risk cash assets (like bank accounts), while investing exposes your money to higher-risk assets with the potential for greater returns. 

As the old saying goes, higher risk often means higher reward.

The 2022 example below from Onemint highlights how different asset classes offer varying returns:

Risk vs. Return in South Africa: Practical Examples

As you can see, leaving your money in a bank earning 6.22% means you’re actually 0.98% poorer by the end of the year, thanks to inflation. 

The more risk you take by moving into higher-risk asset classes, the better your return after inflation.

Making Your Money Work Harder: The Rule of 72

An easy way to calculate how effectively a vehicle will put your money to use is with the Rule of 72: For example, if the Fairtree Equity Fund has returned 13.94% annually over the past 10 years, dividing 72 by 13.94 gives you 5.16 – the number of years it takes to double your investment.

Want to know how long it will take to triple your money? The Rule of 114 works the same way – just divide 114 by your rate of return!

But It's All About Your Personal Goals

That said, there are of course circumstances where saving is preferable to investing: When you have short-term goals or are building up an emergency fund, you don’t want those locked away, they need to be accessible.

Similarly, different people have different risk profiles and appetites and might need to bank on slower-growing vehicles that offer more security – the same goes for when the market is in turmoil.

So how do you know what’s best for you?

Again, you start by:

• Determining your personal risk profile – do it for free right here.

• Let your financial goals guide you – set and track your goals with this handy tool.

THE PEOPLE HAVE SPOKEN

We asked how you’d react to an interest rate cut, and most look forward to winning in the stock market…

🟨🟨🟨🟨🟨⬜️ 💸 Saving more – I’ll put the extra cash from lower repayments into my investment fund! (37%)

🟨🟨⬜️⬜️⬜️⬜️ 🏡 Go property hunting – Time to explore the real estate market with cheaper bonds. (16%)

🟩🟩🟩🟩🟩🟩 📈 Stock market dive – Cheaper borrowing could boost stocks, and I’m in!  (42%)

⬜️⬜️⬜️⬜️⬜️⬜️ 🤔 Waiting it out – I’m still watching the markets to see how things unfold. (5%)

What you said…

Nice one, Asethemane. Building a cushion for emergencies means you can better weather most any future storms. 😎

THE UPDATE

Higgo van Biljon on LinkedIn: 5 years already! 🎂 

Time flies! It’s crazy to think it all started with a WhatsApp group. I’m incredibly grateful to everyone involved in this journey.… | 14 comments on LinkedIn #finmeup #fintech #edtech #startup #5years #companybirthday

www.linkedin.com/posts/higgo-van-biljon-38b282168_finmeup-fintech-edtech-activity-7241747040446124032-qBNR

Instagram post

Good news: Apart from the new iPhone 16 launch, locally, the FSCA has given the green light for the JSE to split its main board to help smaller companies raise capital with less red tape.

The big one to watch today, though, is the US’s CPI announcement this afternoon, because it could signal interest rate cuts which will likely spur SA rate cuts, too.

Here’s what we think could happen…

Shining some light on 🔦 

• September interest rate cuts – what we’re expecting.

• The Caxton dip, the transport boom & On kicking Nike.

• Stock update: Higgo’s Top 10 stock picks for 2024

• Earnings calendar: Who’s reporting on revenue, when

• How to use your home loan to become your own bank.

Ready for Rate Cuts?

All eyes are on the US Consumer Price Index (CPI) announcement set for later today at 14:30 PM. 

With inflation seemingly under control – we love using this tracker because it’s been so very accurate of late – we’re looking at a scenario where the US Federal Reserve could announce interest rate cuts in September. 

Here’s what we’re predicting and how it could affect South Africa.

US Rate Cuts: What to Expect

The market is pricing in a 30% chance of a 50bps (0.50%) cut and a 70% chance of a 25bps (0.25%) cut – see the insights by Investec’s chief investment strategist Chris Holdsworth. 

This reflects growing confidence that inflation is cooling, with the potential for more cuts by the end of 2024, possibly amounting to a total of 100bps. 

The trajectory could see further reductions into 2025, with up to 250bps cuts expected by next October.

• A 50bps cut would mean a 0.5% reduction in the interest rate, immediately lowering borrowing costs and easing financial conditions for consumers and businesses alike.

• A 25bps cut would take a more gradual approach, possibly with another 25bps cut later in the year, giving markets and borrowers a slower, more measured relief.

Internally, most of the team believes it’ll be a more measured set of maybe 3 or so consecutive 25bps cuts over the next few months.

How This Affects South Africa

South Africa tends to follow US monetary policy trends, meaning a US rate cut could signal a local rate reduction soon. 

Our forecast is that we could see a similar 50bps cut here in South Africa, or consecutive 25bps cuts starting as early as September and continuing over the next few months.

On top of that, South Africa's parliamentary finance committee is also reviewing inflation targeting. They’re considering reducing the current target range of 3-6% to a tighter band of 2-4%, with an ultimate goal of stabilizing inflation at 3%. 

This move would aim to bring more stability to the Rand and strengthen the currency against foreign competitors.

What This Means for You

From a personal finance perspective, interest rate cuts can be a powerful wealth-building tool. 

Here’s how:

1. Lower borrowing costs: Whether it’s your home loan, car finance, or personal debt, lower interest rates mean cheaper monthly repayments. This frees up extra cash that can be redirected toward investments or savings.

2. Investment opportunities: Rate cuts tend to stimulate stock markets and create favourable conditions for investment growth. Equities often perform well as businesses benefit from cheaper borrowing, and investors may want to capitalize on this momentum.

3. Real estate: Property becomes more accessible as lower rates make bonds more affordable. This can drive demand for real estate, increasing property values over time.

Opportunity to refinance: If you already have a loan, rate cuts present a perfect chance to refinance and secure a lower interest rate, further reducing your debt load and fast-tracking your financial goals.

Note: This is not financial advice, merely observations. For personalised financial advice, you can book to speak to a financial advisor here (powered by a registered FSP: No. 51310).

Want to learn more about FIRE? Click here.

STOCKS AND ALL

📰 Caxton & CTP Dip: Caxton and CTP reported FY 2024 revenue of R6.9 billion, down 1.1%, with net income falling 11%. Despite the drop, shares are up 9.5% this week.

🚚 Frontier Transport's 5-Year Boom: Investors in Frontier Transport Holdings (JSE) are celebrating a massive 284% total shareholder return over the past five years, driven by steady earnings growth. The stock also saw a 94% boost in the last year, including dividends.

🟡 Pan African Earnings Surge: Pan African Resources expects earnings to rise by 25%-35% for FY 2024, with headline earnings per share between US3.99c and US4.31c, boosted by higher gold sales and prices.

🌱 NextEra: Renewable Energy Leader: NextEra Energy (NYSE) is the world’s largest wind and solar producer with a market cap of $165.47 billion and strong hedge fund support. Its renewable capacity and long-term investments make it a top stock to watch.

👟 Nike vs. On Holding: Nike’s stock is down 24% this year due to slow growth and a shift to direct-to-consumer sales. Meanwhile, On Holding has surged nearly 70%, driven by strong performance and expansion into new markets. While Nike tries to regain ground, On looks like the stronger stock for now.

HIGGO’S TOP 10

Name	Growth YTD	Price
4Sight Holdings Ltd	50%	ZAC 75.00
Advanced Micro Devices, Inc.	-2.28%	$142.84
Bitcoin (BTC / USD)	19.71%	$56,268.06
Brookfield Corp	21.35%	$47.24
Caxton and CTP Publishers and Printers	15.09%	ZAC 1,220.00
Ether (ETH / USD)	0.37%	$2,324.53
Master Drilling Group Ltd	4.00%	ZAC 1,300.00
MercadoLibre Inc	28.05%	$2,017.58
On Holding AG	60.50%	$45.26
Purple Group	5.33%	ZAC 79.00
Santova Ltd	2.13%	ZAC 766.00
Scottish Mortgage Investment Trust PLC	4.51%	GBX 796.80
PORTFOLIO YTD:	29.42%

UPCOMING EARNINGS REPORTS

These companies are expected to deliver earnings reports in the next few weeks:

11 September 2024

• Pan African Resources

12 September 2024

• Sibanye-Stillwater

19 September 2024

• Remgro

WEALTH HACKER’S KIT

How to Become Your Own Bank

By using your home loans and access bond…

Most people don’t realise how powerful their home loan can be. When used smartly, you can turn it into a tool for financial freedom – essentially becoming your own bank. 

Here’s how…

Amortisation: How Home Loans Work

Amortisation simply means paying off debt over time with regular payments. With a home loan, your monthly payment is split between interest (the bank’s profit) and the principal (your debt).

At first, most of your payment goes to interest, but as time goes on, more goes to reducing the loan. Make extra payments early, and you’ll save big on interest and shorten your loan term. 

On a R1 million loan at 9.5% interest, this balance shifts around year 12.

How an Access Bond Works

An access bond allows you to withdraw extra payments you've made on your loan. 

Paying extra reduces your loan balance, lowering the interest charged. 

The best part? You can still access those extra funds anytime. Whether it’s reducing your repayment or withdrawing to invest elsewhere, the power is in your hands. Just check how your bank handles extra payments—policies vary.

Home Loan vs Savings Account

With current savings rates around 7–8% and the prime interest rate at 11.75%, your access bond offers better value. Instead of earning interest, you’re saving it, and those savings are tax-free!

Use Your Property to Fund Your Future

As you pay off your loan or your property’s value increases, you build equity. 

You can tap into this equity by taking a second loan or withdrawing from your access bond – ideal for funding new innitiatibes, such as business ventures.

THE PEOPLE HAVE SPOKEN

We asked what’s driving your immediate investment decisions, and most are eyeing new products… 

🟨🟨🟨⬜️⬜️⬜️ 📉 Falling interest rates – more disposable income means more investing! (20%)

🟨🟨🟨⬜️⬜️⬜️ 💰 Crypto recovery – Bitcoin’s rise is drawing my attention. (20%)

🟩🟩🟩🟩🟩🟩 💼 SA investment platforms like EasyEquities – new products are looking good. (40%)

🟨🟨🟨⬜️⬜️⬜️ 🤷‍♂️ I’m still figuring it out – waiting to see how markets shift this month. (20%)

What you said…

Keep an eye out for today’s news, Asethemane. Rate cuts look very likely now. 🔎

Definitely, Shaun. More liquidity and optimism in the market mean it’s time to grow. 📈

See you next week Wednesday — and remember, your money matters.

Big news: We’re updating Higgo’s Top 10 to a Top 11.

Why? Well, there’s an opportunity that we find quite attractive – EasyEquities’ parent The Purple Group looks set to make some big waves in the next few months, and the price and fundamentals look pretty good.

Here’s what you need to know…

Shining some light on 🔦 

• The Purple Group opportunity & likely interest rate cuts.

• Coronation’s Bytes buy, Shoprite’s big moves & Scottish Mortgage buybacks. 

• Stock update: Higgo’s Top 11 stock picks for 2024

• Earnings calendar: Who’s reporting on revenue, when

• How inflation affects you – and how to beat it.

2 Hot September Investment Topics to Watch

September is already an exciting month as anticipation builds for potential lowered interest rates, both in SA and from the US. But Higgo recently spotted an opportunity to upgrade The Purple Group to a punt in his personal portfolio.

Here’s why…

1. Things are Looking Good for Purple Group

The Purple Group, the JSE-listed parent of SA investment platform EasyEquities currently trades around 75c with a market cap slightly exceeding R1 billion. But there’s reason to believe they will grow significantly over the next few months.

So much so that Higgo is adding it to his Top 10 stocks (guess that makes it the “Top 11” now) for 2024.

The reason: Well you’ll remember that we wrote an initial buy stock pick Purple in 2020 at 33c per share, and 2020 and 2021 were really good years for them. But then interest rates, hype and poor economic performance hit the stock market in ‘22 and ‘23 and they took a big knock – you might remember that Higgo mentioned in a YouTube video that he sold his Purple in 2022 after it had a massive pump.

But a lot has happened since then. From strategic acquisitions to growth in assets, institutional revenue, more stock market activity, potential interest rate cuts in September and the long tail of their subscription model, there are plenty of reasons we’re upgrading Purple to a punt…

Twitter tweet

Some Reasons We Expect Purple to Perform Well

• The average Bitcoin price is almost 3x higher than last year, meaning EasyEquities’ fees on just their current Easy 10 crypto product assets should be 3 times higher (let alone that people would have bought and traded more crypto, too).

• Despite the backlash of EasyEquities switching to a R25 subscription model a while back, it doesn’t seem that usage dropped; in fact, it had the opposite effect – so if they converted only 100k of their circa 1M active users to the R25 sub, that’s a lot of additional revenue that will come in now.

• Their CMO recently posted on X that EasyEquities is now “near R60bn in assets” and that they’ve seen record inflows month-to-month from about February this year.

• Their institutional revenue is growing – which is sticky revenue.

• And they are expected to launch some new products soon.

• On a valuation basis, if you assume (guestimate) an EPS of around 4 cents, it currently puts them on a PE of around 19, which is not too shabby.

All in all, the hype plus the positive revenue increases make us believe they’re a good buy at 75-odd cents — there seems to be some downward pressure on the price at the 80c mark (been holding steady for a few months), but that will likely change when they announce earnings; usually around August, so could be any day now.

Disclaimer: This stock pick should not be taken as financial advice. This is what Higgo is doing in his personal portfolio. Purple is a small cap, and with small caps comes risk. Always do your own due diligence.

2. Interest Rate Cuts Might be VERY Likely

Cleveland inflation tracking has proven to be phenomenally accurate in the past – not always 100% but generally very close to the actuals. 

And if you look at the drop in both the US and South African inflation, it’s looking extremely likely that we’ll see interest rate cuts as early as September.

We’re not sure when or by how much. But cuts will be good for consumers – anyone who has debt can expect some pricing relief – which is good for investors and ecosystems, as rate cuts mean people have more disposable income which injects liquidity and can boost investment performance.

We’re particularly optimistic about South Africa currently, but we’d be a little more cautious around US stocks, as they look to be a bit overpriced. More to follow on this topic.

Note: This is not financial advice; it is merely observations. For personalised financial advice, you can book to speak to a financial advisor here (powered by a registered FSP: No. 51310).

PS: Want to know your personal profile?

Our community has been engaging with Finimals, see yours here…

STOCKS AND ALL

💼 Bytes Buy: Coronation Fund Managers has increased its stake in Bytes Technology Group PLC to 8.01% of voting rights, now holding over 19 million shares as of August 30 2024, signalling huge confidence.

🛒 Shoprite's Big Moves: Shoprite has agreed to sell its furniture business, including OK Furniture and House & Home, to Pepkor for an estimated R3.2 billion. This comes as Shoprite reports a 12% increase in group revenue to R246.1 billion, while focusing on its core grocery operations.

📉 Northam Nosedive: Northam Platinum shares plunged 9.28% on the JSE after reporting an 82% drop in full-year earnings. Despite raising production by 10.3% and extending its credit facility to R11.3 billion, the company struggles with low platinum prices, leading to weaker profits.

🎲 Sibanye Struggles: Sibanye-Stillwater reported a 100% decline in earnings for H1 2024, driven by low PGM prices and a R7.5 billion impairment at its US Stillwater mine. The company is assessing further restructuring as the future of Stillwater remains uncertain.

💸 Ether ETF Drive: It’s a slow burn as Ethereum ETFs saw just one day of positive inflows in the second half of August, with net outflows totalling $2.5 billion after Grayscale's ETF conversion. BlackRock’s Ether ETF remains the largest, holding over $1 billion in assets.

🔄 Scottish Mortgage Buyback Surge: Scottish Mortgage (SMT) has spent over £684.1 million on share buybacks in the first half of 2024, surpassing its five-year average as it pushes past the halfway mark of its £1 billion buyback program.

HIGGO’S TOP 11

Name	Growth YTD	Price
4Sight Holdings Ltd	46%	ZAC73.00
Advanced Micro Devices, Inc.	-6.23%	$136.94
Bitcoin (BTC / USD)	20.19%	$56,471.46
Brookfield Corp	23.09%	$47.92
Caxton and CTP Publishers and Printers	13.21%	ZAC1,200.00
Ether (ETH / USD)	1.84%	$2,376.19
Master Drilling Group Ltd	0.64%	ZAC1,258.00
MercadoLibre Inc	26.31%	$1,258.00
On Holding AG	63.37%	$46.07
Purple Group	0%*	ZAC 79
Santova Ltd	2.13%	ZAC766.00
Scottish Mortgage Investment Trust PLC	6.77%	GBX 814.00
PORTFOLIO YTD:	28.96%

*A R1000 Purple Group shares was added to the demo portfolio on 3/09/2024.

UPCOMING EARNINGS REPORTS

These companies are expected to deliver earnings reports in the next few weeks:

11 September 2024

• Pan African Resources

13 September 2024

• Sibanye-Stillwater

WEALTH HACKER’S KIT

How Inflation Affects You & Your Wealth

Rising prices at the checkout counter stretch your money to its limit. But understanding how to protect yourself from inflation can help you stay ahead in your wealth-building journey.

What is Inflation?

In simple terms, inflation is the increase in the cost of goods and services, which causes a loss of purchasing power. Imagine this: if R100 buys you a basket of groceries today, it might only buy half of that in a year due to inflation. That’s the rising price of groceries (inflation) eroding your money's value.

If your income or assets aren’t keeping pace with inflation, you’re effectively getting poorer.

Knowing Your Inflation

Let’s say Person X rides an e-bike to work and is a vegan, while Person Y drives a big bakkie and eats meat daily. If the price of fuel goes up 18% and meat by 15%, Person Y will feel the impact more than Person X, because they use those products.

Each person’s inflation rate will vary depending on their lifestyle and spending habits. So you can track your own personal inflation risk based on what you buy and use every month.

How Does Inflation Affect Your Wealth?

The key takeaway is this: if your savings or investments aren't growing faster than inflation, you’re losing wealth. For example, if your bank is giving you 5% interest while inflation sits at 7.5%, you're effectively losing 2.5% of your purchasing power. 

To truly grow wealth, you need to focus on building real returns – where your money grows by more than inflation.

How to Protect Yourself

The best way to guard against inflation is to invest in assets that keep up or outperform inflation. 

Real estate, for example, often rises with inflation, and rental prices can be adjusted accordingly, making property a solid hedge. But stocks and shares also work: Over time, shares in companies that increase their earnings tend to outperform inflation. 

Many ETFs are designed to track broad markets or specific sectors, spreading risk while providing solid, inflation-beating returns.

Look for investments that offer inflation-beating returns and grow your wealth in real terms.

THE PEOPLE HAVE SPOKEN

We asked what you see for the future of banking in Africa, and all eyes are on the likes of Capitec…

🟩🟩🟩🟩🟩🟩 🌍 Capitec continues its growth, setting the pace for innovation. (40%)

🟨⬜️⬜️⬜️⬜️⬜️ 🏛️ SA’s Big Four banks maintain their dominance in SA through stability. (10%)

🟨🟨🟨🟨⬜️⬜️ 🛠️ New players emerge on the continent, challenging the old guard in unexpected ways. (30%)

🟨🟨🟨⬜️⬜️⬜️ 📉 A mixed bag: growth in some areas, challenges in others. (20%)

What you said…

Great observation, Freddie! We also benefit from watching the likes of Tyme Bank on the rise, with a different approach and at a different growth stage. It’s exciting to watch. 💸 

That’s it for today. See you next week Wednesday!

Earlier this year, Capitec customer numbers surpassed both FNB and Standard Bank — after just 22 years in the market.

So we thought it a good time to look at how they do what they do, and what the risks and opportunities are when you become SA’s (and maybe even the continent’s) fastest-growing bank.

Here’s what you need to know…

Shining some light on 🔦 

• What’s behind Capitec’s phenomenal growth?

• Rate cut bets, AI chip wars & the Temu hiccup.

• Stock update: Higgo’s Top 10 stock picks for 2024

• Earnings calendar: Who’s reporting on revenue, when

• Understanding the opportunity cost of your money.

Notes from the Capitec Playbook: Data, Diversification, and Disruption in SA Banking

As Capitec shares surged by 75% this year, making it SA’s fastest-growing bank (perhaps even on the continent), CEO Gerrie Fourie attributes its success to a focus on fundamentals – particularly return on invested capital (ROIC) and client satisfaction – rather than on share price.

But it’s significantly broadened its revenue streams and solidified its market position in recent months. Here’s what you need to know…

Data is Their Competitive Edge

At the heart of Capitec's strategy is its unparalleled use of data. The bank has amassed nearly 2 trillion data points around consumer behaviour and needs, which it used to launch new products like Capitec Connect. 

And it’s the only bank in SA with all its data stored behind the cloud, allowing for real-time insights and swift decision-making, potentially keeping it at the forefront of both customer experience and market trends.

Diversification & Disruption Where it Matters

Building on its retail banking success, Capitec is now making strategic moves into the business banking and insurance sectors, targeting underserved SMEs with simple, low-fee banking.

Similarly, it’s expanding its insurance offerings, focusing on simplicity and accessibility. And with an audience of 23 million clients (rivalling the likes of Standard Bank) and vast data insights, Capitec is poised to make significant inroads and further diversify revenue streams.

But What Does this Mean for Investors?

While Capitec’s growth story is impressive, it comes with its own set of risks and opportunities. 

The bank's $18 billion valuation means it’s closing in on Standard Bank’s $21 billion, yet Capitec is often viewed as expensive, and potentially overvalued. And they do practice unsecured lending, with credit arrears around 8.7%, introducing higher risk compared to the more conservative, asset-backed lending practices of the Big Four banks. 

That said, you can’t discount Capitec’s aggressive expansion into underserved markets and its data-driven approach presents substantial growth opportunities. Whereas the Big Four banks – Standard Bank, Absa, Nedbank, and FNB – offer more stable, dividend-focused returns with lower growth prospects, investors in Capitec are betting on continued innovation and market disruption.

Note: This is not financial advice, merely observations. For personalised financial advice, you can book to speak to a financial advisor here (powered by a registered FSP: No. 51310).

STOCKS AND ALL

🇺🇸 Equities Attract Large Inflows on Rate Cut Bets: Investors poured $15.73 billion into global equity funds, spurred by expectations of a September Fed rate cut and strong U.S. economic data. U.S. equity funds led the way with $5.97 billion in inflows, while tech and consumer staples saw significant gains and bond funds also attracted positive inflows.

📊 Chip Wars: Nvidia, the AI chip titan, faces a critical earnings report today (28 Aug) amid delays in its new Blackwell chips. While Nvidia’s stock has skyrocketed 170% this year, rival AMD sees an opportunity to gain ground with its MI300X chip, which has already hit $1 billion in sales. Analysts are closely watching Nvidia’s report, which could push its market cap toward $6 trillion, but AMD’s momentum could make this a pivotal moment in the ongoing battle for AI chip supremacy.

📈 Bitcoin Bulls Target $68,000: BTC/USD has continued its momentum, with analysts now eyeing a potential breakout to $68,000, fueled by bullish technical patterns and supportive ETF inflows. However, as noted last week, Bitcoin faces a crucial resistance level of around $62,500 – if it can sustain above this, we might see a surge toward $68,000 or beyond. But geopolitical risks and key support at $60,000 could influence its short-term trajectory.

🇨🇳 PDD Growing Challenges: PDD Holdings (Temu’s parent company)’s stock recently plunged nearly 30%, wiping out over $50 billion in market value after disappointing Q2 results due to competition and regulatory hurdles. Despite this, Wall Street remains bullish on its long-term prospects, saying things might look tough but it could just be a buying opportunity.

💰 $10M Mali Gold Raise: Toubani Resources has secured $10 million to push its Kobada gold project in Mali to the definitive feasibility study stage. The funding, backed by key investors, will support drilling, permitting, and environmental work as the company aims to make Kobada one of West Africa’s leading gold projects.

HIGGO’S TOP 10

Name	Growth YTD	Price
4Sight Holdings Ltd	50%	ZAC705.00
Advanced Micro Devices, Inc.	2.96%	$150.50
Bitcoin (BTC / USD)	26.03%	$59,218.00
Brookfield Corp	27.92%	$49.80
Caxton and CTP Publishers and Printers	-2.36%	ZAC1,035.00
Ether (ETH / USD)	5.66%	$2,462.89
Master Drilling Group Ltd	-6.00%	ZAC1,175.00
MercadoLibre Inc	29.23%	$2,036.21
On Holding AG	69.93%	$47.92
Santova Ltd	4.00%	ZAC780.00
Scottish Mortgage Investment Trust PLC	8.37%	GBX 826.20
PORTFOLIO YTD:	19.48%

UPCOMING EARNINGS REPORTS

These companies are expected to deliver earnings reports in the next few weeks:

28 August 2024

• Bid Corp

• CrowdStrike

• Nvidia

29 August 2024

• Impala Platinum

30 August 2024

• Northam Platinum Holdings Ltd

3 September 2024

• Shoprite Holdings Ltd

WEALTH HACKER’S KIT

Opportunity Costs of Money: Spend Smart, Invest More

Are you thinking about how to better control your finances? Understanding the opportunity cost of money can help you think twice before spending and get you closer to financial independence.

What is Opportunity Cost?

Opportunity cost is the money you could have earned if you had invested instead of spent. Just like investments compound, so do opportunity costs. 

When you avoid unnecessary spending and invest that money, you let it work for you. The more you invest, the less you lose in opportunity costs.

Real-Life Examples

Consider this: You spent R50,000 on a holiday, but an investment with a 20% return would have earned you R10,000. Next year, that missed opportunity grows to R12,000. Or, imagine buying a car for R450,000. Over five years, the car’s value drops to R270,000, while investing those monthly payments at 10% growth could have netted you R743,428.42. That’s a big difference.

How to Calculate Opportunity Cost

Use your favourite investment, like the Satrix MSCI World Equity Index Feeder Fund, with a return of 13%. If you spent R10,000, you’re missing out on R1,300 in earnings every year. Over 10 years, that could grow to R33,945. 

Or, look at your home loan: Invest R10,000 into your bond and save R57,884 in interest.

The Message: Think Twice Before You Spend

Next time you’re about to splurge, ask yourself: What’s the opportunity cost? Your goal should be to convert as much of your income into investments as possible, getting you closer to financial freedom.

If you need help calculating the optimal spending and investment levels for your personal profile, you can get yourself pro personal advice right now…

THE PEOPLE HAVE SPOKEN

We asked where you see the crypto market heading, and it’s up and up…

🟩🟩🟩🟩🟩🟩 🚀 Bitcoin rockets past $62,500 and keeps climbing! (40%)

🟨🟨🟨🟨⬜️⬜️ 🛑 Bitcoin hits $62,500 and takes a break. (34%)

🟨⬜️⬜️⬜️⬜️⬜️ 💪 Ethereum steadies itself, preparing for a comeback. (13%)

🟨⬜️⬜️⬜️⬜️⬜️ 🌀 The market takes a sharp turn – anything could happen! (13%)

What you said…

Indeed, Jan, there’s too much riding on it to be flaky. 💪

Agreed, Asethemane, for now, it’s probably HODL and ride the wave. 🪂

More exciting product updates are coming your way next week Wednesday — don’t miss it!

With the Rand hitting its best level in a year and gold at historic highs, there was some positive sentiment in the markets early this week, despite some poor business performances – including Sasol.

But we’re eyeing crypto pretty closely as BTC rallies and Ethereum holds steady, largely due to in- and outflows in their ETFs.

Here’s what you need to know…

Shining some light on 🔦 

• ETF flows and impacts on BTC & ETH prices.

• $1M gold bars, Sasol’s tough year & Coronation’s special dividend.

• Stock update: Higgo’s Top 10 stock picks for 2024

• Earnings calendar: Who’s reporting on revenue, when

• Your independence formula: How to escape the rat race.

THE SPOTLIGHT

Market Pulse: ETF Flows Shaping BTC & ETH Movements 

Bitcoin’s price has surged by 6% recently, breaking past the $61’000 mark after a brief slump a few weeks back saw investors rushing in to buy in below the $60k level. And the momentum has continued, sparking anticipation that it could continue in the coming weeks.

Here’s what you need to know about recent movements in the crypto space…

Bitcoin Rallies (But With A Crucial Ceiling)

The thing to watch with BTC is what happens when the price reaches its resistance level of $62’500, a crucial ceiling that analysts say it will either break through and surge close to or past its record high of $73k or, if it fails to break through, could see it stabilise or even recede.

For now, the momentum is very bullish as strong ETF inflows buoy BTC – BlackRock’s IBIT ETF (of which Goldman Sachs holds a fair share), for example, recently attracted $92.7 million in inflows, marking the largest since early August. And it certainly looks like the ETF demand is outpacing the post-halving new Bitcoin supply, giving it a very bullish medium-to-long-term outlook.

The same can’t be said for Ethereum right now though…

Ethereum Holding Steady

In contrast, Ethereum has been facing more challenges. While its price has shown some stability, trading around $2,600 for a while, its ETFs are experiencing continuing net outflows, with recent data showing a $13.5 million outflow. 

Grayscale’s ETHE ETF has been the hardest hit, with total outflows now reaching $2.4 billion.  It’s made investors more cautious about Ethereum's short-term prospects, and unless we see a reversal in ETF outflows, the price could struggle to make significant gains.

Beyond the Short Term

All that said, we shouldn’t discount that even BTC remains vulnerable to changing market sentiment – any negative news, regulatory actions, or broader market sell-offs could impact its rally.

Similarly, Ethereum tends to follow Bitcoin’s price movements, but with a bit of a delay, so we might see surges in the future, especially if BTC breaks $62k. ETH also tends to rally when they have major network upgrades or developments, and it looks like the Pectra upgrade could come in early 2025.

Note: This is not financial advice; it is merely observations. For personalised financial advice, you can book to speak to a financial advisor here (powered by a registered FSP: No. 51310).

STOCKS AND ALL

💰 Gold Bars Hit $1 Million Milestone: For the first time in history, a standard 12.5-kilogram gold bar is now worth over $1 million, driven by gold's spot price reaching an all-time high of $2,500 per troy ounce, indicating strong demand.

💼 Master Drilling Earnings Pressure: Master Drilling Group announced that its headline earnings per share (HEPS) for the first half of 2024 are expected to range from a 1.9% decrease to an 18.1% increase compared to last year. But the company’s EPS could see a significant drop of up to 96.5%, due to impairment losses on equipment and uncertainties in commodity prices, when it publishes results on 27 August.

💸 Coronation Special Dividend: Coronation Fund Managers announced a special dividend of 153 cents per share following a victory against SARS, saving them R794 million. At the same time, the asset manager reduced its stake in Meta Platforms by 5.4% during Q2, reflecting a strategic shift in its portfolio amidst this financial windfall.

📉 Sasol’s Tough Year: Sasol reported a massive R44 billion loss for FY24, with a 66% plunge in headline earnings per share, largely due to a R75 billion impairment amid weak chemical prices. The petrochemical giant is now reviewing its underperforming assets, with potential sales or closures on the table as it seeks to stabilise its operations.

💼 Brookfield’s Share Buyback Plan: Brookfield Corporation has renewed its share buyback program (repurchase up to 10% of its outstanding Class A Preference Shares), signalling confidence in its market value and ability to enhance shareholder returns by acquiring undervalued shares.

HIGGO’S TOP 10

Name	Growth YTD	Price
4Sight Holdings Ltd	40%	ZAC 70.00
Advanced Micro Devices, Inc.	6.99%	$156.40
Bitcoin (BTC / USD)	26.39%	$59,384.70
Brookfield Corp	19.93%	$46.69
Caxton and CTP Publishers and Printers	-2.83%	ZAC 1,030.00
Ether (ETH / USD)	11.15%	$3,593.23
Master Drilling Group Ltd	-10.72%	ZAC 1,116.00
MercadoLibre Inc	27.29%	$2,005.66
On Holding AG	47.98%	$41.73
Santova Ltd	3.33%	ZAC 775.00
Scottish Mortgage Investment Trust PLC	13.20%	GBX 863.00
PORTFOLIO YTD:	15.84%

UPCOMING EARNINGS REPORTS

These companies are expected to deliver earnings reports in the next few weeks:

21 August 2024

• Curro Holdings Ltd 

• Snowflake 

27 August 2024

• Master Drilling Group Ltd

28 August 2024

• Bid Corp

• CrowdStrike

• Nvidia

29 August 2024

• Impala Platinum

WEALTH HACKER’S KIT

A Plan to Escape the Rat Race

Feeling trapped in a never-ending cycle of work and expenses? 

You’re not alone. The key to gaining independence is understanding and working toward your Financial Independence (FI) number. 

Here's how you can calculate it and start moving toward financial freedom…

What is Financial Independence? 

Financial independence means having enough income-generating assets to cover your living expenses without relying on a traditional 9-to-5 job. 

This could come from dividends, rental income, or a business. Once you’re financially independent, you can pursue your passions and hobbies, or simply enjoy life on your terms.

How to Achieve Financial Independence 

Start by calculating your FI number using the 4% rule. This rule suggests you can withdraw 4% of your investments each year, adjusted for inflation, without depleting your savings for at least 30 years.

Calculating Your FI Number

1. Know your annual expenses: Calculate your yearly expenses. For example, if you spend R20,000 per month, that’s R240,000 annually.

2. Apply the 4% rule: Multiply your annual expenses by 25. In this case, R240,000 x 25 = R6 million. This is your fully funded FI number.

3. Reduce with passive income: If you have passive income sources like rental properties or a side business, subtract these from your expenses. If you earn R9,000 monthly from these sources, you’ll only need R11,000 from your investment portfolio. Using the 4% rule reduces your FI number to R3.3 million — a significant decrease from R6 million.

Now, you can work on building additional income streams to gradually get closer to your FI number, reduce your dependence on a traditional job, and steer you toward financial independence.

THE PEOPLE HAVE SPOKEN

We asked which area of retail and apparel you think will grow in the next 5 years, and D2C’s the one to look out for…

🟨⬜️⬜️⬜️⬜️⬜️ 👟 Athletic Footwear & Apparel (14%)

🟩🟩🟩🟩🟩🟩 🛒 Direct-to-Consumer (D2C) Brands (58%)

🟨⬜️⬜️⬜️⬜️⬜️ 🌱 Sustainable Fashion (14%)

🟨⬜️⬜️⬜️⬜️⬜️ 📦 E-commerce Giants (14%)

See you next week Wednesday.

The mid-year earnings season is drawing to a close, but there have been some exciting recent reports. Not least of which is international premium sports- and footwear manufacturer, On Holdings (ONON).

We look at how it attained such impressive growth, possible risks and challenges to gauge a long-term outlook for the stock.

Shining some light on 🔦 

• On Holding’s foot forward in revenue & profits

• Sasol’s R55bn hit, Standard Bank optimism & AI chip slides

• Stock update: Higgo’s Top 10 stock picks for 2024

• Earnings calendar: Who’s reporting on revenue, when

• How to build (and live off) a dividend portfolio

A Foot Forward in Innovation

Footwear and sports apparel maker On Holding has shown impressive growth in its recent Q2 earnings report, highlighting a 28% increase in net sales and a substantial rise in profitability. 

It’s attracted consistent "buy" ratings from multiple analysts, including Goldman Sachs and UBS, with Stifel Nicolaus boosting its price objective to $45.00, indicating a potential upside of 11.86%.

Innovative Technology and Brand Momentum

The company has shown its dedication to innovation – developing a new manufacturing technique called light spray where the upper part of a shoe is sprayed, rather than built, using robotics; a practice already used very successfully in its premium performance marathon shoes.

And the brand has strong momentum, supported by strategic partnerships with global talents and high-profile marketing efforts. On has significantly boosted its direct-to-consumer (D2C) sales, which now account for a substantial portion of its revenue.

Risks and Challenges

Despite its strong financial performance, On Holding’s biggest likely risk is its supply chain – it’s seen warehouse capacity constraints in North America that led to inventory shortages and impacting deliveries. 

Additionally, the company has a high P/E ratio and will need to rely on maintaining exceptionally high growth to justify its valuation. This could pose challenges if market conditions change.

Long-term Outlook

On Holding AG’s financial health is supported by a strong liquidity position, with more cash than debt on its balance sheet, which is crucial for sustaining its growth and innovation strategies. 

The company has set itself high targets – 30% net sales growth for next year and a gross profit margin of 60%. But the thing to be mindful of risk-wise here is not what On itself does, but external factors, such as economic downturns or increased competition.

Note: This is not financial advice; it is merely observations. For personalised financial advice, you can book to speak to a financial advisor here (powered by a registered FSP: No. 51310).

STOCKS AND ALL

💥 Sasol’s $3 Billion Hit: Sasol faces R55.1 billion ($3 billion) in impairments, mainly from its US operations, leading to an expected net loss of R55.8 billion. With shares down 6%, investors are keenly awaiting tomorrow’s earnings report for updates on the company’s strategy.

💼 Standard Bank's Potential: With earnings per share (EPS) growth of 51% annually over the past three years and a 20% revenue increase to R161 billion, Standard Bank is catching investors' eyes. Insider confidence is strong too, with recent purchases totalling R51 million, including a R20 million buy by CEO Simpiwe Tshabalala.

🔻 AMD & Nvidia Slide: Digital infrastructure stocks like Nvidia and AMD have dropped, with returns now at 8% YTD, trailing the S&P 500. AI demand remains high, but economic concerns and Nvidia’s GPU delays are fueling the selloff. Note: tech is sure to win in the long run, but we have to admit that valuations in this space have been a bit high due to the AI “craze”.

📉 Scottish Mortgage: Buy the Dip?: Scottish Mortgage shares have dropped 8%, now trading at an 8.5% discount to NAV. With a focus on AI giants like Nvidia, Amazon, and Tesla, this dip could be a buying opportunity for long-term investors.

🚀 Liberty Media's F1 Surge: Liberty Media reported Q2 2024 F1 revenue of $871 million, up from $724 million in 2023, driven by two extra races and increased F1 TV subscriptions. Team payments also rose to $435 million as F1 continues to see strong global growth and fan engagement.

HIGGO’S TOP 10

Name	Growth YTD	Price
4Sight Holdings Ltd	46%	ZAC73.00
Advanced Micro Devices, Inc.	-3.45%	$141.13
Bitcoin (BTC / USD)	29.29%	$60,748.20
Brookfield Corp	16.95%	$45.53
Caxton and CTP Publishers and Printers	-3.77%	ZAC1,020.00
Ether (ETH / USD)	17.17%	$2,733.76
Master Drilling Group Ltd	-11.20%	ZAC1,110.00
MercadoLibre Inc	21.62%	$1,916.20
On Holding AG	46.35%	$41.27
Santova Ltd	2.67%	ZAC770.00
Scottish Mortgage Investment Trust PLC	9.18%	GBX 832.00
PORTFOLIO YTD:	16.41%

UPCOMING EARNINGS REPORTS

These companies are expected to deliver earnings reports in the next few weeks:

15 August 2024

• Standard Bank

20 August 2024

• Sasol 

21 August 2024

• Curro Holdings Ltd 

• Snowflake

WEALTH HACKER’S KIT

How to Live Off a Dividend Portfolio

Thinking long-term and retirement?

Living off a dividend portfolio is an effective strategy for generating income during retirement or supplementing your current income. By investing in dividend-paying stocks, you can create a steady income stream without selling your shares. Here's a step-by-step guide on how to achieve this, complete with calculations.

Step 1: Determine Your Income Needs

Start by calculating your monthly expenses and subtracting any other income sources, such as pensions or interest. This will give you a clear idea of how much income you need to generate from your dividend portfolio.

Example:
If your monthly expenses are R25,000 and you receive R5,000 from a pension, you'll need R20,000 per month from your dividends. Multiply this by 12 to get your required annual income: R240,000.

Step 2: Build a Diversified Dividend Portfolio

Diversification is key to reducing risk and ensuring a consistent income. Invest in a mix of stocks from various sectors.

Example Portfolio:

• 30% Mining: BHP Billiton, Sibanye Stillwater, Exxaro

• 22.5% Real Estate: Vukile, Stor-Age

• 20% Retail: Shoprite, Woolworths

• 15% Telecom: MTN, Vodacom

• 12.5% ETFs: Satrix DivI Plus, Satrix Resi

Step 3: Calculate Your Expected Dividend Income

Determine your expected dividend income by multiplying the dividend yield of each stock by the number of shares you own.

Example:
With R4 million invested across these stocks at current yields, you could earn R301,600 annually before tax. Dividends in your Tax-Free Savings Account (TFSA) won’t be taxed, but the rest will be taxed at 20%. Remember, the maximum you can invest in a TFSA is R500,000.

Step 4: Monitor & Update as Needed

Regularly check your portfolio to ensure your stocks are performing well and continuing to pay dividends. If a stock's performance declines or its dividends are cut, consider selling it and replacing it with a better-performing stock.

THE PEOPLE HAVE SPOKEN

How panicked are you about what’s happening on the local and global financial stage?

🟨⬜️⬜️⬜️⬜️⬜️ 😰 Very much – I’m afraid of losing what I’ve built so far. (12%)

🟩🟩🟩🟩🟩🟩 😎 No, it’s OK, I know the ups and downs will settle soon. (61%)

⬜️⬜️⬜️⬜️⬜️⬜️ 🌎 I am worried about how global events affect my ability to earn and grow (6%)

🟨⬜️⬜️⬜️⬜️⬜️ 🇿🇦 I'm not too concerned with the rest of the world, I just want SA’s economy to get going. (12%)

🟨⬜️⬜️⬜️⬜️⬜️ 😉 To be honest, I didn’t notice the global panics – I’m in this for the long-term gains. (9%)

What you said…

Exactly, Asethemane, that’s the spirit.

Indeed, Esaluya, it stabilised so quickly that a bit of free cash could have had you up right now.

Nice one, Jan, glad you could benefit from the frenzy – a good example of why you need to have a little cash cushion around.

Indeed, Holman, Jan said he had some opportunity to capitalise – everyone else wishes they had more to buy with too.

Eek, it’s been a scary week! With global stock markets plummeting on Monday amid fears of a US recession, then a brief uptick on Tuesday, you’re likely asking: what’s going on?

Don’t worry we’re here to help you understand what’s happening and keep you building wealth smartly…

Shining some light on 🔦 

• Global market shocks – what’s happening?

• Pick n Pay’s big win, Temu’s protests & Tesla’s new direction

• Stock update: Higgo’s Top 10 stock picks for 2024

• Earnings calendar: Who’s reporting on revenue, when

• What is free cash flow and why does it matter to investors?

What on Earth is Happening in the Markets?

This week has been turbulent for global stock markets. On Monday, major indices in the US, London, Japan and the Middle East – basically all over the world, including bitcoin – dropped sharply due to fears of a looming US recession.

And local markets weren’t immune. The JSE continued a drop from Friday last week and the Rand fell sharply too. 

Although there was a brief recovery in some markets on Tuesday, the situation remains fluid as we move through the week.

Here’s what you need to know…

Why It's Happening

The primary reason for all this market turmoil is the fear of a US recession. That’s because, historically, a recession in the US often sends ripples through global markets, given its significant influence on the world economy. 

Because the US has seen very high interest rates recently, you have a slowdown in economic growth that leads to less consumer and business spending. This creates a feedback loop that sparks recession fears, and those initial worries often cause sell-offs and can make people and businesses even less likely to spend.

This can cause widespread panic, leading to slumps and sell-offs in the rest of the world – like we saw this last week.

How Countries and Marketplaces Will Respond

The good news is, no one is going to take this lying down.

The US Federal Reserve was looking at cutting interest rates later this year or early next year anyway, so chances are they are going to move that up and slash rates sooner. A move that makes borrowing cheaper and encourages spending, which will have a positive effect on markets again.

It's also important to note that everyone, from companies to fund managers and entire countries, is actively taking steps to protect their investments and stabilise the economy, so this is not a time to get panicky. 

For instance, Warren Buffet's Berkshire Hathaway prepared for exactly this kind of scenario by selling off stocks and building up their free cash flow to $277 billion. (Check out our Wealth Hackers section a bit lower down for an explanation of how this works!).

And you can bet that the major players, from fund managers and companies, are going to be employing tactics to mitigate risks and safeguard investments.

The Long View

While market downturns can be unsettling, it’s crucial to remember that wealth-building is a long-term journey. 

Those who’ve been with us for a while will know, you’re going to see all kinds of ups and downs along the way. The key to building great future wealth is sticking to a well-thought-out plan.

To help you navigate these uncertain times and build wealth smartly, FinMeUp has developed a suite of new tools. These include a financial goal-setting tool, finding your Finimal, and access to financial advisors ready to assist you.

Note: This is not financial advice; it is merely observations. For personalised financial advice, you can book to speak to a financial advisor here (powered by a registered FSP: No. 51310).

HAVE YOUR SAY

STOCKS AND ALL

💸 Huge Win for Pick n Pay: The Pick n Pay Group overshot its rights offer by more than double, raising over R8 billion against a target of R4 billion. This 106% oversubscription underscores strong investor confidence in Pick n Pay's turnaround strategy and growth plans.

🍺 ABInBev's Recovery: Anheuser-Busch InBev reported mixed earnings as it recovers from the Bud Light boycott. It posted revenue of $15.33 billion, slightly below expectations, but saw a 10.2% growth in EBITDA, surpassing forecasts. Despite a decline in US and China sales, global momentum remains strong, driven by consumer demand for its megabrands.

💎 Crypto ETF March: Blackrock's new Ethereum ETF has outpaced Bitcoin ETF inflows, attracting net inflows of $106 million in its first day. At the same time, Morgan Stanley made public plans to offer Bitcoin ETFs to its wealth clients, marking a significant step in the mainstream acceptance of cryptocurrencies.

🌐 Temu's Home Battles: In China, hundreds of merchants have joined protests against Temu because the platform's complex company structure outside of China is making it hard for them to sell effectively cross-border e-commerce, as they vie for clearer, more equitable operational frameworks.

🚗 Tesla's Investor Warning: During Tesla's second-quarter earnings call, Elon Musk advised investors to sell their shares if they don't believe in the company's ability to achieve its AI and autonomous driving goals. Blunt as it seems, Musk's comments reflect Tesla's ambitious transition from an EV manufacturer to a full-blown AI enterprise.

HIGGO’S TOP 10

Name	Growth YTD	Price
4Sight Holdings Ltd	50%	ZAC75.00
Advanced Micro Devices, Inc.	-10.95%	$130.18
Bitcoin (BTC / USD)	21.41%	$57,048.20
Brookfield Corp	14.74%	$44.67
Caxton and CTP Publishers and Printers	-5.19%	ZAC1,005.00
Ether (ETH / USD)	7.62%	$2,510.87
Master Drilling Group Ltd	-7.12%	ZAC1,161.00
MercadoLibre Inc	14.90%	$1,810.39
On Holding AG	34.15%	$37.83
Santova Ltd	7.87%	ZAC 809.00
Scottish Mortgage Investment Trust PLC	5.72%	GBX 806.00
PORTFOLIO YTD:	14.10%

UPCOMING EARNINGS REPORTS

These companies are expected to deliver earnings reports in the next few weeks:

Finding your Finimal

We told you we are building exciting new tools, and one of them is your Finimal…

Your Finimal is linked to your risk profile and is an important guide that helps determine a proper investment asset allocation for your portfolio. 

Your risk profile can change based on your willingness and ability to take risks. For example: You decide to take action on your goal to buy a house or start a family.

Now we are launching Finimals in the next few days, and we’re going to update the button below to take you to where you can find your Finimal…

WEALTH HACKER’S KIT

What is Free Cash Flow?

Since we highlighted Warren Buffet’s move to sell off stocks (which we highlighted a few weeks back) and build up cash reserves, as per today’s main article above, we thought it’s a great time to unpack the practice of free cash flow – and why it matters to you as an investor.

Free cash flow (FCF) is the money a company has left after paying for its regular operations and buying new assets like buildings or equipment. Think of it as the leftover cash that can be used for growth, paying off debts, or rewarding shareholders.

Why is Free Cash Flow Important?

Free cash flow is a key metric for investors because it shows how much actual cash a company generates, which is harder to manipulate than reported profits. For example, a company might show a paper profit but actually lose cash in reality. By looking at FCF, you get a clearer picture of a company's financial health.

How to Calculate Free Cash Flow

To calculate FCF, you subtract capital expenditures (money spent on assets) from operating cash flow (money earned from regular business activities). Here's a simple formula:

FCF = Operating Cash Flow – Capital Expenditures

Uses of Free Cash Flow

Companies can use their free cash flow in several ways:

1. Dividends: Paying cash dividends to shareholders.

2. Share Buybacks: Buying back shares to increase the value of remaining shares.

3. Paying Off Debt: Reducing debt to lower interest expenses and improve financial stability.

4. Reinvesting: Putting money back into the company to fuel growth.

5. Acquisitions: Buying other companies to expand and gain market share.

Why It Matters

Understanding free cash flow helps you see if a company can sustain and grow its business. For instance, Warren Buffett’s Berkshire Hathaway focuses on building up cash reserves, a strategy that relies heavily on understanding and utilising FCF effectively.

THE PEOPLE HAVE SPOKEN

We asked what will most influence SA retail stock performance, and it’s unanimous for economic recovery…

🟩🟩🟩🟩🟩🟩 📊 Economic recovery (100%)

⬜️⬜️⬜️⬜️⬜️⬜️ 🚀 Strategic expansions (0)

⬜️⬜️⬜️⬜️⬜️⬜️ 👔 Leadership and management performance (0)

⬜️⬜️⬜️⬜️⬜️⬜️ ⚔️ Market competition (0)

⬜️⬜️⬜️⬜️⬜️⬜️ 💪 Consumer confidence (0)

Wow, we’ve never had a unanimous poll before, which just goes to show how sorely we’re all impacted by negative narratives and what we see happening in marketplaces.

And it’s exactly in times like these that you need to reinforce your long-term strategy.

So we are glad to tell you we’ve built some awesome tools to help you regroup and refocus on building amazing future success…

THE UPDATE

Over the next couple of weeks, we will make features live allowing you to actively invest towards your goal(s). From travelling the world, building an emergency fund or buying your first property.

Track your goals as you achieve them.