Greetings and Happy Friday!

Comparison is a way to get perspective of how one is doing versus the neighbour, friends, family, the rest of the world, you get it. It’s generally not healthy to compare because we’re all on our own course in this life and our priorities can differ quite remarkably from one to another.

However, it’s worth getting an idea, from a financial perspective, of how we compare to fellow South Africans and indeed to others in the rest of the world. Below is a very interesting tool to use to do just that- it reveals two things, just how poor many people in many countries are and how sadly unequal the world really is. The other thing it shows us is how grateful we need to be for what we have. in the disparity, particularly in our own SA, It shows us that there is much that we can do to help others, which is most probably what you’re doing already.

Give it a try, click on this link and then click on START and scroll down until you can click on South Africa, then enter your income etc. and when you get to ‘Do you have any shareholdings in companies?’ click yes and enter your investment portfolio total amount and then click the down arrow to see how you shape up financially in SA and the world- Income Comparator – WID – World Inequality Database

If you want, I’d love to get your feedback, just reply to this email please.

In the News this Week:

• The rand teetered throughout the week but ended mostly lower against the majors.
• Vehicle sales continued to recover in February, driven primarily by commercial vehicle sales.
• Gross reserves fell by 1.8% m-o-m in February.
• Global manufacturing PMIs remained in expansion territory in February, while services activity was mixed.
• US nonfarm payrolls rose by 379 000 in February from a revised 166 000 a month earlier.
• Direction: The economy advanced by a seasonally adjusted and annualised 6.3% q-o-q in the fourth quarter of 2020 from an upwardly revised 67.3% (previously 66.1%) ‘rebound’ in the previous quarter. This was much higher than our and Reuters’ consensus forecast of 3.9% and 5%, respectively. The annual contraction in output eased to 4.1% from a downwardly revised 6.2% (previously -6%) in the third quarter. For the year as a whole, the economy contracted by 7% in 2020 from 0.8% and 0.2% growth in the preceding two years, slightly less than our forecast of -7.2%.
• The industry breakdown: On a seasonally adjusted q-o-q basis, eight of the 10 industries recorded growth in the fourth quarter. The most significant increases occurred in manufacturing (21.1%), trade, catering and accommodation (9.8%) as well as transport, storage and communication (6.7%). Notably, the same three industries were the hardest hit by the pandemic and therefore contributed the most to the 7% annual contraction.
• Changes: In light of the current economic environment, Statistics South Africa will no longer publish GDP on a q-o-q seasonally adjusted annualised basis, as statistical distortions caused by the pandemic make such numbers erroneous to interpret. In the future, the agency will therefore publish q-o-q seasonally adjusted real GDP as the headline figure, in line with various major advanced economies. Year-on-year growth rates and year-to-date numbers will be released as previously.
• The expenditure breakdown: Expenditure on GDP rose by 6.5% following a revised 68.1% (previously 67.6%) expansion in the third quarter. Most sectors returned to almost normal operations during most of the last quarter when the lockdown level was reduced to a less restrictive level 1. All spending categories (households, government and fixed capital) increased, but the higher contributor was consumer spending, which added 4.7 percentage points to total growth. However, the net export position negatively contributed, as import growth outpaced exports growth. The rundown in inventories also continued.
• Outlook: The economy will fare better in 2021. The global recovery will pick up as vaccine distribution gathers momentum. The normalisation of operations, coupled with unprecedented monetary and fiscal stimulus in developed countries, should support commodity prices and export growth. As a result, the country’s net export position is forecast to improve. On the consumption side, household spending growth will rise off a low base. The gradual rollout of the vaccination should ease anxiety and prop up confidence. Low interest rates and subdued inflation will provide further support. However, the upside will still be limited by a weak job market and relatively slow income growth. Any resurgence in infection rates would probably result in stricter lockdown measures, potentially derailing the expected recovery. The outlook for private sector investment spending remains poor due to limited progress with policy reforms and structural constraints, particularly the country’s inadequate, unreliable, and relatively expensive power supply. We forecast GFCF to contract slightly in 2021 before growing modesty in 2022 as the global recovery gathers pace. Fiscal consolidation measures will limit spending by government to the low single-digits. We expect real GDP growth to normalise to around 4% (previously 3.5%) in 2021.

Please give us a call or email if you need any assistance. Have a great weekend!

Kind regards,

Your TurnPoint Team

Vic Hodoul CFP®
Certified Financial Planner®
Cell +27 (0) 79 353 1076 Email vic@turnpoint.co.za

Office/Admin Manager: Arlene Schoeman: +27 (0)21 555 1010 Email arlene@turnpoint.co.za

TurnPoint Investments
Website: Authorised Financial Services Provider (FSP12820) (turnpoint.co.za)
Milnerton Office: 5 Royal Atlantic, Sunset Beach 7441
Cape Town Office: Suite 824, The Onyx, 57 Heerengracht Street, Foreshore 8005
Tel +27 (0)21 555 1010 Fax +27 (0)86 589 2738

Individual and Corporate Investment, Retirement, Estate, Risk and Tax Planning Solutions

TurnPoint Investments (Pty) Ltd. Registration Number 2003/020010/07 | Financial Service Provider (FSP licence number 12820) Directors VD Hodoul DL Hodoul