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The United Kingdom's Budget Statement was delivered by The Chancellor of the Exchequer, George Osborne, on Wednesday 16 March 2016
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market indicators
- The Rand was firmer against the Dollar late Friday trade (8 April 2016) as an increase in oil prices led to a recovery in investor risk appetite, boosting emerging markets currencies, like the Rand
- The FTSE/JSE All Share Index (+6.4% in ZAR, +14.2% in USD) rose – buoyed by improved emerging market sentiment, despite weak economic fundamentals
- Gold jumped to its highest in nearly three weeks this month, so far as Asian equities slid and the Dollar held close to six-month lows, increasing the demand for the safe-haven metal
- The JSE Gold Index is already up +106% this year, making it tough to buy gold shares after such a sharp jump
- The move in the oil price over the past two days to a four month high above $41 a barrel, which is a positive for resource shares - especially for Sasol (3.3% of the ALSI), although the stronger Rand is offsetting some of that
- Global equity markets (+6.9%) were resurgent after four months of declines – major central banks maintained accommodative monetary policies, allaying investor concerns of further global growth slowdown
- US equities (+6.8%) gained as the US Federal Reserve sustained its dovish commentary, announcing expectations for a 'somewhat slower' pace of interest rate increases – noting that fragile global economic conditions did not warrant an accelerated tightening of monetary policy
- Chinese equities (+11.9%) outperformed despite weak manufacturing and trade data in February
- The US Dollar weakened against most major currencies—including the Euro (+4.9%), Japanese Yen (+0.4%), Swiss Franc (+4.0%), and British Pound (+3.1%)
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editorial
if I had presented recent happenings as a script, the studios would have refused it
words by mauro forlin, operations director
Right, so lately I get the feeling that the world is getting stranger. Let us cast our minds back to the mid 90’s for a moment. Bill and Hillary Clinton were living in a big white house in Washington DC. Turns out that the Clintons enjoyed living there so much that they are campaigning for another turn to live there. The Clintons have some competition though from the Trump family whose breadwinner was very busy in the 90’s rebuilding his empire and rehearsing to use the words 'You’re Fired!' whilst blow drying his hair. Fast forward to today: 'The Donald' and Hillary Clinton are both applying to be the next 'Leader of the Free World'. The last time US politics was this strange an actor was trying to run the United States and succeeding.
Now let us go over to the other side of the pond. Two weeks ago a Panamanian law firm had some form of confidential client file leak and many celebrities and sport star's financial information was all over SKY News and CNN. One of the persons whose information was leaked was none other than UK Prime Minister, Mr David Cameron, whom apparently inherited an investment account in Panama. He, however, liquidated this account, paid the UK Capital Gains Tax and that was that. Or so he thought! Now he is facing all sorts of questions about his family’s wealth and how it is structured. Just because a person has money or investments offshore, this does not make it illegal.
Europe is facing all sorts of problems with illegal immigrants from Syria and Africa, to the point that the Austrians want to close their borders so that no more illegal immigrants can enter Austria, which flies in the face of the Schengen Treaty. Britain wants to leave the European Union, Germany wants to call the shots and France seems to be confused by all this.
Here in South Africa, on the of December 9th last year, the President fired the finance minister and then changed replaced two finance ministers in four days. The international community voted with their feet and the Rand was very quickly staring at R17 to a Dollar. Today the Rand was trading as low as R14.19 to a Dollar. This, after the president was found guilty of not supporting the constitution. His 'friends' the Gupta family fled their Saxonwold mansion and hopped on their jet and landed in Saharanpur in India.
So how does all this translate to financial markets? Well, the effect of all these events on stock markets is minimal. We have to remember that whilst all this is going on, companies like SABMiller will continue to produce and sell beer all over the world; Nestle with its Swiss head office will continue to produce baby milk powder and Microsoft will continue to produce systems most people use in their computers. What we have seen recently is interest in commodity prices and this will benefit South Africa - because it is a commodity-producing economy and if this continues, we should see the South African GDP improve. Let's hope!
Here at Global & Local we continue to work passionately to provide the most appropriate advice to benefit you and your family. Recently we took part in the Gandhi Walk in Lenasia and wow did the crew do well. So much so that one of staff members was the second one home for the 6km walk.
It continues to amaze me that in 2009 we advised on a total of R350 million on behalf of some 2800 clients. Today the capital we advise is in excess of R4 billion on behalf of about 3500 clients. Not only that but we can offer you short and long term notice deposits and foreign exchange services. Access to funds that are not available from other advisory firms and also access to very specialised investment products and funds.
Whilst we have grown fast we always remain dedicated to you and your family’s well-being and the difference now is that we can offer you advice on a multitude of products, offered by both onshore and offshore product providers.
On May 11th we will be hosting a joint presentation in Lenasia with Allan Gray. We would love to see you there, so come join us.
Have a great May everybody.
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'this budget takes another step to move britain from a country built on debt, to a country built on savings and investment.'
― george osborne
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http://www.economist.com/news/world-week/21695941-kals-cartoon
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spotlight
UK budget speech 2016 - a summary
words by jaye spence, HOD - technical
The United Kingdom's Budget Statement was delivered by The Chancellor of the Exchequer, George Osborne, on Wednesday March 16th 2016. The Chancellor has announced a series of significant new measures in his latest Budget speech, including a new type of ISA a tax free savings account) and changes to income tax.
Here is a summary of the key points mentioned in the 2016/2017 budget speech:
What does the budget mean to savers?
The Government announced that it will introduce a rise in the annual ISA allowance, from £15,240 to £20,000 in April 2017. It will remain level at £15,240 in the 2016/17 tax year, and will increase next year starting April 6th.
Younger generations will also be offered a new Lifetime ISA, available to anyone aged between 18 and 40. It’s designed to help those who are building up cash towards their first home or their retirement and is expected to be available from April next year.
- Under the proposals, savers can pay up to £4,000 a year into a Lifetime ISA and the Government will add a bonus worth 25%, or £1 for every £4 saved. These top-ups will be available until savers reach the age of 50. Contributions into a Lifetime ISA will count towards their annual ISA allowance
- The savings and bonus payments could be used to buy your first property worth up to £450,000, a minimum of 12 months after opening an account. Those already saving into a Help to Buy: ISA will be able to transfer these savings into the Lifetime ISA, or save into both. However, only the Government bonus paid into one of these accounts can be used to buy a home
- It will be possible to access the savings and Government bonus payments tax-free and penalty-free for retirement after the age of 60
- If savers want to withdraw cash from their Lifetime ISA to pay for something other than their first home or retirement, they will have to pay a 5% fee and hand back the Government bonus on the contributions that are being withdrawn, plus any interest or growth earned on the top-up. However, the Government is considering relaxing these restrictions in future, making Lifetime ISAs more flexible
How will your income be affected?
There was a further increase to income tax thresholds. The changes due in 2017 will only apply in Scotland if they are adopted by the Scottish Government.
Income tax thresholds are already set to rise on April 6th this year. The personal allowance is increasing from £10,600 currently to £11,000. In April 2017, this will rise to £11,500. The 40% tax threshold is increasing from £42,385 to £43,000 on April 6th this year and this will also rise again in April 2017, jumping to £45,000. Someone earning between £45,000 and £100,000 annually will be £500 a year better-off compared to 2016/17 as a result of these changes to income tax thresholds.
What does the Budget mean for UK investors?
There were a number of measures in the Budget that may affect investors:
- The Chancellor announced that Capital Gains Tax (CGT) rates will be reduced from April 6th this year, providing a boost for investors holding assets outside ISAs and pensions
- The CGT rate for higher and top-rate taxpayers will fall from 28% to 20%, while the rate for basic-rate taxpayers will be reduced from 18% to 10%. But the rate cuts will not apply to residential properties or carried interest, so buy-to-let investors won’t benefit. If a property is your main residence, CGT does not apply
What does the Budget mean for your pension?
The Chancellor revealed plans for a consultation on a new Pensions Advice Allowance, proposing to allow savers to access up to £500 from their defined contribution pension – before the age of 55 – to pay for financial advice.
There were no further significant tax changes to existing pension rules, following media reports that George Osborne decided to shelve plans to reform pension tax relief rules.
A number of other pension changes that have been previously announced which will still take place from April 6th. The Lifetime Allowance (LTA) on pensions, the total amount that can be drawn from pension schemes without incurring an extra tax charge, will fall from £1.25m to £1m.
What will the effect on Small Businesses be?
Other tax breaks aimed at the business community are also encouraging, particularly for smaller companies. The Chancellor outlined plans to continue reducing corporation tax to 17% by 2020, while the introduction of new tax thresholds for small business will provide them substantially greater tax relief. The government now estimates that some 630,000 business which will no longer pay any corporation tax.
Resources - Barclays: The 2016 Budget Explained
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company news
Global & Local has welcomed another two new staff members to the administrative team - Kajal Bobby and Wandile Mduli.
Our new website is also live: go and explore it and be sure to give us your feedback.
2016 gandhi walk
words by toshita ballack
April 17th 2016 marked the 31st annual Gandhi Walk and fun run, honouring Ahmed Kathrada. Global & Local proudly part sponsored this truly inspirational event. Between 5000 and 6000 walkers and runners attended this day. There was an amazing amount of encouragement along the route, with marshals, medical teams and even cyclist assisting walkers and runners. There were many watering points along the route providing walkers with water and Coke throughout the walk. Our teammate, Fulvanti Vallabh came in second in place in the 6km walk which has made us proud, well done Fulvanti!
The entertainment after the walk was extremely captivating. Mo Magic was there which brought a ‘WOW!’ factor, and as always our perfect Indian dances from Fusion Mela Show were there to entertain the crowds. Amongst the other entertainment was the prominent Karo Charo that produced his fantastic stand-up comedy which had the crowd rolling with laughter.
Global & Local’s marque and staff were there at the finish line to welcome runners and walkers back.
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Back row from left to right: J. Samuels, T. Dasaraden, D. du Bois, M. Forlin, W. Wittstock, F. Davidson, F. Vallabh
Front row: J. Spence, T. Ballack, A. Saunders, N. Milicevic
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contact us
Global & Local
investment & retirement specialists
175 barry hertzog avenue, emmarentia, johannesburg 2195
t | +27 11 486 2500 f | +27 11 486 2915
admin@globallocal.co.za
www.globallocal.co.za
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not based in johannesburg?
visit one of our other branches
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67 somerset road, greenpoint
t | +27 21 418 0553 f | +27 21 418 0891
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126 rose avenue, lenasia
t | +27 11 854 1351 f | 086 671 9294
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