♫ Have a Holly Jolly Christmas…
It’s the best time of the year ♫! We have made it – the last month of this surreal year is finally here! Although some of us cannot wait to see this year in the rear-view mirror, there are a few weeks left and hopefully Christmas will hold some cheer for us all. Please note that our offices will be closed for the Christmas Break from 16h00 on Friday the 18th of December and will reopen on Monday the 4th of January 2021 – a year which we have no doubt will be a better year for everyone.
♫ Last Christmas … ♫
At this time of year, I am always compelled to look back at the last few quarterly newsletters written in November. The November 2017 newsletter spoke about Bitcoin – a craze that quickly died down as prices fell and as I had alluded to then, like gambling, much money was lost. What a turnaround we have seen in Bitcoin during the last five months of 2020 – Bitcoin broke the $ 19 000 mark towards the end of November and as seen in December 2017 seems primed for a push at the all-time high of $ 20 000. Hardly a week has gone by without a headline screaming “New high for bitcoin”. Sounds all too familiar… This recent surge is very similar to the run-up in price in late 2017 but this time cryptocurrencies have seen far greater institutional support whereas in 2017 it was largely retail investors behind the surge in price. We do maintain that to try and predict where the price of Bitcoin is headed, is an impossible task as it has ZERO intrinsic value. We are still aware that there is money to be made if it is money you are prepared to lose – trading in Bitcoin is much like gambling where the material risk of capital loss is very
high!!! That same newsletter mentioned the downgrade to ‘junk’ by the S&P, on the 24th of November 2017; this year we saw a further downgrade from Moody’s and Fitch on the 20th of November – markets were unaffected – perhaps expected and therefore not surprising market participants at all! In December of 2017, we were all waiting for the outcome of the ANC Elective Conference – the future of our country rode on that outcome! Looking back, we are grateful for the outcome, more particularly during 2020 and the curve ball thrown by COVID-19. See the link to our past newsletters here: https://www.finlaw.co.za/news/. The strange similarities between our November newsletters written 3 years apart is hardly surprising as I think we have seen very little change in RSA over this time period – another case of “the more things change, the more they stay the same.” While this can be worrying for us, we are strong believers and remain hopeful that REAL change is on the horizon – it may just start looking a lot like Christmas…
♫It’s Beginning to Look a Lot Like Christmas… ♫
I think it is important that we look back at the many positive events that have occurred over the last year, starting closer to home:
- More than 100 people have now been arrested in SA’s recent corruption blitz by the National Prosecuting Authority [NPA] and the Hawks. Those arrested include former Free State premier Ace Magashule, high-ranked police, government officials, businessmen and businesswomen. This article https://www.businessinsider.co.za/these-are-all-the-high-profile-arrests-made-in-the-last-week-2020-10 gives a more detailed list of some of the top officials who have been arrested. May this be the beginning of the end to corruption…
- The ZAR has continued strengthening and reached R 15.09 on the 26th of November and finally settled at R 15.30 to the US$ at the end of November – levels last seen at the beginning of March before our local lockdown commenced! Certainly, nowhere near the exchange rates predicted at the beginning of lockdown…
- We have seen the price of Petrol Unleaded 95 drop from R 16.16 on the 01/01/2020 to R 14.46 on the 02/12/2020. Although this may not last long [as National Treasury and Government need to find more ways of increasing tax revenue], a certain welcome relief for everyone financially impacted by the devastating consequences of COVID-19…
- The JSE All Share Index [ALSI] is up from the low of 37 963.0108 on the 19/03/2020 to 58 281.9766 on the 02/12/2020 [in November alone, the JSE was up 9.96%!!!]
- New positive COVID-19 cases recorded in South Africa on the 30/11/2020 was 2 302, down from the record high of 13 944 on the 24/07/2020. Although we are seeing a slight increase in daily numbers, the number of recorded deaths are down from the high of 572 on the 22/07/2020 to 58 on the 30/11/2020. We urge our clients to remain vigilant and safe and to follow the regulations set out by the National Government.
A little further form home:
- Joe Biden wins the US election…Technically it’s not official yet, but everyone agrees other than Donald Trump! The markets preferred the close call on the outcome rather than having a clear-cut winner. With Biden winning the overall election, the Democrats controlling the House and the Republicans [most probably] keeping control of the Senate, there is no overwhelming majority to bring in the “bad for business” changes to tax legislation that Biden may have wanted to. It is safe to say that stock market investors won this round, but we are keeping a close eye on President-elect Biden to see how he plans to undo four years of breaking down US trade relations with most of the world.
- We are no closer to a Brexit deal than we were at the beginning of the year. The consensus is still that a last-minute deal will be agreed, so it is important that we keep a close eye on the pound, the euro as well as the UK and European markets. It will be a while yet before these economies are properly decoupled and at this stage a deal will be positive for both the EU and the UK. If nothing else, then just because it brings some clarity to the markets.
- Despite obvious economic challenges, vaccine news during the month translated into November being a bumper month for global stock markets with the S&P 500 gaining 10.8% – the biggest monthly gain for the S&P 500 since April 2020. A very interesting article on the development of the potential vaccine can be found here:https://indianexpress.com/article/explained/how-pfizer-moderna-oxford-covid-vaccine-was-developed-in-record-time-7077085/
♫ We Wish You a Merry Christmas…♫
♫Have yourself a merry little Christmas. Let your heart be light. From now on your troubles will be out of sight ♫. We are confident that 2021 will be a better year for us all. We thank you for your continued support this year and for trusting us to grow your wealth – our greatest concern. As usual, please feel free to contact us should you wish to make an appointment or chat over the phone – we look forward to seeing you all in 2021. ♫We do hope it’s a good one, without any fear♫!”
