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The JSE has hit EOH with a R7.5 million fine, for releasing results which had errors in them. According to the JSE, results statements from the technology group for 2017 and 2018 had understated losses. R2.5 million of the fine has been conditionally suspended for five years, partly due to EOH’s full co-operation during the investigation. Megan Pydigadu, Group CFO of EOH joins CNBC Africa for more.

JSE slaps EOH with R7.5mn fine

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Green bonds, social bonds and sustainability bonds all to help with the Sustainable Development Goal commitments. The Johannesburg Stock Exchange announced this week that the Green Bond Segment will expand to a fully-fledged Sustainability Segment. The aim – provide a platform for companies to raise debt for green, social and sustainable initiatives. What does this mean? Valdene Reddy, Director of Capital Markets at the JSE joins CNBC Africa for more.

JSE launches new sustainability segment

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Property group, Grit Real Estate has reported its plans to delist from the Johannesburg Stock Exchange at the end of July, but will keep its listings on the London and Mauritian stock exchange. Joining CNBC Africa for more on its South African listing is Bronwyn Corbett, Co-founder and CEO of Grit Real Estate Group.

Grit Real Estate CEO on company delisting from the JSE

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With several JSE listed companies from Comair to Phumelela going into business rescue, Africa’s largest bourse has announced relief measures to businesses that are affected by the pandemic and in financial distress. Valdene Reddy, Director of Capital Markets at the JSE joins CNBC Africa for more.

JSE unveils relief measures for business in distress

By Peter Armitage, Anchor Capital CEO/Liam Hechter, Anchor Fund Management



Recent weeks have been dominated by investors asking us where the best investment opportunities are in the aftermath of the global market collapse. Below, we review the asset classes across major geographies, with a focus on equities.



Introduction



There are a few principles which we apply and assumptions that we make in our assessment of global and local assets. First, we assume that the world will revert to normality, although we have no idea when this will happen. At Berkshire Hathaway’s annual general meeting on Saturday (2 May), billionaire investor and Berkshire CEO Warren Buffett referred to the current period of volatility as “an interruption of growth”. The world will revert to growth. However, we are actively avoiding those assets where a longer-than-expected reversion to normality can materially and permanently damage the business. We are also avoiding areas of high risk – there is no need to assume a big risk when investment opportunities abound. There is also great merit in being patient – if you have money to invest you have time on your hands. We are not getting overly anxious when markets decline – this presents opportunities but be prepared to act. We are not getting FOMO when markets rise, and we are not fully invested – volatility will prevail for some time to come. So, also be prepared to sit on your hands, when necessary.



From a global perspective, first we highlight that low-risk assets generate no, or even a negative, return. Global developed market (DM) bond rates are basically at zero to negative and cash in the bank erodes in nominal terms. If you do not allocate some cash to riskier assets (such as property and equities), your wealth will erode in real terms. This scenario will prevail for a long time to come and interest rates simply cannot rise.



So, when and how do you invest in equities and property globally?



The first point to make is that the change in environment has impacted sectors and companies very differently – this is not a time for index investment. Oil, cars, pigs and sugar (for example) are in a big surplus so, while some companies have seen their turnover head to zero, the environment has been very positive for others. Amazon’s 1Q20 revenue, for example, was up a remarkable 26% YoY.



Nevertheless, some caution is warranted in global equity investment. There will be a lot of money to be made in these conditions, but timing is important. March 2020 was one of the worst months ever on global markets, but April saw a big bounce back – the best in the past 33 years. The bottom line is that, YTD, the MSCI World Index is down by 12% up to the end of April (with the S&amp;P 500 index down only 9% YTD), which many would consider a far better-than-expected outcome, after the height of the novel coronavirus (CV-19) fears a month or two ago. We believe global equity markets started the year in fully valued territory and, at an index level, with prospects now far worse, markets as a whole are certainly not in value territory. Earnings in 2020 will be under immense pressure and 2021 looks uncertain. Great businesses will rebound to normality in 2021, but some of this is already factored into share prices.



Everyone we speak to both in South Africa (SA) and in the UK have been caught off guard, with the overwhelming majority of those people expecting equities to go lower from here. We note the following:



<ul><li>“no one” is buying the bear market rally.</li><li>US Federal Reserve (Fed) Chair Jerome Powell is pouring cold water on the hopes of a V-shaped recovery by stating that there is “… considerable risks to the economic outlook over the medium term.”</li><li>30mn people in the US are now “unemployed”.</li></ul>



So, how do we play global equity markets?



<ul><li>Do not sell your long-term growth companies.</li><li>In our funds we remain focussed on buying great companies at good prices and these opportunities are presenting themselves. We are excited by these opportunities and we await further pullbacks to increase our exposure.</li><li>Certain sectors of the market will benefit from the events of the past two months and their long-term drivers and trends will be strengthened.</li><li>Among our top holdings are: The Walt Disney Company, Yum! Brands, Nike, Prudential, Unilever, Admiral Group, ICICI Bank, GlaxoSmithKline, Amazon, Ping An Insurance, Johnson &amp; Johnson, PayPal, Royal Dutch Shell and Alphabet.</li></ul>



A recovery portfolio



There are numerous share-specific opportunities which present themselves with the prospects of their share prices rising by 25%-50% in the next 12-18 months. Anchor has been running a “Recovery Portfolio”, which adds to, instead of replacing, a core long-term growth portfolio. The recovery portfolio is dominated by high-quality companies with great track records whose share prices have been hammered. Among these are: JP Morgan, Hasbro, Starbucks, McDonald’s, Paychex, Stryker, Sysco, Leggett &amp; Platt and Ulta Beauty.



So, in global equity markets, there are some great individual opportunities, but our base-case view is that better opportunities might still present themselves and we want to make sure we have cash available to take advantage of these.



Property



Global property is an interesting equation. Many tenants are not paying rent (especially in retail) and people are questioning whether the same amount of office space will be required after the lockdown experience. Global listed property shares have acted similarly to global equities and are down around 20%. The issue with property companies is that, generally, high levels of gearing mean that prolonged periods of reduced turnover can have a significant negative impact on net asset value (NAV) per share. Diversified listed property companies might well be a good way to play a recovery, but it should be restricted to quality plays.



Anchor has significant intellectual capital in the property space, and we are very excited about property over the next few years, especially given what is happening to capital prices. In the physical property space, there is blood on the streets, and it will get worse. Yet property has a powerful role to play in a diversified portfolio – strong, predictable, compounding and growing cash flows are available with the right tenant and leases. While listed shares might be a good way to play the recovery, we believe the direct market will be particularly attractive. The Anchor Tenant team is identifying such opportunities and will present global and local opportunities to investors over the coming months.



Moving to the local market …



SA is in a very different space to developed markets (DMs) where investors can earn a very attractive real return by investing in income and bond products. This means one can be even more patient with equity investment.



The SA market, as measured by the Capped Swix Index, bounced back by 14% in April and for the year to end April the index is down 16%. The direction in SA markets is likely to follow global markets and the rand is expected to weaken if global markets weaken and vice versa. When the world is more comfortable that normality will return in a reasonable timeframe, emerging markets (EMs) are likely to outperform DMs and the rand has the potential to recover materially. It is important to look below the index level and understand the non-SA Inc. shares that have recovered, as opposed to the SA shares. This is not surprising, as the price of many of these shares is set internationally and they have been dragged higher by their international strings.



The SA economy is only one part of the equation



It is vital to remember that, when we talk about the SA market, there is a portion that is sensitive to SA economics and a portion that is not impacted (consider Naspers, British American Tobacco [BTI], Richemont, BHP Billiton, Quilter etc.). In our equity fund, only 26% of our holdings are sensitive to the SA recovery and, despite SA’s poor short-term outlook, we have retained these because they are trading at once-in-a-decade valuations. SA banks and insurance companies are strong, and it appears that more than the worst case is already factored into many of these companies’ share prices.



MTN is an example of a share which we believe has more than 50% upside potential. Mobile telecommunications has been strong sector internationally this year and Vodacom is up for the year. MTN has fallen sharply, largely because of its Nigerian exposure (27% of profits). This contribution will fall, but we still expect it to be positive, and Nigeria is now being valued at zero in the MTN share price



April’s winners



The past month on the JSE was characterised by extreme volatility in those sectors with the highest degrees of operational risk brought on by CV-19 (read SA cyclicals), which, through their volatility continued to disappoint. The winners were more of the same from those sectors that have provided much of the performance contribution of the index over the past 18 months:



<ul><li>Naspers/Prosus (a 2% contribution to the index);</li><li>PGM (2.2%);</li><li>Gold (2%); and</li><li>British American Tobacco (1%).</li></ul>



While we focus on long-term investment in our philosophy, the current volatility and pricing of shares is presenting us with shorter-term opportunities.



In SA equity, our actions have been to increase the defensiveness of the portfolio. This is done by reducing our exposure to those companies with weak balance sheets, which are not yet fully reflected in the share price, and those businesses which face immediate threats to their existence and, where we can, by increasing our exposure to those leading franchises that should emerge from this crisis in a better shape – or at least where we are confident that they will emerge. An interesting observation globally in the March sell-off and the subsequent April rebound was that value tended to underperform growth. As part of our strategy, we think this multi-year growth trend of outperforming value is likely to persist, although we do not manage factors that simplistically at a portfolio level. In the last few sessions in April, we started to see some buying coming in for those names that had been severely sold off over the past six weeks, the more cyclical sectors, with growth underperforming.



Anchor’s buys and sells in April



In the Anchor BCI Equity Fund we were net sellers of The Foschini Group, Nedbank, Bidvest, Home Depot and Discovery. We were net buyers of Growthpoint, FirstRand, Old Mutual, Quilter Plc and Sibanye Stillwater.



The underperformance of the SA economy has resulted in a continued narrowing of the local investible universe, with the index becoming increasingly concentrated to a small number of large caps, mostly exporter/rand-hedge type stocks. In the short term, it is unlikely that this trend will break. However, it is likely that, over the medium term, the underperformance of domestic companies will reach an inflection point and they will return to growth once more – its human nature to extrapolate a negative trend into perpetuity, but it seldom works out that way.



Other EMs



As we look across global markets it is interesting to consider some EMs:



<ul><li>SA (like India), could probably loosen the grip on its lockdown measures in order to save a vulnerable economy. The second-order impacts of the continued lockdown will likely be far worse than the damage caused by the virus itself. We expect positive surprises on this front, with the lockdown likely being softened to allow more businesses to open.</li><li>China: We expect China to keep chugging along, despite the structure of its economy being very different to 2008/2009, so we anticipate the policy response needed to reflect that. Looser monetary conditions should be front and centre. However, the relationship with its biggest trading partner (the US) is rapidly deteriorating and this trend is unlikely to stop anytime soon.</li><li>Brazil: As a country this is not in a great place. Going into the pandemic, Brazil was the big reform story of 2020. However, that has unravelled in dramatic fashion, with political and social unrest due to the country’s right-wing President Jair Bolsonaro’s handling of the crisis. The oil price crashing is also not helping Brazil’s fiscal situation</li><li>Russia will be ok. Going into the oil market collapse the country had been building reserves for all of 5 years. Russia also has no external debt and is running twin surpluses. It is difficult to find a stronger balance sheet from a major economy. The oil price collapse is not good for the country as its biggest export commodity, so Russia will go into a recession but we note that the government has more than enough money at its disposal to stimulate fiscally ($500bn in excess reserves for a start). And, we believe that the oil market will eventually rebalance and find a level higher than where it is now.</li><li>India also has significant social unrest due to the government’s handling of the virus. Like SA, the criticism has been directed at the economic sacrifice brought about by government’s lockdown measures. In our view, it will suffer a recession this year, but India’s banks are in far better shape than a few years ago.</li></ul>



Above all else we need to remember that the world will reopen, life will get back to some form of normality, Super Rugby will return, everything will be OK – the world is just going to have to figure out how to cope with all the extra debt.

Op-Ed: Supporting the ICT sector in Africa as a cure for the economic crisis

Op-Ed: Anchor Capital on how to make money out of equities in the aftermath of the global market collapse

JSE-listed airline, <a href="https://www.cnbcafrica.com/videos/2020/02/27/comair-ceo-on-covid-19-impact-on-business/">Comair</a>, has announced the group will enter business rescue to safeguard the interests of the company and its stakeholders after the <a href="https://www.cnbcafrica.com/videos/2020/05/04/covid-19-lockdowns-when-is-the-right-time-to-reopen-economies/">COVID-19 crisis</a> disrupted the implementation of a turnaround plan.



In its H1, FY20 results Comair reported a half-year loss of R564 million. Although revenue grew by 3%, this was reportedly not enough to offset cost increases of 14% resulting from significantly higher fleet and maintenance costs.



Read the full statement below:



Comair enters business rescue in response to unprecedented circumstances resulting from Covid-19



&#8211; Move aims to restructure the airline as a sustainable business



Tuesday, 5 May 2020: Listed airline company, Comair, today announced the group will enter business rescue to safeguard the interests of the company and its stakeholders after the Covid-19 crisis disrupted the implementation of a turnaround plan.



Comair CEO, Wrenelle Stander, said the company, which reported a half-year loss of R564 million for H1 F20, faced an unprecedented situation following the Covid-19 lockdown.



“While we had started making good progress to fix the financial situation six months ago, the crisis has meant we have not been able to implement it as we intended.



“We completely understand and support the government’s reasons for implementing the lockdown, however as a result we have not been able to operate any flights. Now that the phased lockdown has been extended the grounding is likely to endure until October or even November. These extraordinary circumstances have completely eroded our revenue base while we are still obliged to meet fixed overhead costs. The only responsible decision is to apply for business rescue.”



In terms of the lockdown Comair was required to stop flying on 26 March and has not operated any passenger services since. The Covid-19 crisis has also severely affected the global airline industry. A number of carriers have gone out of businesses. Others such as Virgin Australia and Air Mauritius have implemented restructuring processes, similar to business rescue.



“Comair remains solvent and an important contributor to the South African economy. This is a necessary process to ensure a focussed restructuring of the company takes place as quickly as possible so we can take to the skies again as a sustainable business and play our part in the county’s airline industry,” says Stander.



Shaun Collyer and Richard Ferguson have been appointed as the joint business rescue practitioners with effect from 5 May 2020.



Comair was granted approval to suspend the trading of its shares on the JSE with immediate effect. The business rescue practitioners will provide shareholders and all other stakeholders with further updates throughout the process.



The business rescue process will build on the turnaround plan that Comair management was already implementing. It aims to preserve cash, cuts costs, dispose of non-performing assets and strengthen the balance sheet. The Section 189A process, which was part of this plan and that began on 23 March, will continue.



The business rescue practitioners will work with the management team and the board towards Comair resuming operations in accordance with all regulatory requirements, including the health protocols to prevent the spread of Covid-19. Stander said Comair will resume its operations in accordance with government directives and will continue to engage with government to accelerate the opening of the airline industry.



“The health and welfare of our customers, crew and the public is the overriding priority and we will only operate when we are sure we can do so safely.”



Customers with existing bookings will be able to rebook flights within 12 months of their departure date. There will be no charge for any changes made before 1 November 2020.



“Through this process we intend to right-size our operations to be more efficient, agile and customer-centric. This includes, but is not limited to, reconfiguring our network and fleet mix, reviewing portfolios and joint ventures, increased digitisation of the business and new product development and delivery,” says Stander.



“We are confident that with the work we’ve already done and the support of our stakeholders we will get through this process and will be a more sustainable business, better positioned to continue serving the flying public and contributing to the South African economy.”



The business rescue practitioners will contact all stakeholders and suppliers to plan the way ahead in accordance with the processes set out in the Companies Act.



For more coverage on COVID-19 visit: <a href="https://www.cnbcafrica.com/covid-19/">https://www.cnbcafrica.com/covid-19/</a>

International travel for South Africans is now allowed, this is how it will work

COVID-19: SA based airline Comair enters business rescue

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The Johannesburg Stock Exchange is donating its fees that are derived across all asset classes traded from today, Wednesday the 15th of April and Thursday the 16th of April as part of its campaign to support the Solidarity Fund. JSE Group CEO, Leila Fourie joins CNBC Africa for more.

JSE seeks to raise money in support of the COVID-19 Solidarity Fund

JOHANNESBURG (Reuters) &#8211; South African petrochemicals giant Sasol Ltd on Wednesday cut its guidance for synthetic fuel production and liquid fuel sales for this financial year due to a three-week nationwide lockdown linked to coronavirus.



Sasol is now expecting to produce approximately 7.3-7.4 million tons of synfuel against the previously guided range of 7.7–7.8 million tons, the company said in a statement to the Johannesburg Stock Exchange.



It is also targeting sales of 50–51 million barrels of liquid fuel for the financial year 2020, against 57–58 million barrels previously, it said.



Synfuel or synthetic fuel is a form of liquid fuel made from coal in South Africa. Sasol is the world’s biggest producer of motor fuel from coal.



South African President Cyril Ramaphosa imposed a nationwide lockdown at the end of March to contain spread of the deadly coronavirus, which has already <a href="https://www.cnbcafrica.com/news/2020/04/02/south-africa-needs-hundreds-of-thousands-of-covid-19-tests-health-minister/">infected 1,749 people in the country and killed 13</a>.



The lockdown, which prompted rating agency <a href="https://www.cnbcafrica.com/coronavirus/2020/04/03/fitch-downgrades-sa-2/">Moody’s to downgrade the country’s sovereign rating to junk</a>, crashed domestic demand at a time when the economy had already slipped into a recession.



It is projected to contract further in the current financial year.



“Sasol’s management team is in the process of proactively identifying further measures to provide an additional buffer against short-term volatility,” said the company in its statement, referring to the fall in demand in the country.



The group, which is also <a href="https://www.cnbcafrica.com/earnings/2020/03/17/sasol-plans-2bn-rights-issue/">facing high debt levels and falling oil and chemical prices</a>, said it has decided to suspend production at its inland crude oil refinery Natref from April 9.



“A decision was also made by Sasol to reduce daily production rates at our Secunda Synfuels Operations (SSO) by approximately 25%,” it said.



A further reduction in rates may be required depending on further developments in the fuels market, the company added.



However, Sasol said despite the suspension of output at the Natref refinery and lower production rates at SSO, the country’s current demand for fuels and chemicals, including sanitisers, will be met.



It had said on March 31 that its full-year results could be hit by potential disruptions to production, supply chains and construction as the coronavirus continued to spread across the world.



(Reporting by Promit Mukherjee; Editing by Jan Harvey)



This article was first published on Reuters Africa <a href="https://af.reuters.com/article/investingNews/idAFKBN21Q0WO-OZABS">https://af.reuters.com/article/investingNews/idAFKBN21Q0WO-OZABS</a> and is republished with its permission.



For more coverage on COVID-19 visit: <a href="https://www.cnbcafrica.com/covid-19/">https://www.cnbcafrica.com/covid-19/</a>

South Africa’s Sasol cuts production, sales target due to COVID-19 lockdown

JOHANNESBURG (Reuters) &#8211; South Africa’s banking index opened 4.3% lower on Tuesday, a day after the country’s central bank said it had advised lenders not to pay dividends or bonuses amid the coronavirus outbreak.



The decline in the banking index, which recovered slightly by 0703 to stand 3.7% lower, compared to a 1.36% rise across the <a href="https://www.cnbcafrica.com/videos/2020/03/31/jse-ceo-on-moodys-downgrade-covid-19-impact/">Johannesburg Stock Exchange</a> overall.



(Reporting by Emma Rumney; Editing by Catherine Evans)



This article was first published on Reuters Africa <a href="https://af.reuters.com/article/investingNews/idAFKBN21P0VK-OZABS">https://af.reuters.com/article/investingNews/idAFKBN21P0VK-OZABS</a> and is republished with its permission.



For more coverage on COVID-19 visit: <a href="https://www.cnbcafrica.com/covid-19/">https://www.cnbcafrica.com/covid-19/</a>

COVID-19: South Africa eases lockdown to revive battered economy

South African banking index falls over 4% after SARB advises against dividends

Content supplied by <a href="https://www.forexbrokers.co.za/">Forex Brokers SA</a>



Financial Markets around the world and across Africa are currently highly volatile due to the effect of Coronavirus pandemic and oil price war. 



Currencies, Oil
&amp; Stocks have all been hard hit and many major companies on Wall Street,
European Indices &amp; Emerging Economies indices &amp; elsewhere including in
Africa including JSE have lost 30-60% of their value, currency pairs of major
countries &amp; emerging economies have all been affected making them highly
volatile &amp; unpredictable. 



Markets are being driven by human sentiment – fear more than ever. Fear emerging from uncertainty if the markets &amp; economies could recover soon enough has made investors sell off otherwise considered strong assets &amp; stocks.



In Africa, South Africa’s JSE 40 has lost R4.5 trillion Rand of its market cap – with most of the top 40 stocks losing almost 30% since the start of the year till mid-March 2020. 



Like many other countries, SA went on lockdown for 21 days starting on 27th March 2020, and SA economy outlook has been downgraded by Moody’s on 27 March &#8211; <a href="https://www.cnbcafrica.com/news/2020/03/30/south-africas-rand-crashes-to-its-lowest-ever-after-moodys-pulls-the-plug/">sparking more fears of the selloff on South African Rand (ZAR)</a>, which is at its all-time low.



The Nigerian economy has also been badly affected by the crisis &#8211; with Naira trading at over N500 against USD on the futures market. Most stocks on Nigeria’s NSE All-share index have fallen by close to 30% from the year’s high.



Right now, it&#8217;s important as an investor to step back &amp; control your fears amid this crisis and don’t let fear cloud your investing judgment. And look at market fundamentals, long term outlook among other factors.



What you should do?



Look at underlying factors like &#8211; financials,
risks &amp; performance:



Don’t base your decision on short term financial reports, news or based on fear, feeling or hunch. 



Look at overall
outlook &amp; factors like – risks involved, long term returns etc.



As an equity
investor &#8211; Check the company’s past financials
&amp; performance and overall outlook of the industry for the next few years. 



Review
Historic Performance of Company &amp; Sector &#8211; See
if the company has been performing well over the past 5-10 years and offering
good dividends, EPS (Earnings per share).



See if the sector is core &amp; strong &#8211; For example &#8211; sectors like Financial Services, Food &amp; Agriculture and Telecom form a core part of any economy &amp; they are expected to stay strong in the long run. 



Ask Questions &#8211; Will the sector in which the company operates, perform well in the future? Has the sector performed well in the past? Does the sector have strong fundamentals? Is the company run properly with sound management?



If the company that
you are invested in has some edge like &#8211; strong brand or innovative product/technology
or strong backing that will make it stand out even when the sector is
underperforming or even going down. 



Like – Company might have diversified interests in different sectors, or they have strong credible backing like – Government-backed firms, or they are behind some promising or revolutionary technology – like AI or Pharma, etc. Anything that will make it stand strong in tough situations.



Considering current poor economic conditions &amp; outlook – it’s important to look at if the effect on stock price is temporary &#8211; does the company have strong financials &amp; track record that will help it come back after this slowdown. How soon that stock is expected to come back? Many strong global companies with a proven track record have shown to bounce back even stronger after slowdown or recession-like – Microsoft, Amazon &amp; Bank of America. &nbsp;



Look deeply into
financials &amp; performance and don’t hurry your decision.



As a
commodity investor &#8211; 



Commodity prices like that of Oil &amp; Gold are dependent on demand &amp; supply. Investors need to study the fundamentals of the underlying commodity and only then they should invest &amp; don’t invest purely to make quick returns or based on feelings or emotions.



Gold is often considered
to be safe-haven by most investors during market uncertainty. Gold prices have
shown uptrend since 2008. And it has retained most of its value even during ups
&amp; downs. But even then, it can be risky for many investors.&nbsp; &nbsp;&nbsp;



While Oil trading is mostly done by companies &amp; funds, some individual speculators also participate. Oil prices have a very volatile history suggesting it is a very risky investment. Investors need to be cautious &amp; calculate risks before investing in Oil and use risk hedging &amp; risk management.



Oil prices normally fall when there is excessive output and demand is low. Like now – when the travel sector is affected by travel bans &amp; automobile sector is cutting back on production amid a drop in demand due to coronavirus. Oil has seen a huge drop in demand and plus OPEC (oil-producing nations) are stuck in a price war, <a href="https://www.cnbc.com/2020/03/08/oil-plummets-30percent-as-opec-deal-failure-sparks-price-war-fears.html">making oil prices fall drastically</a> and making it highly volatile and unpredictable. Trading in oil has never been riskier. 



Many investors
around the world trade oil on major exchanges worldwide. In Africa too, Oil
futures &amp; options are traded on major exchanges like – JSE &amp; NSE. 



Demand for commodities like Oil will likely come back in the future with price correction &amp; increased demand when the situation improves, but no one can predict with certainty of when or if. Making it a very risky investment. 



Investors using
proper analysis of all underlying factors know this.



As a currency trader – Currency performance is directly linked to economic &amp; geopolitical indicators of the country. If you are trading a currency pair on futures &amp; options market at JSE or with any <a href="https://www.forexbrokers.co.za/">South Africa based regulated forex broker</a> &#8211; then check for the underlying overall economic outlook of the country with a long-term perspective. 



While most speculation/trading on currencies is done on an intraday basis. It is best practice to maintain your position based on long term outlook &amp; strong technical &amp; fundamentals of the economy. 



For example – During uncertain times, US Dollar becomes safe haven for most investors, so currencies of emerging economies like South Africa, Brazil, etc. would likely lose due to risk aversion. So, it is best to base your decision based on long term fundamentals.



Also, another factor to take into note is the overall economy &amp; exports of the countries. The currencies of commodity-based economies have been especially hard hit. Forex: Nigerian Naira has been devalued by CBN due to the 2020’s oil crisis. In the past as well the Naira was affected in 2017 due to the oil price drop. 



Moreover, use proper risk &amp; money management and don’t let emotions overtake your judgment.



Think long term &amp; stick to your
investment plan



Think about your long term plan while investing in any asset class. In short or intra-day, you will likely see a lot of up &amp; down movements. 



But if you look at
the bigger chart- then the asset may actually be in a trending market. So it is
really essential to get the bigger view &#8211; research through the fundamental
factors and base your investment decisions likewise.



Once you have made
the investment decision based on your research – then stick to it unless there
is something really bad that conflicts your original long-term analysis.



What you shouldn’t do? 



Try to pick the top or bottom&nbsp; 



Many investors who are looking to make a profit from this situation or any rising/falling market make this mistake. They obsess about entering or exiting the market at the right price – the highest or lowest price. 



It is almost impossible for anyone (even the seasoned investors) to predict every market move &#8211; even with the right analysis tools &amp; news. Now, almost every investor has access to the same information &amp; technical analysis &#8211; so it wouldn’t give any extra edge to an investor. 



Plus, even if one could perfectly predict one move, he would have to time the move twice to get in &amp; out of the market at the right price. Which is near impossible to get correct all the time.



Don’t try to catch
every move of the market &#8211; tops &amp; bottoms and rely on fundamentals &amp;
think long term.



Get Emotional &amp; lose control of the situation



It&#8217;s very important to control your emotions during market volatility, and not panic. It is easier to get carried away by the flood of bad news, and the erratic market movements. 



Market ups &amp; downs are a normal things in the short term. It&#8217;s important to stick with your long-term investment strategy &amp; not let emotions change it. 



Don’t panic if the market is going against you in the short term. Think about the bigger picture – based on your strategy, that made you enter the market position in the first place. 



Use too much margin or leverage



This Is the most
common mistake that new traders make when trading currencies or derivatives or
commodities. 



Many CFD brokers offer <a href="https://www.forexbrokers.co.za/forex-trading/">forex trading</a> with a very high margin, sometimes it is even as high as 2000:1 leverage at some brokers. Also, forex &amp; equity investors trading in the JSE derivatives market has the option to use <a href="https://www.jse.co.za/services/post-trade-services/risk-management/calculators">margin while trading</a> &#8211; which puts them at risk.



Using too much
leverage to increase your position size also increases your exposure &amp;
risk. And this can multiply your losses, often higher than your original
capital. 



So, it is really important to avoid margin trading at all times, or use the leverage of no more than 1:5 if you really must.



Obsess too much with your current market position 



Many new investors
have a habit of looking at their portfolio again &amp; again &#8211; especially when
the market is going against them. This often results in panic &amp; wrong
decisions. 



Long term investors
shouldn’t obsess too much over the current market situation as it does not help.
If you are investing in an asset with a long-term view – then it is best to not
look too often at your portfolio. 



Think about – why you decided to invest in that asset &amp; what changed overtime that the asset is no longer investable. Ex: If you invested in company A – that has strong fundamentals, good future projects, growth perspective &amp; solid growth over many years, then think would the current situation affect the company in the longer term. If not – then stick to your plan &amp; don’t let every short-term market movement affect your decision.

Stock market exchange graph price drop with red numbers investment lose of business financial digital background – Candle stick charts stock crash crisis fall risk decreasing arrow down trend sell

Op Ed: Why you shouldn’t make your investment decision based on panic during market volatility?

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The JSE is expected to see massive capital outflows from the bond market when South Africa gets kicked out the World Government Bond Index because of its junk status rating. But CEO Leila Fourie says the net market fallout may be limited by active fund managers picking up the slack from passive funds that dump our non-investment grade bonds. JSE Group CEO Leila Fourie joins CNBC Africa for more.

JSE CEO on Moody’s downgrade & COVID-19 impact

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While most companies prepare to go on lock-down at midnight tomorrow – the JSE will continue, business as usual. Africa’s largest exchange was recognised as an essential service exempt from the three week lock-down by the country’s President Cyril Ramaphosa. Joining CNBC Africa for more is Leila Fourie, CEO, JSE.

Africa’s largest exchange to remain open during lock-down

JOHANNESBURG (Reuters) &#8211; South Africa’s rand fell to a more than four year low, stocks sunk back to 2013 levels and bond yields spiked on Wednesday, as a wave of stimulus from governments around the world failed to quell panic about the coronavirus pandemic.



At 12:54 GMT, the rand &lt;ZAR=D3 traded at 16.9800 per dollar, 2.41% weaker than its previous close, while stocks lost the majority of the gains clawed back since Monday, when the Johannesburg Stock Exchange (JSE) suffered its biggest ever daily fall. 



Markets globally were stumbling again as cases of coronavirus continued to rise and countries took increasingly draconian measures to stem the increase, with a flight from riskier assets being felt across emerging markets. 



“The rand is not alone in its losses &#8230; unfortunately the rand being as liquid as it is, it’s being caught up in the foray,” said Quinten Bertenshaw, director at ETM Trading. 



“Anybody that’s looking to hedge out any EM (emerging market) risk at the moment will be doing it in the rand.” 



The ongoing rout in South African markets means there is mounting pressure on the South African Reserve Bank ahead of a key interest rate decision on Thursday, when it is expected to cut rates in a bid to shore up an already ailing economy. 



Numerous other central banks and governments around the world have stepped in to provide large-scale support measures to businesses and consumers hurt by the coronavirus fallout. 



While Bertenshaw said a 100 basis point interest rate cut was a possibility, he added it would have to come alongside a “concerted fiscal effort” from the government, though it might not have the room in its budget to do what is required to keep the economy afloat. 



South Africa tipped into recession in the final quarter of last year, and the pandemic is expected to make matters worse by hitting tourist arrivals and commodity exports to major trading partner China. 



Both the JSE’s blue-chip top-40 index and the broader all-share index were down by around 7.5%. Many financial firms suffered, with the banking index down 12.17%. 



Other firms that bore the brunt of the declines on the blue-chip index were Impala Platinum Holdings, down 36%, and petrochemicals company Sasol. 



In fixed income, the yield on the 10-year government bond due in 2030 jumped by 75.5 basis points to 11.5%. 



(Reporting by Olivia Kumwenda-Mtambo and Emma Rumney; Editing by Amy Caren Daniel and Mark Potter)



This article was first published on Reuters Africa <a href="https://af.reuters.com/article/investingNews/idAFKBN2152B6-OZABS">https://af.reuters.com/article/investingNews/idAFKBN2152B6-OZABS</a> and is republished with its permission.

South African rand, stocks sink as coronavirus pummels markets again

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Futuregrowth claims the JSE has backtracked on previous agreements made between the parties when it comes to bond market reforms. CNBC Africa spoke to Olga Constantatos, Futuregrowth&#8217;s head of credit for more.

Why Futuregrowth has beef with the JSE over bond reforms

<a href="https://www.cnbc.com/elliot-smith/">Elliot Smith</a> <a rel="noreferrer noopener" href="https://twitter.com/@ElliotSmithCNBC" target="_blank">@ELLIOTSMITHCNBC</a>





KEY POINTS



<ul><li>The death toll rose to 80 as of the end of Sunday, according to Chinese officials, with more than 2,700 people now infected.</li><li>A fifth case in the U.S. has now been confirmed and the virus has been detected in Singapore, South Korea, Australia, Canada, France, Japan, Malaysia and Vietnam.</li><li>The flight from risk comes amid concerns about a possible economic fallout from the virus, with experts recalling the impact of the SARS crisis in 2003.</li><li>The pan-European Stoxx 600 fell 1.7% early in the trading session, while in the U.S., Dow futures indicated a plunge of almost 400 points at the open on Wall Street.</li><li> Africa&#8217;s largest stock exchange&#8217;s JSE All-Share Index fell 2.4%. </li></ul>



Investors worldwide have been spooked by the rapid spread of the Chinese coronavirus, with stock markets around the globe sharply lower on Monday.



The death toll rose to 80 as of the end of Sunday, according to Chinese officials, with more than 2,700 people now infected. A fifth case in the U.S. has now been confirmed and the virus has been detected in Singapore, South Korea, Australia, Canada, France, Japan, Malaysia and Vietnam.



Africa&#8217;s largest stock exchange&#8217;s JSE All-Share Index fell 2.4% in intra-day trade, pan-European <a href="https://www.cnbc.com/quotes/?symbol=.STOXX">Stoxx 600</a> fell 1.7% early in the trading session, while in the U.S., <a href="https://www.cnbc.com/quotes/?symbol=.DJI">Dow</a> futures indicated a plunge of almost 400 points at the open on Wall Street.



While most markets in Asia were closed for the Lunar New Year, Japan’s&nbsp;<a href="https://www.cnbc.com/quotes/?symbol=.N225">Nikkei 225</a>&nbsp;fell by more than 2% in afternoon trade while the Topix slipped 1.6%.



The flight from risk comes amid concerns about a possible economic fallout from the virus, with experts recalling the impact of the SARS crisis in 2003. At a press conference on Sunday, China’s top health official said the virus’s transmission ability is strengthening.



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In a note Monday morning, Danske Bank Chief Analyst Allen von Mehren said that the Chinese economy is likely to take a short-term hit and a possible GDP (gross domestic product) reduction of one percentage point in the first half of 2020.



“The SARS epidemic lasted three to four months but it is hard to say if this is any guide. While the government response is faster, the new virus seems to be spreading faster. It is too early to judge when it will get under control,” von Mehren said.



Traditional so-called safe haven assets surged on Monday.&nbsp;<a href="https://www.cnbc.com/quotes/?symbol=@GC.1">Spot gold</a>&nbsp;was trading up by 0.78% at just below $1,582.6 a troy ounce early in the European session, while the&nbsp;<a href="https://www.cnbc.com/quotes/?symbol=JPY=">Japanese yen</a>&nbsp;changed hands at 109 against the dollar. The&nbsp;<a href="https://www.cnbc.com/quotes/?symbol=CHF=">Swiss franc</a>&nbsp;was also among the strongest-performing currencies.



Government debt prices also surged, sending bond yields tumbling. The yield on the benchmark&nbsp;<a href="https://www.cnbc.com/quotes/?symbol=US10Y">U.S. 10-year Treasury</a>&nbsp;note fell to 1.6218% to hit its lowest since October, while the&nbsp;<a href="https://www.cnbc.com/quotes/?symbol=US30Y">30-year Treasury bond</a>&nbsp;yield slid to 2.0825%.



The yield on the German&nbsp;<a href="https://www.cnbc.com/quotes/?symbol=DE10Y-DE">10-year Bund</a>&nbsp;plummeted to -0.3550% while U.K.&nbsp;<a href="https://www.cnbc.com/quotes/?symbol=UK10Y-GB">10-year Gilt</a>&nbsp;yields fell to 0.543%, their lowest since October 10.



Danske Bank analysts projected that the Chinese service sector is likely to take the main hit this time around, and is much bigger than it was during the SARS epidemic, now standing at 54% of GDP versus 42% in 2003.



From a global perspective, China now accounts for 19% of the global economy in purchasing power parity (PPP) adjusted terms versus 9% in 2003.



A mitigating factor could be that the import content of the service sector is much smaller than in manufacturing, but the uncertainty is likely to cause some global economic spillover, von Mehren suggested.



“Hence, there is a clear risk that the expected recovery in growth and PMIs (Purchasing Managers’ Index) could be somewhat delayed or at least be more muted. As in China, the effect should be temporary, though,” he added.



“We are in uncharted waters as a virus of this kind has not taken place in the more modern economy that China is today, with much wider transport networks and being more integrated with the global economy.”



This article first appeared on CNBC <a href="https://www.cnbc.com/2020/01/27/global-stock-markets-roiled-as-chinas-coronavirus-spreads.html">https://www.cnbc.com/2020/01/27/global-stock-markets-roiled-as-chinas-coronavirus-spreads.html</a> and is republished with its permission

World markets roiled as China’s coronavirus spreads

Source: Securities Africa 



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="435" height="415" src="https://www.cnbcafrica.com/wp-content/uploads/2020/01/se.jpg" alt="" class="wp-image-352823" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2020/01/se.jpg 435w, https://cms.cnbcafrica.com/wp-content/uploads/2020/01/se-300x286.jpg 300w" sizes="(max-width: 435px) 100vw, 435px" /><figcaption> South Afruca: FTSE/JSE&nbsp;Africa&nbsp;All Share Index&nbsp;rose 8.2%. </figcaption></figure>

The best and worst performing African stock exchanges in 2019

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The Johannesburg Stock Exchange and seven African partner exchanges hosted the African Exchange Linkage Project which aims to increase and strengthen cross border trade between African countries. Joining CNBC Africa for more is Anne Clayton, Head of Public Policy at the JSE.

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JSE

JSE slaps EOH with R7.5mn fine

JSE launches new sustainability segment

Grit Real Estate CEO on company delisting from the JSE

JSE unveils relief measures for business in distress

Op-Ed: Anchor Capital on how to make money out of equities in the aftermath of the global market collapse

COVID-19: SA based airline Comair enters business rescue

JSE seeks to raise money in support of the COVID-19 Solidarity Fund

South Africa’s Sasol cuts production, sales target due to COVID-19 lockdown

South African banking index falls over 4% after SARB advises against dividends

Op Ed: Why you shouldn’t make your investment decision based on panic during market volatility?

JSE CEO on Moody’s downgrade & COVID-19 impact

Africa’s largest exchange to remain open during lock-down

South African rand, stocks sink as coronavirus pummels markets again

Why Futuregrowth has beef with the JSE over bond reforms

World markets roiled as China’s coronavirus spreads

The best and worst performing African stock exchanges in 2019

African Exchange Linkage project looks to boost cross border trade on the continent

News Tips

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