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Speaker 1: And now The Money Show with Stephen's credit on seven.

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Speaker 2: Oh two, let's walk little. The Money Show with Stephen

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Speaker 2: Curtis is brought to you by Absente Corporate and Investment Banking,

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Speaker 2: Balancing economic growth with ecosystems. That's how they're invested in

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Speaker 2: your story. Seven minutes after six, good evening, Welcome to

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Speaker 2: the program. I'm Stephen Curtis today. That'll probably be remembered

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Speaker 2: for the deal involving fly Herith General Partners buying, not

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Speaker 2: into it, buying it pretty much the whole deal. We

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Speaker 2: don't actually have a price that they're paying now at

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Speaker 2: the moment. I do wonder if that'll come out, and

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Speaker 2: due course the curious part of me of course would

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Speaker 2: like to know. I think we all would. But also

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Speaker 2: just interesting to watch the strategy of at Sepport Mahaula,

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Speaker 2: who of course is the person who makes most of

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Speaker 2: the big decisions there where the plan is investing in

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Speaker 2: the South African economy in a big way, but also

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Speaker 2: in the aviation economy. They already own a big chunk

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Speaker 2: of Lance Area, of course, and so you can think

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Speaker 2: of all of the linkages. I mean, if you go

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Speaker 2: to Lance Area most days, it kind of looks like

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Speaker 2: a fly Safe terminal because they use that and there

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Speaker 2: are all sorts of reasons as to why that is

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Speaker 2: much of the time, and you just get a sense

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Speaker 2: that there are all sorts of advantages. I am a

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Speaker 2: little curious as to whether the people who owned fly

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Speaker 2: Safe ASL they're based in Ireland, of course, if those

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Speaker 2: findings about the ownership, the fact that they aren't deemed

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Speaker 2: to be South African, there's a bit of a complicated

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Speaker 2: share structure. You've heard arguments about it before on the

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Speaker 2: Money Show, if that was a factor in their decision

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Speaker 2: to sell, Because for Hareth, you're taking over a profitable

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Speaker 2: airline that has two thirds of the domestic market. I mean,

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Speaker 2: what's not to like about that? So very interesting just

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Speaker 2: to watch that play out, well, speak more about it,

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Speaker 2: will speak to fly Safe still hoping to speak to

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Speaker 2: her general partners, if not today, maybe in the next

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Speaker 2: day or so, just to get a better understanding of

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Speaker 2: the deal. The other thing that was very interesting and

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Speaker 2: just sort of talking about what's coming out of the

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Speaker 2: mining in Daba Dan, Marikana, the coda saying there's more

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Speaker 2: than one way to unbundle Eskim and his point of course,

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Speaker 2: is this huge argument that seems to be not quite

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Speaker 2: blowing up yet, but heading that way. I fear around

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Speaker 2: the unbundling of ESCUM. The original plan was that Escum

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Speaker 2: would be broken into three. It would be a completely

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Speaker 2: sort of neutral the way in which the grid was operated,

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Speaker 2: a big business. Very concerned that that's not the way

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Speaker 2: things are looking now. Maracan is still saying they're worried

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Speaker 2: about the four hundred billion randsworth of debt, and as

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Speaker 2: I understand the fear, it would sort of if ESKIM

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Speaker 2: were broken up, that debt would fall due. Government wouldn't

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Speaker 2: be able to pay it. There would be what's called

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Speaker 2: a sort of cascade or a cross default. Everybody who's

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Speaker 2: owed money by ESCAM would demand all of the money

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Speaker 2: they owned owed by everyone else in government, all of

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Speaker 2: the other SOEs and that's where all of the trouble

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Speaker 2: would really lie. I have to say, all the business

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Speaker 2: people I've spoken to and heard from say that's not

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Speaker 2: the case at all, and so it's getting a bit

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Speaker 2: MESSI I just worry. I just think there's got to

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Speaker 2: be a way around this. It's got to be a

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Speaker 2: better way to fix it. And kind of somehow the

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Speaker 2: communication is not working. We'll talk to doctor Andiles Sancu,

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Speaker 2: the chair of trans Net in a moment, looking forward

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Speaker 2: to that conversation about the sort of phase trans nets

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Speaker 2: in now he's at the mining and Darbor, so many

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Speaker 2: people are and just sort of where transnet goes. If

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Speaker 2: you look at mining in the future of South Africa,

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Speaker 2: and I mean, let me be clear, the future is

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Speaker 2: kind of hit. So we're looking the next few years.

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Speaker 3: You know.

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Speaker 2: Gulmbadam, the chief economist at Standard Bank, he's been looking

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Speaker 2: at what's really changing the global and then the South

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Speaker 2: African economy, optimistic on some scores, and I was looking

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Speaker 2: through his presentation today there does seem to be an

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Speaker 2: uptick in employment numbers for example. All of that's very important.

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Speaker 2: Still so much to do, but still got to get

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Speaker 2: things moving. We will speak to fly Saphia about the

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Speaker 2: fly safe deal. Do you to speak to doctor Guy

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Speaker 2: Leach about it as well? And then do you remember

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Speaker 2: I remember so clearly the moment when I realized that Parkhurst,

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Speaker 2: which is not a million miles away from where I live,

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Speaker 2: was getting fiber. It was the first suburb in South

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Speaker 2: Africa to get fiber. Trust me, I get reminded of

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Speaker 2: this from time to time, and you suddenly realized there

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Speaker 2: was a way that you could This was twenty fifteen,

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Speaker 2: twenty sixteen, there about suddenly have streaming music and Netflix

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Speaker 2: at home for something that you could afford. Before that

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Speaker 2: wasn't really affordable. You'd have to sort of download it

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Speaker 2: at work or something. And the way we live now,

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Speaker 2: so much of that is defined by what Rumor did

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Speaker 2: a decade ago. They've hit a million subscribers. So if

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Speaker 2: you look at how many devices are on each of

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Speaker 2: those Wi Fi terminals, I mean, just an average home

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Speaker 2: with one teenager, you're probably looking at about fifteen. Never

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Speaker 2: mind the amount of data that goes through it, and

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Speaker 2: never mind all the other people who walk through your

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Speaker 2: house that use the data while they're there without even noticing.

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Speaker 2: And that's how it's supposed to work. That's what makes

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Speaker 2: it so sort of wonderful. We'll talk a little bit

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Speaker 2: about that after seven o'clock. What was the first thing

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Speaker 2: you did when you got fiber? How did it change

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Speaker 2: your life? Was it music? Was it was what you

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Speaker 2: were streaming? Was it something else maybe I hadn't even

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Speaker 2: thought of. Maybe made you productive in a way you'd

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Speaker 2: never dreamt of before. Double one, double A three oh

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Speaker 2: seven O two two one four four six, five six seven.

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Speaker 2: I'm aware of the irony of this when I say

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Speaker 2: seven two seven oh two one seven oh two on

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Speaker 2: WhatsApp as you use your fiber descented to me. So

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Speaker 2: good to hear from you. Tonight, thirteen after six, The

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Speaker 2: Lonly Show.

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Speaker 3: With Stephen krutis live on ninety two point seven and

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Speaker 3: one six FM, streaming on the Prime Media Plus.

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Speaker 4: NAP and DStv channel eight five six.

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Speaker 2: Well the mining and Darbor in the second day, and

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Speaker 2: of course any conversation about mining in South Africa will

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Speaker 2: eventually get down to the question of logistics. Anyone who

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Speaker 2: wants to mind something that's under the ground needs to

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Speaker 2: get them on trains, onto ships, into factories and eventually

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Speaker 2: into your phone or bicycle or router, pram whatever it is,

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Speaker 2: which means we need to see how the logistics chain

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Speaker 2: is improving. The chair of Tran is doctor and Les Sano,

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Speaker 2: and of course he's at the Endaba and Dela. Good evening,

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Speaker 2: Good to chat to you again, and I really do

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Speaker 2: appreciate the time. Thank you. You've been a big part

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Speaker 2: of the stabilization of trans Net. Trans Net looks more reliable.

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Speaker 2: We can see the railway volumes increasing, we can see

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Speaker 2: some of the volumes of the docks increasing. How is

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Speaker 2: that process going? Do you believe that you've kind of

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Speaker 2: righted the ship? So to speak?

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Speaker 5: Good evening seven, and it's really wonderful to be on

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Speaker 5: your show. Just to answer your question, I think that

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Speaker 5: we've made very good progress in terms of stabilizing their ship,

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Speaker 5: as it were, but ensuring that we do that in

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Speaker 5: a manner in which it is sustainable, and also making

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Speaker 5: sure that the momentum that has been built is even

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Speaker 5: though it might have still fallen short of what the

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Speaker 5: customers expect or want. But we think that if you

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Speaker 5: look at the trajectory, it's promising and that tends to

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Speaker 5: be unpacked. In terms of the various elements of our business.

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Speaker 5: For example, we start with the ports. You would recall

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Speaker 5: that in November twenty twenty three we had a congestion

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Speaker 5: in terms of our ports where we must have had

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Speaker 5: over twenty to thirty vessels that we're ready to be

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Speaker 5: uploaded in terms of the goods that were bringing into

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Speaker 5: our country, but because of the state and the condition

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Speaker 5: of our own infrastructure, we were not able to do

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Speaker 5: that expeditiously and efficiently. I'm happy to say that since then,

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Speaker 5: we even if we were to go to either Devon

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Speaker 5: or Capta, there's been significant improvements. And that has been

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Speaker 5: achieved on the back of strong collaboration with our customers,

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Speaker 5: with industry players, with our employees, and that's really on

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Speaker 5: the back of that we've been able to register and

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Speaker 5: embedge the kind of turnaround that you see. Similarly, if

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Speaker 5: you look at our rail program, we've been able to

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Speaker 5: improve the tonnage that we've been transporting. If you start

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Speaker 5: tracking where we were in twenty twenty three and where

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Speaker 5: we are now, there's significant improvements in.

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Speaker 2: Terms of that.

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Speaker 5: At the same time we've been also embarking on structural reforms.

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Speaker 5: I do think that even though we may not be

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Speaker 5: where we would like to be, but I think the

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Speaker 5: kind of crisis that we had in twenty twenty three,

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Speaker 5: it has been a vetted. The business is now stable,

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Speaker 5: and the business is now well positioned and well poised

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Speaker 5: to be able to support the program of economic recovery

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Speaker 5: of the country. And we are pleased, we are pleased

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Speaker 5: to be part of those kind of forward looking conversations

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Speaker 5: about what is in stall for the economy of South Africa.

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Speaker 2: Well, I mean it does give you a moment to

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Speaker 2: kind of plan the transmit of ten years from now

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Speaker 2: or twenty years from now, perhaps more accurately. I mean,

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Speaker 2: these are things that you need to sit down and

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Speaker 2: work out. You know, what are we going to mine

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Speaker 2: in a quad Zulun hotel the northern Cape? Where do

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Speaker 2: we need there? I say, another railway line? Where do

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Speaker 2: I need to make sure that this particular railway line

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Speaker 2: is upgraded for whatever minerals we think are going to

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Speaker 2: be in a particular place. I mean there's a lot

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Speaker 2: of thinking to do.

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Speaker 5: Well, absolutely, and I must say we stand ready to

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Speaker 5: have those conversation with the rest of the industry players.

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Speaker 5: And for example, you were to invite us as Transmit

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Speaker 5: into that conversation two years ago, we'll not have been ready,

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Speaker 5: willing or prepared to have that conversation because our first

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Speaker 5: order of business was to stabilize the business, which we

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Speaker 5: have now done. Incidentally, I mean I must say that

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Speaker 5: even in the midst of the crisis, we have been

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Speaker 5: quite forwardlooking in terms of some of the steps that

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Speaker 5: we have taken to start thinking about the future differently.

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Speaker 5: Let me give you a couple of touch points. The

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Speaker 5: first one is that last year we signed an agreement

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Speaker 5: with a Vallpak and Zululand Energy Terminals in Richard's Bay

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Speaker 5: to construct and build a LMG guest terminal that will

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Speaker 5: then in years to come run about twenty twenty nine

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Speaker 5: twenty thirty, will then be able to bring into South

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Speaker 5: Africa the new sources of energy that really talks to

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Speaker 5: the decarbonization gender so inspired. Despite the crisis that we've

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Speaker 5: been working through, we have, you know, with one eye,

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Speaker 5: been looking deep into the future and embracing the kind

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Speaker 5: of a green energy agenda. So that's the first proof

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Speaker 5: point I want to talk to specifically. The second one

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Speaker 5: is that as of the fest of January twenty twenty six,

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Speaker 5: the Debon Container Terminal PEER two in Devon is now

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Speaker 5: privately operated. It is still owned by government.

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Speaker 6: We are in.

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Speaker 5: Partnership with the private sector to inject capital to modernize

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Speaker 5: you know, the infrastructure in the port, to bring in

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Speaker 5: new technologies, to also bring in new global best practice.

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Speaker 5: I think that positions the country well in terms of competitiveness,

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Speaker 5: you know, in terms of saying to investors in terms

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Speaker 5: of giving certainty, also in terms of saying that we

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Speaker 5: are ready to do business. Of course, because we have

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Speaker 5: a number of business segments within one entity, we may

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Speaker 5: not be moving, you know, at the same speed and pace.

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Speaker 5: But all I want to say is that our commitment

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Speaker 5: and our resolves to move forward in terms of driving

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Speaker 5: all of these critical conversations around strategic minerals and planning

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Speaker 5: together for the kind of future possibilities and opportunities that

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Speaker 5: you know are available to the country.

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Speaker 2: Doctor Angela Sancoe, thanks so much, the chair at Trance NETS.

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Speaker 2: We are lots of progress. I think that's undeniable. The

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Speaker 2: question is where do we go from here? And lots

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Speaker 2: of thinking to be done about that. Twenty minutes after six.

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Speaker 4: The Money Show with Stephen on seven o two seven

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Speaker 4: o two.

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Speaker 2: Release today of the twenty twenty six Outlook for both

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Speaker 2: the global economy and our Economy by Standard Bank. The

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Speaker 2: chief economist there is Gulham Balum Gulham, good evening. I mean,

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Speaker 2: before we start on our economy and I hate to start, yeah,

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Speaker 2: but we do need to understand what's happening in the

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Speaker 2: US because so much of that is quite variable and

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Speaker 2: it still has such a big impact.

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Speaker 7: Stephen, Hi, thanks for having me, And you're perfectly correct

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Speaker 7: in the sense that we take Q from the US.

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Speaker 7: We've always taken Q from the US, whether it is

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Speaker 7: with the direction of its financial markets or the federal

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Speaker 7: reserves interest rates. Now, of course we're taking Q from

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Speaker 7: the US with respect to geopolitics, and we know it

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Speaker 7: is at the core of decision making. Geopolitics now is

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Speaker 7: not more background risk. It is at the core of

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Speaker 7: influencing economic outcomes and financial outcomes. And Donald Trump, as

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Speaker 7: we know, over the last year especially, has accelerated this

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Speaker 7: muscular diplomacy, the sense where rules institutions in multilateralism have

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Speaker 7: eroded and it's been replaced by leah I say, power

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Speaker 7: and coersion.

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Speaker 2: I mean, if you look at the outlook for our economy,

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Speaker 2: you lists quite a few things that have been going right,

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Speaker 2: and some of them we've been talking about the gray

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Speaker 2: list and the upgrade and all of that sort of thing.

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Speaker 2: I haven't quite realized how many more people are employed

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Speaker 2: now than were before the pandemic of all that was important,

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Speaker 2: but we still have so many problems. You point to

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Speaker 2: the number of protests we have on a regular basis.

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Speaker 2: Our politics are still fracturing. I mean, it's a very

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Speaker 2: complex picture here.

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Speaker 7: See then you're right again in highlighting this, because we

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Speaker 7: can celebrate what happens in the boardroom and it can

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Speaker 7: be jarring with what's happening on this So twenty five was,

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Speaker 7: as you rightly highlighted, a year of many milestones, many achievements,

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Speaker 7: and that can provide good legacy for twenty twenty six. However,

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Speaker 7: on the street there is deep dismay with public services,

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Speaker 7: generally dismay at an incapacitated state, and a slow pace

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Speaker 7: of job creation on the back of so fast to

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Speaker 7: a teper economy. I think what we highlighting when we

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Speaker 7: say something like twenty twenty six off is the best year,

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Speaker 7: the best prospects, the best potential in a decade. What

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Speaker 7: we're saying is that the reform agenda seems to have

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Speaker 7: anchored neatly and is continuing to galvanize and hopefully around

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Speaker 7: water the weight organized around electricity and logistics. And we

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Speaker 7: also are recognizing that the macroeconomic cycle, meaning the pace

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Speaker 7: of real wage growth, employment growth, credit conditions in the market,

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Speaker 7: and the buoyant stock market all coe leads to suggest

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Speaker 7: that there's a good thrust behind consumer spending, which, as

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Speaker 7: you know Stephen a Council about two thirds of GDP. Also,

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Speaker 7: fixed investment we think is going to accelerate this year

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Speaker 7: after contracting over the last two years. So those are

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Speaker 7: cyclical developments that are positive. However, it's typical get politics

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Speaker 7: bed devils a South Africa outlook. We have local government

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Speaker 7: elections at the end of this year, maybe early twenty

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Speaker 7: twenty seven when the window allows, but irrespective, within the

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Speaker 7: year we're going to have local government elections which is

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Speaker 7: going to again reshape the coalition dynamics at a local level.

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Speaker 2: We might I think another upgrade or through this year.

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Speaker 2: How important are those in the big scheme of things

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Speaker 2: nowadays when there's so many other factors.

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Speaker 7: Steve and I would say the upgrades are plausible, perhaps

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Speaker 7: within a two year horizon and necessarily over the next

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Speaker 7: twelve months. Sovereign gratings can be considered to be a

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Speaker 7: confidence report card. They effectively signal confidence in a nation's

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Speaker 7: broad policy environment, with emphasis on public finance management. So

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Speaker 7: further ratings upgrades would imply that there is confidence in

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Speaker 7: the way public finances are being managed and that the

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Speaker 7: growth outlook is garnering momentum with all the positive socio

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Speaker 7: economic benefits that come with it, so upgrades and endorsement

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Speaker 7: and in a sense a confidence signal in policy choices

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Speaker 7: and economic direction. If we were to get further upgrades,

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Speaker 7: of course we will be clawing back the substantial descent

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Speaker 7: over the last decade. But nonetheless, growth is an incremental concept,

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Speaker 7: and ratings upgrades affirm that is positive incrementalism.

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Speaker 2: You predict some growth next year, and then by twenty

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Speaker 2: twenty eight you're still only looking at two point one percent,

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Speaker 2: And I mean, if you consider the need, that's quite

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Speaker 2: a low number. That really underscores the difficulty of the situation. Yes,

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Speaker 2: things are better, Yes things are moving around, are moving

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Speaker 2: in the right direction, but the sort of scale of it,

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Speaker 2: the complexity of it, the number number of things that

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Speaker 2: all need to work together, I mean, at two point

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Speaker 2: one percent is a real reminder.

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Speaker 7: Of that, Stephen. We're looking for the elements that is

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Speaker 7: going to give us the escape velocity to break out

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Speaker 7: of a say one to two percent band, which seems

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Speaker 7: favorable when you consider just the other year we were

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Speaker 7: growing at half a percent. So what takes us to

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Speaker 7: this escape velocity and into three percent and beyond and

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Speaker 7: my sense it is over arching governance. Alternatively put the

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Speaker 7: rule of law. If the President were to harness the

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Speaker 7: ZiT guist of the moment, his sona, the State of

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Speaker 7: the Nation address must focus, in my view, on two things,

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Speaker 7: how we are going to remedy the incapacitated state with

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Speaker 7: emphasis on municipalities and metros. That would be the first item.

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Speaker 7: And second item is to deal with the s de

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Speaker 7: penetrating web of criminalization that is invested in South African

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Speaker 7: civilian life and certainly the authorities. If he is able

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Speaker 7: to show resolve out of let's say the triggers coming

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Speaker 7: out of the Midlanga Commission and the parliamentary inquiry, I

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Speaker 7: think those interventions can provide the confidence that is needed

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Speaker 7: for us to get to a higher growth plane where

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Speaker 7: businesses believe the reform agenda is now leaning into these

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Speaker 7: critical new areas of resolution.

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Speaker 2: Gulham, thanks so much for the thoughts. Ready to appreciate it.

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Speaker 2: Gulam Balum is the chief economist at the Standard Bank Group.

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Speaker 8: The Money Show.

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Speaker 2: Marco Staffio is at abs c IRB, a lead specialist

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Speaker 2: for investment and trading sales market. Good evening, it feels

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Speaker 2: like September, but happy New Year. Last night after trading

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Speaker 2: closed on the JAC if we can pay at a

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Speaker 2: trading update, I mean, they said their losses would increase

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Speaker 2: by twenty percent. Obviously it was going to be bad

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Speaker 2: this morning, but it was fifteen percent down at one point.

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Speaker 9: Yes, Stephen, thanks very much, ending down nine point nine percent,

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Speaker 9: so you know, not far off that start at minus fifteen.

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Speaker 9: I think what really disappointed the market, you know, was

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Speaker 9: the fact that we saw such a sharp slow down

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Speaker 9: in life like sales. You know, if they had four

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Speaker 9: point three percent in the first half down to zero

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Speaker 9: point nine percent in the latter twenty two weeks of

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Speaker 9: their reporting period.

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Speaker 2: And I mean the market I think just isn't buying

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Speaker 2: the kind of recovery story, are they, And if you

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Speaker 2: consider the competition there up against, that's not a surprise,

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Speaker 2: absolutely right.

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Speaker 9: So I mean generally across the competition, we're seeing very

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Speaker 9: low price inflation coming through, and that's generally bad for

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Speaker 9: food retailers. Pick and Pay surprisingly had slightly higher internalflation

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Speaker 9: than those piers, which makes that top line number even worse,

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Speaker 9: I would say, And I think that's exactly what you're

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Speaker 9: saying that the market not quite buying that turnaround story

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Speaker 9: that they were hoping for in the first half.

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Speaker 2: You've got to take on shop, right, who's in store?

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Speaker 2: Inflation is about pointy seven percent, I mean, very very

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Speaker 2: difficult to do the rand. I mean, is it just

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Speaker 2: me or is a little bit of volatility leaving some

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Speaker 2: of the markets that gold seems to be stable. I'm

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Speaker 2: going to put a huge ish onto that, just about

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Speaker 2: five thousand the rand, just below sixteen to the dollar.

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Speaker 9: Stephen, I think we had a big washout a couple

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Speaker 9: of weeks ago, and it seemed like a lot of

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Speaker 9: those speculative positions got taken out of the market. So

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Speaker 9: we back to more fundamental levels, central bank remaining there

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Speaker 9: in gold, you know, lots of people continuing to look

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Speaker 9: at emassets as a place to invest in the longer term.

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Speaker 9: So I think you're exactly right. We are seeing you know,

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Speaker 9: a little bit more stability arise, you know, around strength

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Speaker 9: to say, you know, driven by some dollar weakness, but look,

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Speaker 9: fundamentals in the country looking pretty decent.

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Speaker 2: I mean, difficult to know where to buy currencies at

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Speaker 2: the moment, but the outlook for the rant is better

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Speaker 2: than it's been for a very long time. If gold

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Speaker 2: stays where it is, all of those things help us

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Speaker 2: as well. And if you go back sort of where

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Speaker 2: people were making predictions a year ago, they're all wrong. Absolutely.

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Speaker 9: I mean, I would say our strategist has got a

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Speaker 9: little bit more cautious on the rand at these sort

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Speaker 9: of levels. Looking at some of those you know, valuation metrics,

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Speaker 9: it looks a little bit overvalued compared to where we

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Speaker 9: were about a year ago. And also ultimately positioning is

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Speaker 9: quite stretched.

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Speaker 8: At this point.

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Speaker 9: You are quite a lot of investors sitting in South

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Speaker 9: African bonds and the rand.

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Speaker 2: Marco thanks very much. Indeed, Marco Pafio is the lead

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Speaker 2: specialist for Investment and Trading sales at Absolute cib What.

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Speaker 4: Apps Stephen on seven to two, seven oh two one

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Speaker 4: seven o two, looking.

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Speaker 2: Forward to your voice notes about how fiber changed your

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Speaker 2: life at home. So many people I think, just having

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Speaker 2: those memories of when it arrived where you lived for

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Speaker 2: the first time. So many more people still waiting for it.

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Speaker 2: But you do find fiber in many, many different parts

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Speaker 2: of the country. Lots of financial models. We talk more

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Speaker 2: about it in about half an hour. I see that

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Speaker 2: the business rescue practitioners at the Post Office sort of

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Speaker 2: making the point that they still need money from national government.

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Speaker 2: They were, as I understand it, before the Communications Committee

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Speaker 2: in Parliament. The Communications Committee wants to meet the Finance Minister.

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Speaker 2: I have a sneaking suspicion everyone wants to meet the

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Speaker 2: Finance minister before the budget. They'll be asking for more money.

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Speaker 2: Three point eight billion rand is what the Post Office needs,

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Speaker 2: and the business rescue practitioner is suggesting that if it

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Speaker 2: doesn't come, they left to shut up shop. I do

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Speaker 2: think they said this last year. I do think though,

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Speaker 2: at the same time, that one of the worst things

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Speaker 2: that can happen, and it happens so often, not just here,

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Speaker 2: not just to government institutions, but no one has prepared

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Speaker 2: to either do what it's required to save it or

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Speaker 2: put it out of its misery. Whatever kind of institution

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Speaker 2: it is. The Post Office might be an example of that,

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Speaker 2: and just goes on and on and on. Costs a

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Speaker 2: huge amount of money, never rarely gets fixed until something

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Speaker 2: dramatic happens and then it just goes So if you're

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Speaker 2: going to make a decision to save it, save it.

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Speaker 2: If you're not, make the decision not to and work

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Speaker 2: it out from there but sort of leaving it hanging around,

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Speaker 2: I mean, the poor workers for a start, can you imagine,

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Speaker 2: but also just get on with it. Make a decision

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Speaker 2: would be my suggestion. Seven two seven two one seven

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Speaker 2: two The Lonely.

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Speaker 3: Show with Stephen Kruders Live on ninety two point seven

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Speaker 3: and one o six FM, streaming on the Prime Media Plus.

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Speaker 4: NAP and DStv channel eight five six.

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Speaker 2: Seventeen minutes now to seven today at that time, well,

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Speaker 2: obviously the big story today is around the aviation industry,

435
00:24:28,080 --> 00:24:31,880
Speaker 2: Hareth General Partners confirming they're buying fly Safair. We don't

436
00:24:31,920 --> 00:24:34,720
Speaker 2: yet know the cost of the deal. Hareath has been

437
00:24:34,840 --> 00:24:38,040
Speaker 2: interested in the aviation sector for some time. There was

438
00:24:38,080 --> 00:24:40,399
Speaker 2: the SAA deal that didn't happen. They also own a

439
00:24:40,400 --> 00:24:45,080
Speaker 2: big chunk of Lansia Airport. Kirby Gordon is the chief

440
00:24:45,119 --> 00:24:49,480
Speaker 2: marketing officer at fly Asafair. Of fly Safair, I should say, Kirby,

441
00:24:49,880 --> 00:24:54,080
Speaker 2: good evening your current owner's asl aviation holdings from what

442
00:24:54,119 --> 00:24:56,680
Speaker 2: do you know? I mean, I imagine this is a

443
00:24:56,720 --> 00:24:59,000
Speaker 2: decision made in a different room to where you work

444
00:24:59,040 --> 00:25:02,720
Speaker 2: every day. What made them agree to this deal with Perith?

445
00:25:02,760 --> 00:25:04,400
Speaker 2: Why did they decide to sell now.

446
00:25:05,640 --> 00:25:08,399
Speaker 10: Stiman, you are actually the opportunity asl and the trust

447
00:25:08,440 --> 00:25:10,960
Speaker 10: and of course the local bee shareholder that are involved

448
00:25:11,000 --> 00:25:14,720
Speaker 10: in Flysafare actually didn't decide to sell now. The transaction

449
00:25:14,840 --> 00:25:17,119
Speaker 10: is something that's been in the works for quite a while.

450
00:25:17,600 --> 00:25:20,080
Speaker 10: If one or call back as far as twenty nineteen,

451
00:25:20,400 --> 00:25:22,960
Speaker 10: there was a proposed deal that didn't go ahead between

452
00:25:23,119 --> 00:25:26,399
Speaker 10: Flysafare and Airlink, which was already an indication of the

453
00:25:26,400 --> 00:25:30,280
Speaker 10: intention of the shareholders to exit the asset that that

454
00:25:30,320 --> 00:25:33,840
Speaker 10: they had created. Obviously, as seed investors that used a

455
00:25:33,880 --> 00:25:36,480
Speaker 10: certain amount of money to develop the airline had created

456
00:25:36,520 --> 00:25:38,800
Speaker 10: an asset of value and I guess to their benefit

457
00:25:38,880 --> 00:25:42,560
Speaker 10: that increased in value quite considerably through COVID, and they

458
00:25:42,840 --> 00:25:45,399
Speaker 10: just took some time to find a good buyer locally,

459
00:25:45,440 --> 00:25:47,359
Speaker 10: and unfortunately they now have done that.

460
00:25:47,880 --> 00:25:50,080
Speaker 2: I mean, it's been very profitable, hasn't.

461
00:25:49,760 --> 00:25:52,520
Speaker 6: It It has.

462
00:25:52,640 --> 00:25:55,560
Speaker 10: Yes, we've had a good run and long may that last.

463
00:25:55,960 --> 00:25:58,200
Speaker 10: So that is obviously, I think part of the attraction

464
00:25:58,359 --> 00:26:01,080
Speaker 10: to the new investors is the idea that they've got

465
00:26:01,080 --> 00:26:03,399
Speaker 10: this asset of value that hopefully will continue to deliver

466
00:26:03,720 --> 00:26:05,040
Speaker 10: against a solid track record.

467
00:26:05,840 --> 00:26:08,640
Speaker 2: I mean, I'm interested that someone would sell an investment

468
00:26:08,680 --> 00:26:10,760
Speaker 2: that's beginning to pay back and beginning to pay back

469
00:26:10,840 --> 00:26:13,840
Speaker 2: quite handsomely. It's making a profit. Why not keep it?

470
00:26:15,840 --> 00:26:18,280
Speaker 10: Yeah, I think different investors have different stories and have

471
00:26:18,320 --> 00:26:20,919
Speaker 10: different approaches that they want to be involved in. So

472
00:26:21,200 --> 00:26:23,679
Speaker 10: the reality is those investors had capital tied up in

473
00:26:23,720 --> 00:26:25,960
Speaker 10: the CENTERITEE and had a certain objective that they sort

474
00:26:26,000 --> 00:26:28,320
Speaker 10: to achieve. They achieved it over the period of time

475
00:26:28,359 --> 00:26:30,440
Speaker 10: that they sought to do, so it was then time

476
00:26:30,480 --> 00:26:31,960
Speaker 10: to liberate their capital and move.

477
00:26:31,840 --> 00:26:34,679
Speaker 6: Off to other ventures. And equally, it was probably time in.

478
00:26:35,080 --> 00:26:37,880
Speaker 10: The lifespan of the airline to find a value investor

479
00:26:37,920 --> 00:26:40,720
Speaker 10: and a portfolio in which to reside. So somebody that

480
00:26:40,840 --> 00:26:43,080
Speaker 10: was looking to put some patient capital into the airline

481
00:26:43,080 --> 00:26:45,239
Speaker 10: for a long period of time and to see us

482
00:26:45,280 --> 00:26:46,000
Speaker 10: over the long run.

483
00:26:46,640 --> 00:26:48,760
Speaker 2: So I accept all of that, and I realized there's

484
00:26:48,800 --> 00:26:51,640
Speaker 2: been talks about this for some time. I do need

485
00:26:51,640 --> 00:26:54,440
Speaker 2: to ask though the findings yes last year by first

486
00:26:54,840 --> 00:26:58,480
Speaker 2: by the domestic and the international Aviation councils that fly

487
00:26:58,560 --> 00:27:02,280
Speaker 2: cepher was operating illegally because they deemed the way in

488
00:27:02,320 --> 00:27:05,720
Speaker 2: which the shareholding is structured do not meet the requirement

489
00:27:05,720 --> 00:27:07,800
Speaker 2: that it would be seventy five percent owned by South

490
00:27:07,800 --> 00:27:10,280
Speaker 2: Africans as far as you know, was that a factor

491
00:27:10,280 --> 00:27:11,000
Speaker 2: in this decision?

492
00:27:12,920 --> 00:27:14,800
Speaker 10: And that's a very valid question to ask, Steven, and

493
00:27:14,800 --> 00:27:16,600
Speaker 10: I think a very logical conclusion to come into.

494
00:27:16,680 --> 00:27:17,040
Speaker 6: It.

495
00:27:17,080 --> 00:27:19,600
Speaker 10: Looks certainly it was a factor in the discussions as

496
00:27:19,640 --> 00:27:22,639
Speaker 10: they're commenced, which we're already underway. It would be naive

497
00:27:22,720 --> 00:27:25,720
Speaker 10: to say that it wasn't. The reality is that that

498
00:27:25,800 --> 00:27:28,080
Speaker 10: question was really never a round ownership. That was a

499
00:27:28,160 --> 00:27:30,679
Speaker 10: question that was more to do with control, and it

500
00:27:30,720 --> 00:27:32,719
Speaker 10: is still a matter that is under court review at

501
00:27:32,720 --> 00:27:35,919
Speaker 10: this stage. The new setup, we hope and we trust,

502
00:27:36,080 --> 00:27:38,840
Speaker 10: is one that will be something that the councils will

503
00:27:38,920 --> 00:27:42,760
Speaker 10: ultimately agree to and find to their pleasing. Although the

504
00:27:42,760 --> 00:27:45,879
Speaker 10: reality is that this is not an automatic remedy to

505
00:27:45,920 --> 00:27:46,560
Speaker 10: that situation.

506
00:27:46,600 --> 00:27:47,800
Speaker 8: They're still a process that has.

507
00:27:47,720 --> 00:27:51,240
Speaker 10: To walk out and that's one of the key approvals

508
00:27:51,240 --> 00:27:53,240
Speaker 10: that needs to be achieved in order for this transaction

509
00:27:53,320 --> 00:27:56,000
Speaker 10: to proceed is approval a boy both the Air Services

510
00:27:56,040 --> 00:27:59,239
Speaker 10: Licensing Council, the International Air Services Licensing Council, and then

511
00:27:59,320 --> 00:28:01,520
Speaker 10: under standard letters like the Competition Commission.

512
00:28:01,520 --> 00:28:03,760
Speaker 2: Of course, yeah, I mean, obviously there'll be all of that.

513
00:28:04,760 --> 00:28:07,640
Speaker 2: The management and the airline. From what I read, it's

514
00:28:07,680 --> 00:28:11,439
Speaker 2: going to stay in places that you're understanding. Was there

515
00:28:11,480 --> 00:28:14,600
Speaker 2: an email to all staff Kirby that everyone's staying where

516
00:28:14,640 --> 00:28:15,000
Speaker 2: they are?

517
00:28:17,400 --> 00:28:18,639
Speaker 6: Yes, absolutely No.

518
00:28:18,720 --> 00:28:21,040
Speaker 10: I think Hereth have been very very intentional about that

519
00:28:21,080 --> 00:28:23,720
Speaker 10: in their discussions around it. I think to your point earlier,

520
00:28:23,760 --> 00:28:25,439
Speaker 10: you know that there is an asset of value that

521
00:28:25,440 --> 00:28:28,880
Speaker 10: has been built, and that is something that they've conceded

522
00:28:28,880 --> 00:28:31,040
Speaker 10: and something that they want to work toward. And so

523
00:28:31,080 --> 00:28:34,000
Speaker 10: the reality is they wanted to continue to deliver against

524
00:28:34,040 --> 00:28:36,680
Speaker 10: its track record, which of course there's no small feat

525
00:28:36,720 --> 00:28:39,880
Speaker 10: for the existing management and leadership to continue along that path.

526
00:28:40,560 --> 00:28:42,240
Speaker 10: But that is very much what they have put in

527
00:28:42,280 --> 00:28:44,240
Speaker 10: place and we hold them to it.

528
00:28:44,720 --> 00:28:48,280
Speaker 2: Do you believe at this stage there's still much scope

529
00:28:48,280 --> 00:28:50,400
Speaker 2: for growth? I say that because you're about sixty seven

530
00:28:50,440 --> 00:28:55,240
Speaker 2: percent of the domestic market. SAA is doing what it's doing.

531
00:28:55,240 --> 00:28:57,480
Speaker 2: It seems to be recovering quite nicely from what I

532
00:28:57,520 --> 00:29:00,440
Speaker 2: can see. There are other players, there's air links lived,

533
00:29:01,160 --> 00:29:03,480
Speaker 2: but still at two thirds of the market, do you

534
00:29:03,480 --> 00:29:05,720
Speaker 2: think there's really that much more room for growth or

535
00:29:05,720 --> 00:29:08,320
Speaker 2: you're just going to have to hope the whole industry grows.

536
00:29:10,680 --> 00:29:12,520
Speaker 10: It is more of hoping that the whole industry grows.

537
00:29:12,560 --> 00:29:14,200
Speaker 10: I mean, I think if we reflect on the story,

538
00:29:14,200 --> 00:29:16,080
Speaker 10: the sort of hockey stick growth that we saw or

539
00:29:16,080 --> 00:29:18,360
Speaker 10: for the back of COVID was obviously due to you know,

540
00:29:18,440 --> 00:29:22,120
Speaker 10: actenuating circumstances, and that's not necessarily something that one would

541
00:29:22,120 --> 00:29:25,240
Speaker 10: find under the normal kind of guise of business on

542
00:29:25,280 --> 00:29:27,680
Speaker 10: a day to day basis. I think the growth of

543
00:29:27,760 --> 00:29:30,680
Speaker 10: airlines is really closely tracked against what we see in

544
00:29:30,800 --> 00:29:34,120
Speaker 10: terms of economic growth. Those two sort of factor really

545
00:29:34,120 --> 00:29:37,600
Speaker 10: well together, and we've especially essentially kind of factored in

546
00:29:37,640 --> 00:29:40,080
Speaker 10: our world that that means pretty much the addition of

547
00:29:40,080 --> 00:29:43,479
Speaker 10: an additional aircraft to our fleet every year as things go,

548
00:29:43,840 --> 00:29:45,720
Speaker 10: assuming that they continue to go to the way that

549
00:29:45,760 --> 00:29:48,160
Speaker 10: they have been going. So that's the sort of growth

550
00:29:48,160 --> 00:29:49,640
Speaker 10: that we're looking at. And then of course there are

551
00:29:49,640 --> 00:29:52,880
Speaker 10: the expansion opportunities outside of the domestic borders, looking at

552
00:29:52,880 --> 00:29:55,040
Speaker 10: some of those regional routes that are coming online and

553
00:29:55,080 --> 00:29:59,200
Speaker 10: that are thickening as they grow, and there's certainly opportunity

554
00:29:59,240 --> 00:30:01,400
Speaker 10: for us to spread our wings if you'l excuse the

555
00:30:01,440 --> 00:30:04,200
Speaker 10: pan a little further abroad and start to service those

556
00:30:04,240 --> 00:30:06,200
Speaker 10: markets with the low cost model as well.

557
00:30:06,360 --> 00:30:10,200
Speaker 2: Kirby Gordon, thanks so much, chief marketing officer at fly Safe. Well,

558
00:30:10,440 --> 00:30:13,280
Speaker 2: let's get the view from the aviation analyst, doctor Guy Leitch, Guy,

559
00:30:13,360 --> 00:30:16,040
Speaker 2: good evening. Does this deal make good business sense for

560
00:30:16,160 --> 00:30:19,440
Speaker 2: Hareth General Partners, I mean fly sappha has I think

561
00:30:19,480 --> 00:30:21,160
Speaker 2: we can all agree being quite profitable.

562
00:30:23,240 --> 00:30:26,719
Speaker 8: Yeah, Hi, Sepoh, nice to be with you. I'm afraid

563
00:30:26,760 --> 00:30:28,720
Speaker 8: I can't answer that question because we don't know how

564
00:30:28,800 --> 00:30:31,160
Speaker 8: much they've paid for it. We don't know what warrants

565
00:30:31,200 --> 00:30:34,400
Speaker 8: may they may have been given in terms of ongoing

566
00:30:34,880 --> 00:30:38,120
Speaker 8: profitability and so on. It would be really nice if

567
00:30:38,120 --> 00:30:41,960
Speaker 8: the pics the thirty percent shareholder in this or in

568
00:30:42,320 --> 00:30:45,640
Speaker 8: the Hearth Partners would be disclosed a sort of information.

569
00:30:46,280 --> 00:30:50,040
Speaker 8: It was called a value proposition. Yeah, when hopes that

570
00:30:50,080 --> 00:30:53,160
Speaker 8: they didn't overpay for the whole deal. But I have

571
00:30:53,240 --> 00:30:55,720
Speaker 8: to say that personally, I'm the more I look at it,

572
00:30:56,040 --> 00:30:58,360
Speaker 8: and you know, Kirby is very very convincing, But the

573
00:30:58,360 --> 00:31:00,360
Speaker 8: more I look at it, the more I can find

574
00:31:00,520 --> 00:31:02,680
Speaker 8: very little to recommend this deal at all.

575
00:31:03,320 --> 00:31:05,200
Speaker 2: Oh really, why is that?

576
00:31:07,760 --> 00:31:10,920
Speaker 8: Yeah? Well, I mean, let's face it, I mean, in face.

577
00:31:10,800 --> 00:31:15,680
Speaker 11: Value, it's really a massive disinvestment by the Irish holding Company,

578
00:31:15,720 --> 00:31:19,160
Speaker 11: regardless of how long they've been trying to maybe sell

579
00:31:19,200 --> 00:31:24,760
Speaker 11: the airline, there's a concomitant huge upload of capital.

580
00:31:24,800 --> 00:31:27,360
Speaker 8: You have to as you rightly asked, asked what the

581
00:31:29,440 --> 00:31:34,200
Speaker 8: Irish Shareholding Company's confidence was in South Africa. You know,

582
00:31:33,920 --> 00:31:37,840
Speaker 8: we're still struggling to get back to pre COVID levels

583
00:31:37,880 --> 00:31:40,800
Speaker 8: in terms of flying, and yet we should be thirty

584
00:31:40,840 --> 00:31:43,800
Speaker 8: thirty five percent ahead just in terms of the growth

585
00:31:43,800 --> 00:31:49,280
Speaker 8: that we've lost. So the potential for growth is really limited.

586
00:31:49,640 --> 00:31:52,720
Speaker 8: SA is a shadow of its former self still and

587
00:31:52,760 --> 00:31:57,280
Speaker 8: it is taking its time about growing back. There's real

588
00:31:57,360 --> 00:32:03,240
Speaker 8: worry about overriding control of this herathin and Kirby ensures

589
00:32:03,280 --> 00:32:07,280
Speaker 8: me that Herath will be strictly arms length and that

590
00:32:07,320 --> 00:32:10,480
Speaker 8: we don't have to worry about the PIC has been

591
00:32:10,520 --> 00:32:14,760
Speaker 8: a government controlled shareholder. Yeah, maybe maybe not. I'm not convinced.

592
00:32:14,960 --> 00:32:18,320
Speaker 8: The PIC holds thirty percent of HERAT, as I mentioned,

593
00:32:18,320 --> 00:32:20,880
Speaker 8: and with that they can pretty much call the shots

594
00:32:21,080 --> 00:32:23,760
Speaker 8: in most respects. So there's a real fear that this

595
00:32:23,920 --> 00:32:26,920
Speaker 8: is actually going to become a second state owned airline,

596
00:32:27,160 --> 00:32:31,080
Speaker 8: maybe not directly indirectly, but I certainly expect a lot

597
00:32:31,080 --> 00:32:37,520
Speaker 8: of opposition from the competition obviously from Airlink, Samra and LIFT.

598
00:32:37,800 --> 00:32:39,560
Speaker 8: I expect them to put up a big fight in

599
00:32:39,600 --> 00:32:40,800
Speaker 8: the competition commission.

600
00:32:41,160 --> 00:32:43,200
Speaker 2: Sure, I have to say I didn't see that coming.

601
00:32:44,360 --> 00:32:47,240
Speaker 2: The use of land Syria, I mean, Hareth owns a

602
00:32:47,240 --> 00:32:49,960
Speaker 2: big portion there pic too. I mean there must be

603
00:32:50,040 --> 00:32:53,040
Speaker 2: lots of linkages there. The idea that actually they can

604
00:32:53,080 --> 00:32:56,720
Speaker 2: work together quite nicely, you could rarely do maybe one

605
00:32:56,800 --> 00:32:59,040
Speaker 2: day kind of end to end all in the same

606
00:32:59,080 --> 00:33:00,960
Speaker 2: group be quite attractive.

607
00:33:02,840 --> 00:33:06,800
Speaker 8: Yeah, it's too attractive. The reality is that that I

608
00:33:06,800 --> 00:33:09,600
Speaker 8: think there should be a law and that the industry

609
00:33:09,640 --> 00:33:14,120
Speaker 8: is already over regulated, that airlines can't own airports because

610
00:33:14,240 --> 00:33:17,560
Speaker 8: airports are monopolies. I mean, let's let's look not forget

611
00:33:17,880 --> 00:33:21,520
Speaker 8: that ACCA made a profit over a billion rand last

612
00:33:21,560 --> 00:33:25,720
Speaker 8: year and seven hundred billion, sorry a million the year before.

613
00:33:26,400 --> 00:33:28,440
Speaker 8: It's a license to print money. And I made, in

614
00:33:28,480 --> 00:33:31,840
Speaker 8: fact a joke just last week to Proflemola that they

615
00:33:31,880 --> 00:33:34,800
Speaker 8: should buy Accea because that's where the where the money is.

616
00:33:35,200 --> 00:33:39,760
Speaker 8: But if if it suddenly means that there's pressure on

617
00:33:40,880 --> 00:33:44,200
Speaker 8: a fly sofare to fly into Lansyria more, because hey,

618
00:33:44,280 --> 00:33:47,400
Speaker 8: that's then Syria is struggling and Lanceyria let me note

619
00:33:47,480 --> 00:33:51,160
Speaker 8: is struggling. It's lost Mango and it's lost Kalila in

620
00:33:51,280 --> 00:33:53,720
Speaker 8: terms of passenger traffic. It's not going to get that

621
00:33:53,840 --> 00:33:56,840
Speaker 8: back anytime soon. So again it's it hasn't been a

622
00:33:56,840 --> 00:34:00,880
Speaker 8: good aviation investment for for Harris, and as I've liked

623
00:34:01,240 --> 00:34:04,480
Speaker 8: to comment, the aviation industry is a terrible industry to

624
00:34:04,600 --> 00:34:07,880
Speaker 8: invest in. I mean, Richard Benson is famous for saying

625
00:34:07,920 --> 00:34:12,160
Speaker 8: it's made more millionaires millionaires out of billionaires than any other.

626
00:34:12,280 --> 00:34:16,560
Speaker 8: It's a tough, tough industry, highly capital intensive, highly skills intensive,

627
00:34:16,600 --> 00:34:19,840
Speaker 8: and yet with various and margins. So I really hope

628
00:34:19,840 --> 00:34:23,759
Speaker 8: that ultimately the stateholder pension funds are not going to

629
00:34:23,760 --> 00:34:24,680
Speaker 8: be affected by this.

630
00:34:25,400 --> 00:34:30,560
Speaker 2: Sure looking forward though, an economy that seems to be growing,

631
00:34:30,640 --> 00:34:32,880
Speaker 2: that would lead to a lot more domestic travel. There

632
00:34:32,880 --> 00:34:35,480
Speaker 2: would be opportunities to go to other countries in the

633
00:34:35,520 --> 00:34:36,240
Speaker 2: region as well.

634
00:34:38,400 --> 00:34:42,719
Speaker 8: You know, yes, Kirby as well said correctly pointed out

635
00:34:42,920 --> 00:34:47,239
Speaker 8: that there's a strong correlation between airline growth and the

636
00:34:47,560 --> 00:34:50,440
Speaker 8: economic growth. Well, actually, we've seen that the so African

637
00:34:50,480 --> 00:34:55,399
Speaker 8: economy is pretty dull or stable if you like. It's

638
00:34:55,440 --> 00:34:57,560
Speaker 8: not really growing at the rate it should. And what

639
00:34:57,560 --> 00:35:01,400
Speaker 8: we're seeing even worse is that with the COVID loss,

640
00:35:01,840 --> 00:35:04,279
Speaker 8: particularly of s a A, where we've lost a lot

641
00:35:04,280 --> 00:35:07,400
Speaker 8: of the long haul carriers that came into South Africa. Sorry,

642
00:35:07,520 --> 00:35:11,960
Speaker 8: we lost sia's long haul roots and long haul carriers

643
00:35:12,000 --> 00:35:14,920
Speaker 8: have come in, but they're doing code shares with with

644
00:35:14,920 --> 00:35:18,319
Speaker 8: with many other airlines and the role for Sfair to

645
00:35:18,719 --> 00:35:21,960
Speaker 8: so called feed and defeed the major hubs is not

646
00:35:22,120 --> 00:35:25,279
Speaker 8: what it used to be. So that's why air has

647
00:35:25,320 --> 00:35:29,600
Speaker 8: been looking to expand regionally, you know, and become a

648
00:35:29,640 --> 00:35:32,600
Speaker 8: carrier right across Southern Africa that is still where the

649
00:35:32,640 --> 00:35:35,160
Speaker 8: growth lies. But then they're taking on stuff in very

650
00:35:35,160 --> 00:35:39,320
Speaker 8: competent competition in the form of Airlink and Samer who've

651
00:35:39,320 --> 00:35:41,280
Speaker 8: already done a lot in this market.

652
00:35:41,760 --> 00:35:44,359
Speaker 2: Doctor Guileach, thanks very much indeed the aviation and has

653
00:35:44,440 --> 00:35:48,800
Speaker 2: ready to appreciate the time well different views of course

654
00:35:49,000 --> 00:35:52,239
Speaker 2: on the same deal. Optimistic that we'll actually speak to

655
00:35:52,320 --> 00:35:56,120
Speaker 2: Hareth tomorrow and get their understanding and just sort of

656
00:35:56,200 --> 00:36:01,439
Speaker 2: explain the rasianale behind the deal. Certainly it seems there's

657
00:36:01,560 --> 00:36:04,120
Speaker 2: a lot to talk about within it. It also gets

658
00:36:04,120 --> 00:36:07,400
Speaker 2: the sense that aviation is changing quite fundamentally. I'm very

659
00:36:07,400 --> 00:36:09,400
Speaker 2: interested in the kind of linkages that we could be

660
00:36:09,440 --> 00:36:11,000
Speaker 2: looking at four minutes now to seven.

661
00:36:12,800 --> 00:36:15,439
Speaker 12: The Money Show, Steven Rogers, is brought to you by

662
00:36:15,480 --> 00:36:20,600
Speaker 12: Absolve corporate and investment backing balancing economic growth with ecosystems.

663
00:36:20,880 --> 00:36:23,560
Speaker 12: That's how they've invested in your story.

664
00:36:24,640 --> 00:36:26,960
Speaker 2: Well, voice notes coming through this evening on seven two

665
00:36:27,000 --> 00:36:28,560
Speaker 2: seven two one seven o two.

666
00:36:30,120 --> 00:36:33,680
Speaker 13: Hi, Stephen, I'm hearing your guests talking about how the

667
00:36:33,719 --> 00:36:38,360
Speaker 13: airlines have not recovered from covid era. But one of

668
00:36:38,400 --> 00:36:42,880
Speaker 13: the biggest contributors is the tickets. The ticket prices is

669
00:36:42,960 --> 00:36:47,239
Speaker 13: just too expensive. Like now, I was trying to see

670
00:36:47,239 --> 00:36:50,560
Speaker 13: where I can be able to fly to Kimberly but

671
00:36:51,520 --> 00:36:55,600
Speaker 13: Way in April, but looks like I cannot afford to.

672
00:36:57,840 --> 00:37:00,880
Speaker 13: I remember some routes you could get a ticket for

673
00:37:01,840 --> 00:37:09,240
Speaker 13: maybe two thousand. Now those routes minimum is four thousand, which, yeah,

674
00:37:09,280 --> 00:37:11,520
Speaker 13: so I think they're shooting themselves in the foot by

675
00:37:12,239 --> 00:37:17,600
Speaker 13: having the cost of the tickets being too high.

676
00:37:17,920 --> 00:37:18,120
Speaker 8: Yeah.

677
00:37:19,360 --> 00:37:21,799
Speaker 2: Yeah, It's interesting to see how difficult the problem is

678
00:37:21,960 --> 00:37:25,360
Speaker 2: when you talk about thin margins in that industry, you

679
00:37:25,520 --> 00:37:28,359
Speaker 2: try to sort of make money out of it and

680
00:37:28,640 --> 00:37:32,399
Speaker 2: that it is corrected across the industry. Margins are actually quite thin,

681
00:37:33,200 --> 00:37:36,000
Speaker 2: so there isn't much space to cut costs. The other thing,

682
00:37:36,040 --> 00:37:38,759
Speaker 2: of course, just to notice that flying is expensive, which

683
00:37:38,800 --> 00:37:41,360
Speaker 2: is why most people who do fly, most of us

684
00:37:41,360 --> 00:37:44,160
Speaker 2: who do fly flying for work. You do fly for

685
00:37:44,239 --> 00:37:46,800
Speaker 2: holidays of course from time to time, but you manage

686
00:37:46,840 --> 00:37:49,799
Speaker 2: that very very carefully. Your thoughts and looking forward to

687
00:37:49,800 --> 00:37:53,920
Speaker 2: that conversation coming up in a moment Boomer and a

688
00:37:54,080 --> 00:37:58,320
Speaker 2: million now subscribers to their fiber service. I do remember

689
00:37:58,600 --> 00:38:01,799
Speaker 2: with some excitement that change in the financial model, how

690
00:38:01,880 --> 00:38:06,239
Speaker 2: communities were consulted. How would you like your cable underground

691
00:38:06,760 --> 00:38:08,840
Speaker 2: or would you prefer it on polls, which was quicker

692
00:38:08,880 --> 00:38:12,120
Speaker 2: and cheaper but obviously not as reliable over the longer term.

693
00:38:12,239 --> 00:38:15,360
Speaker 2: So interesting to see how that's all played out in

694
00:38:15,400 --> 00:38:18,279
Speaker 2: the way in which the finances worked is really what

695
00:38:18,440 --> 00:38:21,239
Speaker 2: made it happen. So many sort of lessons for other

696
00:38:21,280 --> 00:38:23,880
Speaker 2: things that we're looking at at the moment is rarely

697
00:38:23,920 --> 00:38:27,160
Speaker 2: about that. So looking forward to that conversation, we'll talk

698
00:38:27,200 --> 00:38:30,799
Speaker 2: to doctor sorry, Professor Rutunderwin Dingui, and we'll also of

699
00:38:30,800 --> 00:38:32,960
Speaker 2: course have personal finance with Warren Ingram. You with the

700
00:38:33,000 --> 00:38:35,600
Speaker 2: Money show at seven o'clock, and.

701
00:38:35,680 --> 00:38:40,000
Speaker 1: Now the Money Show with Stephen Credits on seven o two,

702
00:38:40,600 --> 00:38:41,480
Speaker 1: let's walk at all.

703
00:38:41,760 --> 00:38:44,000
Speaker 2: The Money Show with Stephen Curtis is brought to you

704
00:38:44,080 --> 00:38:48,840
Speaker 2: by Absent Corporate and investment banking, balancing economic growth with ecosystems.

705
00:38:48,840 --> 00:38:52,560
Speaker 2: That's how they're invested in your story. Well plenty to come.

706
00:38:52,600 --> 00:38:55,440
Speaker 2: We'll speak to Duncan McLeod, the founder and editor at

707
00:38:55,480 --> 00:38:58,440
Speaker 2: tech Central, about the Woomer's story. So much of that

708
00:38:58,640 --> 00:39:02,640
Speaker 2: story is actually about the finances, is actually about the

709
00:39:02,680 --> 00:39:06,040
Speaker 2: financial model that was closed, so that's such a big

710
00:39:06,080 --> 00:39:09,400
Speaker 2: part of it, and how things have changed so quickly

711
00:39:09,760 --> 00:39:12,320
Speaker 2: over the course of just ten years. And then I

712
00:39:12,320 --> 00:39:15,120
Speaker 2: suppose the other big question is where Wooma, where fiber

713
00:39:15,200 --> 00:39:19,040
Speaker 2: goes from here and how important that is. We'll speak

714
00:39:19,080 --> 00:39:22,760
Speaker 2: to Professor Rutundo and Dingui in just a moment as well.

715
00:39:23,080 --> 00:39:26,120
Speaker 2: I get an update for you on what's happening across

716
00:39:26,160 --> 00:39:29,200
Speaker 2: our continent. Quite a few interesting stories today I noticed.

717
00:39:29,239 --> 00:39:32,400
Speaker 2: And then from seven point thirty this evening Personal Finance

718
00:39:32,440 --> 00:39:35,160
Speaker 2: with Warren Ingram. Everything you need to know about buying

719
00:39:35,200 --> 00:39:39,440
Speaker 2: a home and always think based on previous bitter experience,

720
00:39:39,800 --> 00:39:42,040
Speaker 2: not that bitter. I suppose take what you think it's

721
00:39:42,080 --> 00:39:45,840
Speaker 2: going to cost in terms of transaction fees and transfer

722
00:39:45,920 --> 00:39:48,680
Speaker 2: costs and all the rest, and add at least another third.

723
00:39:48,840 --> 00:39:52,160
Speaker 2: It's always just more expensive than you think. And there's

724
00:39:52,239 --> 00:39:57,080
Speaker 2: so many unexpected costs cleaning here and moving stuff there,

725
00:39:57,280 --> 00:39:59,799
Speaker 2: all of those sorts of things. There's always costs that

726
00:39:59,840 --> 00:40:01,960
Speaker 2: you you haven't factored in, that you don't think are

727
00:40:02,000 --> 00:40:06,319
Speaker 2: going to happen. So that would be my advice. And

728
00:40:06,400 --> 00:40:09,120
Speaker 2: the other thing I would do is whoever you know

729
00:40:09,320 --> 00:40:11,880
Speaker 2: who you can trust to is older than you, who've

730
00:40:11,920 --> 00:40:14,120
Speaker 2: done it before, get them to look at any of

731
00:40:14,160 --> 00:40:17,680
Speaker 2: the legal documents. I mean, really, just do that because

732
00:40:17,760 --> 00:40:20,120
Speaker 2: so much of it is so complex and technical. So

733
00:40:20,120 --> 00:40:22,480
Speaker 2: if you have a friend who's in that game, take

734
00:40:22,520 --> 00:40:25,040
Speaker 2: them along with you. That would be my advice. Your

735
00:40:25,120 --> 00:40:28,680
Speaker 2: stories from buying a home, especially for the first time,

736
00:40:28,760 --> 00:40:30,920
Speaker 2: oh seven two seven oh two one seven oh two,

737
00:40:31,160 --> 00:40:33,359
Speaker 2: what would you suggest people need to look out for

738
00:40:33,480 --> 00:40:36,320
Speaker 2: nine minutes after seven, The Money Show.

739
00:40:36,200 --> 00:40:40,000
Speaker 3: With Stephen krudis live on ninety two point seven and

740
00:40:40,080 --> 00:40:43,280
Speaker 3: one six them streaming on the Prime Media Plus.

741
00:40:43,120 --> 00:40:46,040
Speaker 4: NAP and DStv channel eight five six.

742
00:40:46,200 --> 00:40:48,760
Speaker 2: We'll reports today that the five A supply of woman

743
00:40:48,840 --> 00:40:52,200
Speaker 2: now has one million subscribers. If you consider that for

744
00:40:52,239 --> 00:40:55,040
Speaker 2: every five or subscription, there must be what at least five,

745
00:40:55,120 --> 00:40:58,719
Speaker 2: maybe ten people, probably twenty to thirty to maybe one

746
00:40:58,760 --> 00:41:01,759
Speaker 2: hundred devices of each one, you're starting to look at

747
00:41:01,800 --> 00:41:05,120
Speaker 2: a very large number of people using these services and

748
00:41:05,160 --> 00:41:08,680
Speaker 2: a large number of data flowing through them. Duncan MacLeod

749
00:41:08,680 --> 00:41:11,560
Speaker 2: as the founder and editor at tech Central hos of Duncan,

750
00:41:11,600 --> 00:41:14,480
Speaker 2: I mean, I remember ADSL for such a long time.

751
00:41:14,680 --> 00:41:17,040
Speaker 2: I went to my impression of the beeps again. I

752
00:41:17,080 --> 00:41:20,800
Speaker 2: remember I was in joe brig at the time, Parkers

753
00:41:20,920 --> 00:41:23,879
Speaker 2: not too far away from me. But the excitement when

754
00:41:23,880 --> 00:41:27,640
Speaker 2: suddenly a joe Burg suburb was having fiber installed. What

755
00:41:27,840 --> 00:41:31,120
Speaker 2: was different about the UMA financial model to what had

756
00:41:31,160 --> 00:41:33,120
Speaker 2: gone before, Yeah.

757
00:41:32,920 --> 00:41:33,120
Speaker 6: It was.

758
00:41:33,200 --> 00:41:35,120
Speaker 14: It was actually quite remarkable that there have been a

759
00:41:35,120 --> 00:41:38,600
Speaker 14: lot of talk for years in the market and a

760
00:41:38,600 --> 00:41:41,799
Speaker 14: lot of pressure on Telcom to launch fiber services, but

761
00:41:41,840 --> 00:41:44,640
Speaker 14: they kept saying, we can't do this. It doesn't make

762
00:41:44,680 --> 00:41:48,600
Speaker 14: financial sense to deploy fiber in South Africa. The business

763
00:41:48,640 --> 00:41:52,640
Speaker 14: model doesn't stack up. And along came Neil Schumann and

764
00:41:52,800 --> 00:41:56,520
Speaker 14: his partner Johan Pretorious, the founders of Vumattal, and they said, well,

765
00:41:56,560 --> 00:41:58,960
Speaker 14: actually the business model does stack up, and we're going

766
00:41:59,000 --> 00:42:03,000
Speaker 14: to prove it. And they they started in Parkhurst, In fact,

767
00:42:03,000 --> 00:42:05,840
Speaker 14: I was there, and they put the first shovel in

768
00:42:05,880 --> 00:42:10,920
Speaker 14: the ground and started wiring up parkerst and they signed

769
00:42:10,960 --> 00:42:15,880
Speaker 14: up most of the suburbs. And then they spread rapidly

770
00:42:15,920 --> 00:42:20,400
Speaker 14: through initially through the Park's suburbs in northern Johannesburg in

771
00:42:20,480 --> 00:42:25,000
Speaker 14: the Park Parkhurst, to park Town and all those suburbs

772
00:42:25,000 --> 00:42:27,560
Speaker 14: around their victory Park, et cetera, and over time gradually

773
00:42:27,560 --> 00:42:31,719
Speaker 14: expanded across past parts of Johannesburg and Cape Town and

774
00:42:31,800 --> 00:42:34,600
Speaker 14: other parts of South Africa. And they just kept raising

775
00:42:34,600 --> 00:42:38,600
Speaker 14: money and raising capital and and drenching and building fiber.

776
00:42:38,680 --> 00:42:42,520
Speaker 14: And Telcom watching this had no choice and they saw

777
00:42:42,560 --> 00:42:48,520
Speaker 14: the uptake but to to invest in fiber infrastructure, and

778
00:42:48,680 --> 00:42:54,640
Speaker 14: of course they launched their wholesale division, fiber division Open SERF,

779
00:42:55,160 --> 00:42:58,160
Speaker 14: and they also poured billions around it into into network

780
00:42:58,440 --> 00:43:01,680
Speaker 14: infrastructure and they have hundreds and hundreds of thousands of

781
00:43:01,880 --> 00:43:05,080
Speaker 14: fiber customers. But the point is the interesting point is

782
00:43:05,160 --> 00:43:08,000
Speaker 14: that Telcom could have owned this market if they'd taken

783
00:43:08,000 --> 00:43:10,200
Speaker 14: the initiative early on, and they didn't. They tried to

784
00:43:10,280 --> 00:43:13,840
Speaker 14: sweat their copper assets, which is what ADSM is based on.

785
00:43:14,040 --> 00:43:16,960
Speaker 14: Consumers didn't like it. It was unreliable, it was expensive,

786
00:43:16,960 --> 00:43:20,640
Speaker 14: and it was slow. And an upstart came along and said, well, actually,

787
00:43:20,680 --> 00:43:22,880
Speaker 14: we can do this better, and they did, and it

788
00:43:23,080 --> 00:43:26,680
Speaker 14: forced the lumbering monopoly that was Telcom to react. And

789
00:43:28,160 --> 00:43:30,560
Speaker 14: of course many other fiber network operators have emerged in

790
00:43:30,600 --> 00:43:33,440
Speaker 14: the market since then, and it's been fantastic for consumers

791
00:43:33,520 --> 00:43:39,400
Speaker 14: because now we have very fast, uncapped, relatively affordable fiber

792
00:43:39,440 --> 00:43:41,800
Speaker 14: broadband in home and that's been transformative for the economy.

793
00:43:42,360 --> 00:43:45,760
Speaker 2: I mean, you wonder what the Telcom of today actually

794
00:43:45,920 --> 00:43:49,359
Speaker 2: reacted very differently to where Tellium was ten years ago.

795
00:43:49,440 --> 00:43:51,160
Speaker 2: I mean, I think absolutely that would have.

796
00:43:52,400 --> 00:43:54,439
Speaker 14: Yeah, so a very different company today. I mean back

797
00:43:54,520 --> 00:43:57,800
Speaker 14: back then, when when Bumatov was just getting started, Telcom

798
00:43:57,920 --> 00:44:00,360
Speaker 14: was still coming out of its part of its mopoy

799
00:44:00,440 --> 00:44:03,320
Speaker 14: period that it's had a very different mentality. The company

800
00:44:03,400 --> 00:44:05,680
Speaker 14: probably had three to four times the number of staff

801
00:44:05,719 --> 00:44:09,200
Speaker 14: than it has today. But under si Forma Secon and

802
00:44:10,800 --> 00:44:13,560
Speaker 14: his leadership particularly, but under some of the other CEOs,

803
00:44:13,600 --> 00:44:16,200
Speaker 14: the company has been through an extensive restructuring over the

804
00:44:16,280 --> 00:44:19,560
Speaker 14: years and is now a much more nimble organization that's

805
00:44:19,560 --> 00:44:23,800
Speaker 14: actually boxing very cleverly and is the second largest player

806
00:44:23,840 --> 00:44:25,520
Speaker 14: in the fiber market. It could have been the leader,

807
00:44:26,040 --> 00:44:28,719
Speaker 14: but it's squandered that early on. But there are a

808
00:44:28,760 --> 00:44:29,719
Speaker 14: significant plan today.

809
00:44:30,800 --> 00:44:33,879
Speaker 2: So what rumor did, if I remember, and I also

810
00:44:33,960 --> 00:44:36,640
Speaker 2: lived in one of the early adoptee suburbs, quite proud

811
00:44:36,680 --> 00:44:42,720
Speaker 2: of it at the time, duncan yeah, you, yeah, very please,

812
00:44:43,840 --> 00:44:46,480
Speaker 2: was that it didn't cost that much for the end consumer.

813
00:44:46,560 --> 00:44:48,840
Speaker 2: The way it worked was, I think you paid about

814
00:44:48,880 --> 00:44:51,319
Speaker 2: one thousand rand for the sort of installation in your

815
00:44:51,400 --> 00:44:53,759
Speaker 2: home that have had to dig past you anyway to

816
00:44:53,840 --> 00:44:55,880
Speaker 2: get it there. That to get permission to do that

817
00:44:56,080 --> 00:44:58,320
Speaker 2: may seem to manage to sort that out for the

818
00:44:58,360 --> 00:45:02,439
Speaker 2: council quite easily. They then after that you actually paid

819
00:45:02,480 --> 00:45:06,320
Speaker 2: the service providers, so most people didn't pay woman directly,

820
00:45:06,440 --> 00:45:10,120
Speaker 2: they paid an ISP and then the is SP I

821
00:45:10,239 --> 00:45:12,759
Speaker 2: presume paid umor so to do all of that, they

822
00:45:12,760 --> 00:45:14,920
Speaker 2: would have need quite a lot of needed quite a

823
00:45:15,000 --> 00:45:17,880
Speaker 2: lot of capital to start for quite a long time.

824
00:45:19,360 --> 00:45:23,320
Speaker 14: Yes, indeed, indeed it has been a very capital intense

825
00:45:23,320 --> 00:45:25,160
Speaker 14: of business and they've bought billions and got tens of

826
00:45:25,160 --> 00:45:28,719
Speaker 14: billions around into their into their network, and they have

827
00:45:28,920 --> 00:45:31,760
Speaker 14: raised funding for various quarters, and of course most recently

828
00:45:31,880 --> 00:45:36,759
Speaker 14: from from the sale of equity to Vodacom has recapitalized

829
00:45:36,760 --> 00:45:40,840
Speaker 14: their balance. She's an expensive business and they but you know,

830
00:45:40,880 --> 00:45:44,000
Speaker 14: they've raised the capital. They didn't rely on government funding.

831
00:45:44,040 --> 00:45:49,480
Speaker 14: It's all been private sector led private money. And and

832
00:45:49,600 --> 00:45:53,720
Speaker 14: John Bill Schumann and John Pretorius proved that the model

833
00:45:53,760 --> 00:45:56,560
Speaker 14: worked even when there was a big incumbent TALCA out

834
00:45:56,600 --> 00:45:58,960
Speaker 14: there saying this doesn't make any financial sense whatsoever.

835
00:46:00,280 --> 00:46:02,520
Speaker 2: Room has grown quite quickly. And you might say, we're

836
00:46:02,520 --> 00:46:04,600
Speaker 2: well done, Whomer, but that's not the end of it,

837
00:46:04,719 --> 00:46:07,320
Speaker 2: because even in an era of five G and starling,

838
00:46:07,440 --> 00:46:10,200
Speaker 2: fiber is still cheaper. It's going to be faster, it's

839
00:46:10,239 --> 00:46:12,040
Speaker 2: going to be more reliable in the longer run. If

840
00:46:12,080 --> 00:46:15,799
Speaker 2: it's underground. More and more areas still need fiber. It's

841
00:46:15,840 --> 00:46:20,040
Speaker 2: moving into township areas, and there's been financial innovation there too.

842
00:46:21,800 --> 00:46:24,880
Speaker 14: That's right, that's actually where the next land grab is

843
00:46:24,920 --> 00:46:25,479
Speaker 14: going to happen.

844
00:46:26,320 --> 00:46:26,480
Speaker 6: You know.

845
00:46:27,040 --> 00:46:27,759
Speaker 8: Never mind TELC.

846
00:46:27,760 --> 00:46:29,880
Speaker 14: I'm saying ten or fifteen years ago that this doesn't

847
00:46:29,920 --> 00:46:32,719
Speaker 14: make sense to roll out into the leafy suburbs. These

848
00:46:32,800 --> 00:46:36,760
Speaker 14: same entrepreneurs these same companies that pioneered the fiber model

849
00:46:36,800 --> 00:46:38,759
Speaker 14: in the leafy suburbs and now saying, hey, we think

850
00:46:38,800 --> 00:46:42,400
Speaker 14: we can do this in townships and you know, not

851
00:46:42,560 --> 00:46:44,879
Speaker 14: just the well to do parts of Soweto. They're talking

852
00:46:44,880 --> 00:46:51,520
Speaker 14: about taking us into low LSM poor communities, into shacks

853
00:46:52,920 --> 00:46:56,359
Speaker 14: and they started deploying this in places like Alexandra and Johannesburg,

854
00:46:56,920 --> 00:47:00,880
Speaker 14: in a KaiA Mundi and Selembosch and further afields, kaile Lecher,

855
00:47:02,120 --> 00:47:05,680
Speaker 14: various other places, and boom Ittsell has indicated and other

856
00:47:05,760 --> 00:47:09,200
Speaker 14: fiber network providers have indicated that they are going to

857
00:47:09,280 --> 00:47:13,200
Speaker 14: be investing huge money in the next few years on

858
00:47:14,160 --> 00:47:20,520
Speaker 14: deploying the same uncapped fiber into into into into township communities,

859
00:47:20,520 --> 00:47:23,399
Speaker 14: into more rural and outlying parts of the country. They're

860
00:47:23,400 --> 00:47:25,640
Speaker 14: obviously using different models here. Some of the fiber is

861
00:47:25,680 --> 00:47:28,400
Speaker 14: deployed are early rather than being trenched because it's cheaper.

862
00:47:29,840 --> 00:47:32,400
Speaker 14: The connections perhaps not the same, they're more contended than

863
00:47:32,440 --> 00:47:35,720
Speaker 14: that sort of thing. But the idea is to bring quality,

864
00:47:35,880 --> 00:47:39,840
Speaker 14: uncapped internet to everyone in South Africa over time that

865
00:47:39,840 --> 00:47:42,520
Speaker 14: perhaps not the most outlying rural parts of Poising gonna

866
00:47:42,560 --> 00:47:44,560
Speaker 14: tell I think those will continue to have to be

867
00:47:44,640 --> 00:47:49,640
Speaker 14: served through mobile and maybe starlink will internet cafes and

868
00:47:49,680 --> 00:47:53,800
Speaker 14: rural areas that sort of thing. But these same guys,

869
00:47:54,160 --> 00:47:57,840
Speaker 14: the same private investors who saw the opportunity in the

870
00:47:57,920 --> 00:48:00,480
Speaker 14: leafy services and not saying there's a huge opportunity to

871
00:48:00,560 --> 00:48:02,560
Speaker 14: wire up everybody in this country pretty much.

872
00:48:04,320 --> 00:48:05,880
Speaker 2: I mean, there's so much to it. But if you

873
00:48:05,920 --> 00:48:08,960
Speaker 2: look at the knock on effects, because yes, streaming had

874
00:48:09,000 --> 00:48:11,040
Speaker 2: been around in other countries for a while, but it

875
00:48:11,160 --> 00:48:14,080
Speaker 2: was only with fiber that streaming happened and that had

876
00:48:14,160 --> 00:48:17,080
Speaker 2: huge knock on effects on the SABC, I would say

877
00:48:17,400 --> 00:48:19,080
Speaker 2: we forget that sometimes it's huge.

878
00:48:19,280 --> 00:48:23,680
Speaker 14: And then multi choice multi choice in particular, you know,

879
00:48:23,760 --> 00:48:26,160
Speaker 14: I think my multi choice is really reeling from the

880
00:48:26,960 --> 00:48:30,480
Speaker 14: introduction of Netflix and then later other competitors like Amazon, Prime,

881
00:48:30,520 --> 00:48:34,359
Speaker 14: Apple TV, et cetera, Disney. You know, I think they're

882
00:48:34,440 --> 00:48:37,120
Speaker 14: they're under under considerable pressure. So it's it's had a

883
00:48:37,160 --> 00:48:40,600
Speaker 14: big impact on on on the distribution of content in

884
00:48:40,640 --> 00:48:44,200
Speaker 14: South Africa, and yeah, we're seeing that now multi Choice

885
00:48:44,320 --> 00:48:46,359
Speaker 14: s ABC, they're under a motor pressure.

886
00:48:46,640 --> 00:48:49,239
Speaker 2: Thank you very much. Indeed. Duncan McLeod, founder and editor

887
00:48:49,280 --> 00:48:52,440
Speaker 2: at tech Central Dot dot what was the first thing

888
00:48:52,520 --> 00:48:54,960
Speaker 2: you did when you got fiber at home? Seven two

889
00:48:55,040 --> 00:48:58,919
Speaker 2: seven two one seven two seventeen minutes after seven many

890
00:48:59,000 --> 00:49:04,080
Speaker 2: show a get business focus doctor. Oh, I'm sorry, Professor

891
00:49:04,360 --> 00:49:07,959
Speaker 2: Rotendo and Dengree, good evening, congratulations on the promotion.

892
00:49:08,480 --> 00:49:11,680
Speaker 6: Thanks Steven. And it sounds so much better when you said, but.

893
00:49:13,280 --> 00:49:15,360
Speaker 2: Well, I have to call you a prop from now on.

894
00:49:15,840 --> 00:49:17,719
Speaker 2: I mean I would stand out, but you can't see me.

895
00:49:17,960 --> 00:49:18,000
Speaker 10: So.

896
00:49:19,320 --> 00:49:21,760
Speaker 2: Professor Rotundo and Dengue, of course, is the founding director

897
00:49:21,760 --> 00:49:24,480
Speaker 2: at Tribe Africa Advisory and author of the book Rumble

898
00:49:24,520 --> 00:49:26,360
Speaker 2: in the Jungle Reloaded. I wonder if that book is

899
00:49:26,400 --> 00:49:28,400
Speaker 2: certainly more expensive, so.

900
00:49:30,120 --> 00:49:31,480
Speaker 6: I should pull the price.

901
00:49:33,000 --> 00:49:35,520
Speaker 2: You get to write it all in profit to each one.

902
00:49:36,760 --> 00:49:40,080
Speaker 2: Ghan is limiting foreign investments by local funds. Why are

903
00:49:40,160 --> 00:49:42,239
Speaker 2: they doing that? That's such an interesting thing to do.

904
00:49:44,400 --> 00:49:47,280
Speaker 15: Yeah, so, Stephen, I mean the starter with Ghana obviously,

905
00:49:47,480 --> 00:49:50,040
Speaker 15: the President Muhammad is coming and is trying to implement

906
00:49:50,120 --> 00:49:53,680
Speaker 15: some reforms that will just allow them to I mean

907
00:49:53,719 --> 00:49:56,680
Speaker 15: his ambition, Steven is by twenty twenty nine, he wants

908
00:49:56,719 --> 00:49:59,400
Speaker 15: to have capital reserves of twenty billion US dollars. So

909
00:49:59,520 --> 00:50:02,800
Speaker 15: what is implemented as a law in the country that

910
00:50:02,960 --> 00:50:05,600
Speaker 15: for local fund managers they are not allowed to exceed

911
00:50:05,719 --> 00:50:10,080
Speaker 15: more than twenty percent of assets under foreign investments.

912
00:50:10,080 --> 00:50:13,399
Speaker 6: Whether it's Western, Asian, Eastern, it doesn't matter.

913
00:50:13,600 --> 00:50:15,279
Speaker 15: And the reason is doing this, he just wants to

914
00:50:15,440 --> 00:50:20,399
Speaker 15: enforce an encourage investment and obviously the city is which

915
00:50:20,440 --> 00:50:22,000
Speaker 15: is the currency of Ghana, is taking a bit of

916
00:50:22,040 --> 00:50:26,280
Speaker 15: a knock with regards to the volatility of global dynamics.

917
00:50:26,760 --> 00:50:30,400
Speaker 15: As we know, Ghana relies heavily on gold, which with

918
00:50:30,560 --> 00:50:32,480
Speaker 15: current gold prices they should go on an up. But

919
00:50:32,600 --> 00:50:36,280
Speaker 15: the problem is the same informal sector is a huge leakage.

920
00:50:36,280 --> 00:50:39,160
Speaker 15: And obviously last time we talked about the text incentives

921
00:50:39,200 --> 00:50:41,400
Speaker 15: that are put in place to waive a text for

922
00:50:41,480 --> 00:50:43,640
Speaker 15: those guys so that they don't smuggle. But on the

923
00:50:43,719 --> 00:50:46,319
Speaker 15: other hand, they also rely on co or which has

924
00:50:46,360 --> 00:50:48,640
Speaker 15: taken a bit of as a knock from a commodity pricing.

925
00:50:48,920 --> 00:50:52,680
Speaker 15: So he's put a cap and with regards to current

926
00:50:52,920 --> 00:50:55,440
Speaker 15: investments that are there since the massive ex seeds seventy percent,

927
00:50:55,880 --> 00:51:00,239
Speaker 15: but he's enforcing these reforms even to encourage law local

928
00:51:00,320 --> 00:51:03,360
Speaker 15: investment and to drive the city and obviously reduce the

929
00:51:03,440 --> 00:51:04,520
Speaker 15: impact of volatility.

930
00:51:05,320 --> 00:51:08,359
Speaker 2: And I mean to try and sort of reinvest your

931
00:51:08,400 --> 00:51:12,080
Speaker 2: own financial resources to invest in your own country basically,

932
00:51:12,120 --> 00:51:13,719
Speaker 2: I mean it does work over the longer term. We

933
00:51:13,800 --> 00:51:15,280
Speaker 2: know that from the history of development.

934
00:51:17,080 --> 00:51:19,840
Speaker 15: Yeah, I mean we look at countries, you know, shining

935
00:51:19,880 --> 00:51:21,600
Speaker 15: emblems that have done it into the past. You look

936
00:51:21,640 --> 00:51:24,600
Speaker 15: at your Singapore's, you look at you Japan. You know,

937
00:51:24,680 --> 00:51:29,280
Speaker 15: guys who have intentionally made investments of the countries. Obviously Ghana.

938
00:51:29,600 --> 00:51:33,080
Speaker 15: The challenge with a Ghana obviously it's it's quite logos

939
00:51:33,200 --> 00:51:37,239
Speaker 15: to a number of key countries like Nigeria, which is

940
00:51:37,360 --> 00:51:39,279
Speaker 15: I mean has its challenges, but it's stable. But then

941
00:51:39,360 --> 00:51:42,640
Speaker 15: you've got those that's the help belt that's in equoas

942
00:51:42,680 --> 00:51:45,759
Speaker 15: you know, Mali, Bekina, Faso and Nicia and all of

943
00:51:45,800 --> 00:51:49,160
Speaker 15: them are going through quite key changes in terms of

944
00:51:49,200 --> 00:51:51,760
Speaker 15: their politics and the economy. And there's a ripple effect

945
00:51:51,840 --> 00:51:54,040
Speaker 15: on Ghana, which is quite close to them in terms

946
00:51:54,080 --> 00:51:55,640
Speaker 15: of from an equas perspective.

947
00:51:55,719 --> 00:51:59,239
Speaker 6: So hopefully this will bring change and we'll watching C

948
00:51:59,360 --> 00:52:00,720
Speaker 6: Steven and Girla.

949
00:52:00,760 --> 00:52:03,279
Speaker 2: They're going to buy a strategic stake twenty to thirty

950
00:52:03,320 --> 00:52:06,960
Speaker 2: percent in the world's leading diamond company. I mean interesting

951
00:52:06,960 --> 00:52:09,160
Speaker 2: because diamonds are under so much pressure. We heard that

952
00:52:09,239 --> 00:52:09,959
Speaker 2: earlier this week.

953
00:52:11,960 --> 00:52:14,600
Speaker 15: Yeah, diamond's had a lot of pleasure. I mean sort

954
00:52:14,640 --> 00:52:18,080
Speaker 15: of a combination of a number of factors, but one

955
00:52:18,200 --> 00:52:20,759
Speaker 15: the lab diamonds. We know that that impact on the

956
00:52:20,840 --> 00:52:24,880
Speaker 15: pricing gold obviously is becoming quite a focus now with

957
00:52:25,239 --> 00:52:25,920
Speaker 15: commodities and.

958
00:52:25,920 --> 00:52:26,680
Speaker 6: The positive things.

959
00:52:26,760 --> 00:52:29,719
Speaker 15: But I think from the beer's perspective, Stephen, I think

960
00:52:29,760 --> 00:52:32,560
Speaker 15: two key players. Firstly, we have to bring into context

961
00:52:32,600 --> 00:52:35,840
Speaker 15: at Botswana on fifteen percent of the beers and what

962
00:52:36,040 --> 00:52:38,919
Speaker 15: I actually wanted to buy it, because they're also doing

963
00:52:38,960 --> 00:52:41,480
Speaker 15: this drive in terms of diversifying the economy, trying to

964
00:52:42,760 --> 00:52:46,680
Speaker 15: to sort of move away from lime on oil. They

965
00:52:46,719 --> 00:52:49,279
Speaker 15: wanted to do a total buyout, but they didn't want

966
00:52:49,320 --> 00:52:53,600
Speaker 15: to go into a big fight from a shareholder perspective

967
00:52:53,600 --> 00:52:57,239
Speaker 15: with with with Botswana, so their focus is on saying

968
00:52:57,520 --> 00:53:01,120
Speaker 15: let's buy a part of the So those discussions are

969
00:53:01,120 --> 00:53:05,839
Speaker 15: still on the table. The two companies or state owned

970
00:53:05,840 --> 00:53:09,160
Speaker 15: companies in Angola that are driving this of the government

971
00:53:09,640 --> 00:53:13,040
Speaker 15: is DEMIR and the National Diamond Trading Company h and

972
00:53:13,160 --> 00:53:15,560
Speaker 15: they are putting their their stake on the ground with

973
00:53:15,680 --> 00:53:19,520
Speaker 15: regards to this, believe it or not, Stephen, most recently

974
00:53:20,400 --> 00:53:23,640
Speaker 15: in kimberlite. A field in Kimberlite in Angola was discovered

975
00:53:24,440 --> 00:53:27,000
Speaker 15: in terms of a diamond deposit, and it's the first

976
00:53:27,120 --> 00:53:31,160
Speaker 15: time in the last thirty years that the business has

977
00:53:31,360 --> 00:53:34,120
Speaker 15: has made such a finding. So from an Angola perspective,

978
00:53:34,360 --> 00:53:37,200
Speaker 15: it's a great opportunity. I think my only one is, Stephen,

979
00:53:37,560 --> 00:53:41,040
Speaker 15: the bigger picture of things is that the price of diamonds,

980
00:53:41,080 --> 00:53:43,120
Speaker 15: as you said, is not greater at the moment. Is

981
00:53:43,239 --> 00:53:46,400
Speaker 15: this the right strategic decision for sovereign wealth to be

982
00:53:46,480 --> 00:53:49,560
Speaker 15: injected in a commodity like diamonds for a country like

983
00:53:49,600 --> 00:53:52,600
Speaker 15: Angola that is trying to diversify, And that's for me,

984
00:53:52,760 --> 00:53:54,239
Speaker 15: is the is the big concern in terms of the

985
00:53:54,280 --> 00:53:55,160
Speaker 15: decision making.

986
00:53:55,440 --> 00:53:59,719
Speaker 2: Sure and Kenya the cocoa bio fuel biofuel firm, I mean,

987
00:54:00,080 --> 00:54:03,080
Speaker 2: that's having a big impact. There's no clean cooking option.

988
00:54:04,960 --> 00:54:08,279
Speaker 15: Yes, so, Stephen, I mean the positive story on this

989
00:54:08,360 --> 00:54:11,600
Speaker 15: side is that you know, with Africa, the impact of

990
00:54:11,680 --> 00:54:15,080
Speaker 15: fossil fuels from a health perspective is quite high.

991
00:54:15,239 --> 00:54:21,000
Speaker 6: So obviously bioethanol is the clean fuel. The cocoa netflix gets.

992
00:54:21,480 --> 00:54:24,400
Speaker 15: The way it's sort of funded and financed itself was

993
00:54:24,440 --> 00:54:29,160
Speaker 15: with regards to carbon credits, which is a sophisticated mechanism

994
00:54:29,560 --> 00:54:33,080
Speaker 15: of getting credits from a global perspective that allows you

995
00:54:33,160 --> 00:54:37,000
Speaker 15: to finance such an initiative. They are probably about one

996
00:54:37,080 --> 00:54:41,919
Speaker 15: point five million households that rely on this bioethano fuel

997
00:54:42,000 --> 00:54:43,600
Speaker 15: through this framework, Stephen.

998
00:54:45,080 --> 00:54:46,840
Speaker 6: The cost of it is quite affordable.

999
00:54:46,880 --> 00:54:50,400
Speaker 15: It's thirty cents per household, which you can appreciate in

1000
00:54:50,520 --> 00:54:53,160
Speaker 15: terms of the lower end of the market is quite attractive.

1001
00:54:53,440 --> 00:54:55,080
Speaker 6: Government has taken away the permit for.

1002
00:54:55,120 --> 00:54:57,680
Speaker 15: One one reason another so they can no longer rely

1003
00:54:58,120 --> 00:55:00,800
Speaker 15: on these carbon credits and by virgin of that, Steven,

1004
00:55:01,040 --> 00:55:04,239
Speaker 15: they can't actually now continue this initiated with regards to

1005
00:55:06,200 --> 00:55:09,279
Speaker 15: with regards to to you know, to supply and bioethnol

1006
00:55:09,360 --> 00:55:12,600
Speaker 15: because they need to import it and distribute it. So said,

1007
00:55:12,640 --> 00:55:15,840
Speaker 15: on one side, the bioethnol model absolutely great. This is

1008
00:55:15,880 --> 00:55:18,640
Speaker 15: what Africa needs. You know, six hundred million people don't

1009
00:55:18,680 --> 00:55:21,520
Speaker 15: have access to electricity and fuel et cetera, et cetera.

1010
00:55:21,880 --> 00:55:24,720
Speaker 15: But on the downside is that it brings a reality

1011
00:55:24,719 --> 00:55:28,279
Speaker 15: to a spotlight Steven that with regards to implementing these

1012
00:55:28,360 --> 00:55:32,080
Speaker 15: global frameworks with regards to clean energy and the whole

1013
00:55:32,160 --> 00:55:35,120
Speaker 15: valuit chain around it. It's a bit more complicated and

1014
00:55:35,239 --> 00:55:38,880
Speaker 15: even a country like like Kina, which is forward thinking,

1015
00:55:39,560 --> 00:55:41,160
Speaker 15: is battling with regards to this.

1016
00:55:41,400 --> 00:55:43,759
Speaker 6: This is a typical example. Hopefully they get out of it.

1017
00:55:44,440 --> 00:55:46,839
Speaker 15: But at the moment, one point thillion, one point five

1018
00:55:46,920 --> 00:55:50,759
Speaker 15: million households at risk of being impacted because of this,

1019
00:55:51,520 --> 00:55:53,879
Speaker 15: of this permit that has been turned down by the government.

1020
00:55:54,040 --> 00:55:56,880
Speaker 2: And then the Africa Eco Race there coming to an end.

1021
00:55:56,920 --> 00:55:58,160
Speaker 2: In Deckard's quite something.

1022
00:56:00,200 --> 00:56:01,160
Speaker 6: Yeah, I mean darka.

1023
00:56:01,280 --> 00:56:05,200
Speaker 15: We know that it's a fund seventy five kilometer Ray

1024
00:56:05,280 --> 00:56:10,680
Speaker 15: Stephen from Mauritannia to Senegal. It's quite it's quite a

1025
00:56:10,760 --> 00:56:13,520
Speaker 15: well known race. But the business side of is threal

1026
00:56:13,560 --> 00:56:15,279
Speaker 15: where I want to focus on. I think people take

1027
00:56:15,360 --> 00:56:18,439
Speaker 15: for granted the actual costs of participating in the race.

1028
00:56:18,520 --> 00:56:24,000
Speaker 15: You've also got trucks and motorbikes as well as as cars.

1029
00:56:24,280 --> 00:56:26,600
Speaker 15: But just from a cost perspective, apparently there wass are

1030
00:56:26,640 --> 00:56:29,120
Speaker 15: not that great. But just from a cost perspective, to

1031
00:56:29,239 --> 00:56:32,880
Speaker 15: register car, it's about thirty two thousand euros Stephen per car.

1032
00:56:33,040 --> 00:56:36,160
Speaker 15: For a truck it's forty three thousand euros per car.

1033
00:56:38,080 --> 00:56:39,840
Speaker 15: And above that you need your mechanics because they need

1034
00:56:39,880 --> 00:56:41,960
Speaker 15: to make sure the equipment is running smoothly. That on

1035
00:56:42,040 --> 00:56:46,479
Speaker 15: average is about fifteen thousand euros per mechanic. The funny side,

1036
00:56:46,520 --> 00:56:49,160
Speaker 15: and obviously this is before sponsors come in and through

1037
00:56:49,239 --> 00:56:53,359
Speaker 15: big prices. But according to the report, Stephen, you're looking

1038
00:56:53,360 --> 00:56:55,440
Speaker 15: at about five thousand euros for the winner of the

1039
00:56:55,520 --> 00:56:59,000
Speaker 15: cart race, but for the motorbike races it's fifty thousand euros.

1040
00:56:59,280 --> 00:57:01,120
Speaker 15: So I think the when maybe the next talk you

1041
00:57:01,200 --> 00:57:03,840
Speaker 15: and I get onto a bike, we get somebody to

1042
00:57:04,040 --> 00:57:07,040
Speaker 15: put fifty thousand euros and tell our wives that we're

1043
00:57:07,080 --> 00:57:11,480
Speaker 15: going to do some journalist some researching exercise in Senegal

1044
00:57:11,920 --> 00:57:14,360
Speaker 15: and maybe we can come back with five thousand euros

1045
00:57:14,400 --> 00:57:15,560
Speaker 15: after driving through the desert.

1046
00:57:16,080 --> 00:57:20,200
Speaker 2: Yeah, no, crazy, quite something, Professor Rosendro and DINGLEI thanks

1047
00:57:20,320 --> 00:57:23,600
Speaker 2: very much. Indeed, founding director at Tribe Africa Advisory and

1048
00:57:23,640 --> 00:57:27,440
Speaker 2: author of the book Rumble in the Jungle reloaded many.

1049
00:57:27,840 --> 00:57:30,080
Speaker 3: Personal finance with Warren Ingram.

1050
00:57:31,560 --> 00:57:34,080
Speaker 2: Let's have Warren back with us, cerified financial planner at

1051
00:57:34,120 --> 00:57:37,040
Speaker 2: Galileo Capital. How's it, Warren? What to think about when

1052
00:57:37,120 --> 00:57:39,000
Speaker 2: buying a new home. I thought you didn't believe in

1053
00:57:39,080 --> 00:57:39,720
Speaker 2: buying homes.

1054
00:57:41,520 --> 00:57:45,000
Speaker 16: I do, Stephen, I think if you're going to stay

1055
00:57:45,000 --> 00:57:47,960
Speaker 16: in a house for eight years or longer, probably ten

1056
00:57:48,040 --> 00:57:50,760
Speaker 16: years or longer as to be safe, then you should

1057
00:57:50,800 --> 00:57:53,320
Speaker 16: really think about buying a home. But it's something we

1058
00:57:53,400 --> 00:57:55,400
Speaker 16: always need to talk about because there are a lot

1059
00:57:55,440 --> 00:57:59,000
Speaker 16: of people in South Africa who just can't get away from.

1060
00:57:58,840 --> 00:57:59,480
Speaker 2: Bricks and water.

1061
00:57:59,520 --> 00:58:01,600
Speaker 16: It's the thing they want to buy more than anything else,

1062
00:58:02,000 --> 00:58:03,360
Speaker 16: so we need to help them think about it.

1063
00:58:04,120 --> 00:58:06,640
Speaker 2: It's also, I mean, no matter what happens, it's such

1064
00:58:06,680 --> 00:58:09,560
Speaker 2: a big commitment, a twenty year commitment. There's so many

1065
00:58:09,680 --> 00:58:12,080
Speaker 2: different factors that can really make a big difference.

1066
00:58:13,880 --> 00:58:17,240
Speaker 16: Yeah, I think for most South Africans, but buying your

1067
00:58:17,280 --> 00:58:21,240
Speaker 16: home is probably the biggest transaction will ever do, biggest

1068
00:58:21,280 --> 00:58:25,280
Speaker 16: financial transaction will ever do. And so you know, a

1069
00:58:25,360 --> 00:58:27,000
Speaker 16: lot of the time when you talk to people that

1070
00:58:27,120 --> 00:58:30,400
Speaker 16: have bought homes, see that they didn't know what they

1071
00:58:30,480 --> 00:58:32,680
Speaker 16: didn't know, They fell in love with the place, or

1072
00:58:33,280 --> 00:58:37,480
Speaker 16: rushed the deal, et cetera. And so it's I mean,

1073
00:58:37,560 --> 00:58:39,440
Speaker 16: for me, it's something where if you're going to make

1074
00:58:39,480 --> 00:58:42,120
Speaker 16: this kind of a commitment, you should do it. You know,

1075
00:58:42,440 --> 00:58:44,360
Speaker 16: there will always be motion involved. You have to live

1076
00:58:44,400 --> 00:58:45,680
Speaker 16: in the place, you have to you know, you have

1077
00:58:45,760 --> 00:58:48,240
Speaker 16: to enjoy being there, but before you, you know, you

1078
00:58:48,600 --> 00:58:51,000
Speaker 16: allow yourself to get to get involved emotion you have

1079
00:58:51,120 --> 00:58:54,280
Speaker 16: to have some pretty good idea of the financial implications

1080
00:58:54,400 --> 00:58:56,400
Speaker 16: of what you're going to do, and make sure you've

1081
00:58:56,400 --> 00:59:01,160
Speaker 16: done your homework. You're financially prepared psychologically because there will

1082
00:59:01,200 --> 00:59:03,320
Speaker 16: be shocks along the way, and make sure that you

1083
00:59:03,400 --> 00:59:04,920
Speaker 16: can deal with those shocks as they come.

1084
00:59:05,360 --> 00:59:07,919
Speaker 2: Okay, let's get into some of the costs. And quite

1085
00:59:07,920 --> 00:59:10,600
Speaker 2: a few costs are upfront and you don't always think

1086
00:59:10,600 --> 00:59:12,520
Speaker 2: about this when you're looking at a house and you're

1087
00:59:12,520 --> 00:59:14,800
Speaker 2: looking up the price and you're thinking, well that pull

1088
00:59:15,240 --> 00:59:17,240
Speaker 2: I could make that bluer than the sky has it.

1089
00:59:18,720 --> 00:59:21,960
Speaker 2: But the upfront costs are rarely even if you get

1090
00:59:22,200 --> 00:59:25,320
Speaker 2: a big bond, really more than you than you would expect.

1091
00:59:26,960 --> 00:59:29,360
Speaker 16: Yeah, I think it's one of those things where we

1092
00:59:29,560 --> 00:59:31,800
Speaker 16: we kind of think, you know, if we can convince

1093
00:59:31,880 --> 00:59:34,120
Speaker 16: the bank, you know, with our first bond the first

1094
00:59:34,160 --> 00:59:36,320
Speaker 16: time we buy a house, to convince the bank to

1095
00:59:36,360 --> 00:59:39,080
Speaker 16: give us, you know, one hundred percent bond that that

1096
00:59:39,280 --> 00:59:41,360
Speaker 16: you know, we scrape together some cash and that'll be

1097
00:59:41,400 --> 00:59:43,920
Speaker 16: okay to get through whatever the costs are that we need,

1098
00:59:44,720 --> 00:59:47,160
Speaker 16: and then we'll start, you know, the following month paying

1099
00:59:47,200 --> 00:59:51,120
Speaker 16: down the bond and everything will be okay. I wish

1100
00:59:51,200 --> 00:59:53,400
Speaker 16: it was that easy. That that's not really the case.

1101
00:59:53,800 --> 00:59:56,400
Speaker 16: So we need to prepare for a few costs when

1102
00:59:56,440 --> 00:59:58,880
Speaker 16: when we're going into buying a hoss and or and

1103
00:59:59,200 --> 01:00:00,920
Speaker 16: when I say hass could be a house, it could

1104
01:00:00,920 --> 01:00:03,760
Speaker 16: be an apartment, you know, in an the state, et cetera.

1105
01:00:04,200 --> 01:00:08,280
Speaker 16: And the first thing is there are always lawyers involved.

1106
01:00:07,920 --> 01:00:08,560
Speaker 6: In the process.

1107
01:00:08,760 --> 01:00:11,840
Speaker 16: And and so when you register a bond on a property,

1108
01:00:11,920 --> 01:00:13,600
Speaker 16: for example, you go to a bank and you say,

1109
01:00:13,680 --> 01:00:15,680
Speaker 16: will you will you lend me the money to buy

1110
01:00:15,760 --> 01:00:19,120
Speaker 16: this house? The bank says, sure, no problem. What happens

1111
01:00:19,200 --> 01:00:23,320
Speaker 16: now is the bank becomes in essence, the real owner

1112
01:00:23,360 --> 01:00:26,320
Speaker 16: of the property until you've paid it off. And so

1113
01:00:26,440 --> 01:00:29,640
Speaker 16: what happens is they they appoint a lawyer who registers

1114
01:00:30,040 --> 01:00:33,040
Speaker 16: bond on the property, and that bond says that you know,

1115
01:00:33,440 --> 01:00:36,040
Speaker 16: you know, yes, Warren Warren is the person that's names

1116
01:00:36,080 --> 01:00:40,280
Speaker 16: on the title deed, but alongside Bank ABC. And until

1117
01:00:40,360 --> 01:00:44,080
Speaker 16: such time as Bank ABC says differently, what Warren can't

1118
01:00:44,120 --> 01:00:47,040
Speaker 16: sell that place without the bank's approval. So there is

1119
01:00:47,120 --> 01:00:51,080
Speaker 16: a bond registration process, and then that that's not the

1120
01:00:51,160 --> 01:00:53,840
Speaker 16: only thing because we also have to pay some tax.

1121
01:00:53,960 --> 01:00:56,360
Speaker 16: You know, SORRS is not going to let you buy

1122
01:00:56,400 --> 01:00:59,080
Speaker 16: and sell properties along the way without trying to claim

1123
01:00:59,280 --> 01:01:03,520
Speaker 16: some money as well. And so if you've got a

1124
01:01:03,600 --> 01:01:06,280
Speaker 16: property and it's worth more than one point two million round,

1125
01:01:06,640 --> 01:01:09,040
Speaker 16: then you're going to pay bond fees and you're going

1126
01:01:09,080 --> 01:01:12,680
Speaker 16: to pay transfer fees to SARS as well, and so

1127
01:01:12,920 --> 01:01:17,280
Speaker 16: just be careful there because those transfer costs can add

1128
01:01:17,360 --> 01:01:19,800
Speaker 16: up very quickly. And I did a quick calculation. I'm

1129
01:01:19,840 --> 01:01:22,360
Speaker 16: not pretending to do this in my head, but for

1130
01:01:22,440 --> 01:01:26,640
Speaker 16: around a two million round property, these upfront costs are

1131
01:01:27,040 --> 01:01:29,240
Speaker 16: going to be pretty close to about one hundred and

1132
01:01:29,280 --> 01:01:32,600
Speaker 16: twenty thousand Rand when you go in, and for a

1133
01:01:32,680 --> 01:01:36,960
Speaker 16: five million property it's going to jump significantly around five

1134
01:01:37,040 --> 01:01:42,680
Speaker 16: hundred thousand. So that's the lawyer fees, it's the taxes

1135
01:01:42,720 --> 01:01:45,920
Speaker 16: to SARS, the transfer duties, so all of those costs

1136
01:01:45,920 --> 01:01:49,320
Speaker 16: are hitting you upfront before you've even paid for the geezer,

1137
01:01:49,360 --> 01:01:51,440
Speaker 16: which is probably going to burst on the first week

1138
01:01:51,520 --> 01:01:52,680
Speaker 16: that you can move into your property.

1139
01:01:53,040 --> 01:01:58,760
Speaker 2: Only if the mother in laws come for tea weren't okay,

1140
01:01:59,040 --> 01:02:01,080
Speaker 2: you can get one hundred. I mean, there was a

1141
01:02:01,120 --> 01:02:02,600
Speaker 2: time when you could get one hundred and one one

1142
01:02:02,640 --> 01:02:05,160
Speaker 2: hundred and two percent mortgage. I think those days, thankfully

1143
01:02:05,200 --> 01:02:07,919
Speaker 2: are long gone. But even if you get a bond

1144
01:02:08,000 --> 01:02:11,840
Speaker 2: for one hundred percent, should you still consider putting down

1145
01:02:11,880 --> 01:02:13,680
Speaker 2: a deposit? I mean, is there a gain to you

1146
01:02:13,800 --> 01:02:14,240
Speaker 2: in doing that?

1147
01:02:16,520 --> 01:02:17,200
Speaker 6: I think it's.

1148
01:02:18,600 --> 01:02:21,640
Speaker 16: It's the trade off between you know, what can you

1149
01:02:21,760 --> 01:02:24,640
Speaker 16: do upfront on a monthly basis? How much have you saved?

1150
01:02:25,640 --> 01:02:28,600
Speaker 16: Because the moment you put down a deposit, the benefit

1151
01:02:28,680 --> 01:02:31,480
Speaker 16: to you is that your you're either you keep your

1152
01:02:31,560 --> 01:02:32,560
Speaker 16: repayments a bit lower.

1153
01:02:32,640 --> 01:02:33,240
Speaker 5: So you know, if you.

1154
01:02:33,320 --> 01:02:36,400
Speaker 16: Owed, let's say it was ten thousand a month, but

1155
01:02:36,520 --> 01:02:39,920
Speaker 16: now you put down a deposit and it's a decent deposit,

1156
01:02:40,000 --> 01:02:42,120
Speaker 16: you might find that you only need to pay nine

1157
01:02:42,200 --> 01:02:45,200
Speaker 16: thousand a month. And so that's the one way of

1158
01:02:45,560 --> 01:02:48,240
Speaker 16: serving yourself some money on a monthly basis and creating

1159
01:02:48,280 --> 01:02:50,600
Speaker 16: a bit of space in your budget is put down

1160
01:02:50,640 --> 01:02:53,480
Speaker 16: a big deposit, and the bigger the deposit, the smaller

1161
01:02:53,520 --> 01:02:56,800
Speaker 16: the monthly repayments. The alternative is that you put down

1162
01:02:57,480 --> 01:03:00,880
Speaker 16: a nice deposit and you don't less. In other words,

1163
01:03:00,920 --> 01:03:03,280
Speaker 16: you still pay your ten thousand round a month, and

1164
01:03:03,400 --> 01:03:05,840
Speaker 16: if you do that, you're going to take years off

1165
01:03:05,880 --> 01:03:08,480
Speaker 16: the life of the bond. So most of the time

1166
01:03:08,880 --> 01:03:11,120
Speaker 16: when we get a bond in South Africa, the banks

1167
01:03:11,160 --> 01:03:12,800
Speaker 16: will give it to us for a twenty year period.

1168
01:03:13,320 --> 01:03:15,240
Speaker 16: And the bigger the deposit on day one, and the

1169
01:03:15,280 --> 01:03:18,000
Speaker 16: more consistent you are and paying a bit extra every month,

1170
01:03:18,320 --> 01:03:20,600
Speaker 16: you can start to cut off periods of you know,

1171
01:03:20,920 --> 01:03:24,400
Speaker 16: six to eight years on a bond just by paying

1172
01:03:24,400 --> 01:03:27,680
Speaker 16: a deposit on day one. And so I mean to me,

1173
01:03:28,800 --> 01:03:31,760
Speaker 16: you know, I think the other thing around a bond

1174
01:03:32,000 --> 01:03:34,360
Speaker 16: and maybe paying a bit extras, it becomes a very

1175
01:03:34,440 --> 01:03:37,040
Speaker 16: nice place to build up an emergency fund, you know,

1176
01:03:37,120 --> 01:03:39,520
Speaker 16: because you're going to need an emergency fund when you

1177
01:03:39,600 --> 01:03:42,640
Speaker 16: own a property. So if you view nothing else, then

1178
01:03:42,760 --> 01:03:44,480
Speaker 16: pay the extra money that you would have stored for

1179
01:03:44,520 --> 01:03:45,760
Speaker 16: your emergency fund as.

1180
01:03:45,640 --> 01:03:47,840
Speaker 8: Your deposit if you can.

1181
01:03:48,000 --> 01:03:51,000
Speaker 16: And I think maybe my last comment there on this

1182
01:03:51,720 --> 01:03:54,800
Speaker 16: Stephen is just make sure with the banks that this

1183
01:03:55,040 --> 01:03:57,880
Speaker 16: is if you pay the extra money into the bond

1184
01:03:57,960 --> 01:04:00,560
Speaker 16: as a deposit and it's more than what they're require,

1185
01:04:01,000 --> 01:04:03,800
Speaker 16: that you can draw out the extra money when when

1186
01:04:03,840 --> 01:04:05,760
Speaker 16: the world falls apart and you need that money for

1187
01:04:06,160 --> 01:04:07,400
Speaker 16: an emergency.

1188
01:04:07,960 --> 01:04:10,240
Speaker 2: Seven two, seven oh two one seven oh two. What

1189
01:04:10,400 --> 01:04:12,800
Speaker 2: did you learn when you bought a home for the

1190
01:04:12,840 --> 01:04:16,360
Speaker 2: first time that you didn't know before about finances? I

1191
01:04:16,440 --> 01:04:19,680
Speaker 2: don't mean check the outside loop. I do mean about finances.

1192
01:04:19,720 --> 01:04:23,280
Speaker 2: What did you learn through the process. The other thing is,

1193
01:04:23,640 --> 01:04:26,400
Speaker 2: and I mean I remember going through this, you need

1194
01:04:26,520 --> 01:04:28,960
Speaker 2: to know how much you can actually pay every month,

1195
01:04:29,000 --> 01:04:30,960
Speaker 2: and sometimes that can be quite hard to work out.

1196
01:04:33,440 --> 01:04:37,480
Speaker 16: Yeah, I mean certainly as a as a recovering property

1197
01:04:37,560 --> 01:04:39,440
Speaker 16: by this was the one that caught me out. I

1198
01:04:39,480 --> 01:04:42,600
Speaker 16: think I did very well understanding the upfront costs are

1199
01:04:42,680 --> 01:04:44,360
Speaker 16: and I had a nice emergency find out. I did

1200
01:04:44,400 --> 01:04:47,320
Speaker 16: put down a deposit, and then sort of by the

1201
01:04:47,400 --> 01:04:50,520
Speaker 16: second or third month of home ownership, I just realized,

1202
01:04:50,800 --> 01:04:52,760
Speaker 16: you know, that the money is so much tighter than

1203
01:04:52,800 --> 01:04:55,560
Speaker 16: I thought it would be, and I didn't really understand

1204
01:04:55,640 --> 01:04:56,280
Speaker 16: what was going on.

1205
01:04:57,240 --> 01:04:59,720
Speaker 8: And so just to think it through.

1206
01:05:00,080 --> 01:05:03,440
Speaker 16: The first thing is you've paid tax to sorrows on

1207
01:05:03,480 --> 01:05:06,480
Speaker 16: the transferred us. But now that you're a homeowner, you've

1208
01:05:06,520 --> 01:05:09,160
Speaker 16: got a new government body that's involved in your life

1209
01:05:09,200 --> 01:05:10,960
Speaker 16: and they don't go away for the rest of the

1210
01:05:11,040 --> 01:05:13,400
Speaker 16: time that you own a property, and that's called the

1211
01:05:13,480 --> 01:05:17,880
Speaker 16: local municipality because they want to charge you something called rates.

1212
01:05:18,120 --> 01:05:21,120
Speaker 16: And the reason they charge your rates is because they

1213
01:05:21,160 --> 01:05:25,440
Speaker 16: are going to provide services like sewerage access and refuse

1214
01:05:25,480 --> 01:05:29,240
Speaker 16: collection and all of those things. So for that they're

1215
01:05:29,280 --> 01:05:33,840
Speaker 16: going to charge you a monthly rate. And in certain areas,

1216
01:05:33,880 --> 01:05:36,680
Speaker 16: the Western Camp is one of them, those are going

1217
01:05:36,800 --> 01:05:39,880
Speaker 16: up fairly quickly, and so again you need to know that.

1218
01:05:40,320 --> 01:05:42,400
Speaker 16: You know, it's not just you know your monthly bond,

1219
01:05:42,480 --> 01:05:45,560
Speaker 16: it's now these rates, and you know year one, once

1220
01:05:45,640 --> 01:05:48,520
Speaker 16: you've done the homework, you might say, okay, well that's fine,

1221
01:05:48,560 --> 01:05:51,360
Speaker 16: I can pay the rates as there are now. But

1222
01:05:51,520 --> 01:05:55,080
Speaker 16: if those rates are going up faster than inflation, then

1223
01:05:55,160 --> 01:05:58,000
Speaker 16: you need to have an extra amount saved for the

1224
01:05:58,360 --> 01:06:00,920
Speaker 16: following year because these rates are only ever going to

1225
01:06:01,000 --> 01:06:05,760
Speaker 16: go up. And in addition to rates, if you live

1226
01:06:06,240 --> 01:06:08,160
Speaker 16: in an apartment or in an a state or a

1227
01:06:08,240 --> 01:06:10,880
Speaker 16: townhouse and you're part of a complex, then you're going

1228
01:06:10,920 --> 01:06:13,440
Speaker 16: to pay rates, and you're going to pay a levee,

1229
01:06:13,920 --> 01:06:16,240
Speaker 16: and that levee goes to the body corporate or the

1230
01:06:16,320 --> 01:06:19,960
Speaker 16: homeowners association. And the reason you're paying them is because

1231
01:06:20,040 --> 01:06:23,200
Speaker 16: they will have responsibility for certain parts of the building

1232
01:06:23,240 --> 01:06:26,040
Speaker 16: on the outside. So, for example, in an apartment block,

1233
01:06:26,760 --> 01:06:29,720
Speaker 16: the body corporate will be responsible for maintaining the roof

1234
01:06:29,880 --> 01:06:33,400
Speaker 16: and the building on the outside, and so you know

1235
01:06:33,520 --> 01:06:35,720
Speaker 16: every number of years they're going to paint that, they're

1236
01:06:35,800 --> 01:06:37,880
Speaker 16: going to have to redo the paving every now and then,

1237
01:06:38,080 --> 01:06:39,960
Speaker 16: and make sure the roof doesn't leak at all of

1238
01:06:40,000 --> 01:06:40,479
Speaker 16: those things.

1239
01:06:41,080 --> 01:06:42,080
Speaker 8: And so you pay.

1240
01:06:43,520 --> 01:06:45,760
Speaker 16: A levee to them as well. And that's not a

1241
01:06:45,840 --> 01:06:48,400
Speaker 16: negotiable thing. That's not something you can decide to pay

1242
01:06:48,520 --> 01:06:51,360
Speaker 16: or not. If you're an owner, that means you're a

1243
01:06:51,440 --> 01:06:54,240
Speaker 16: part owner of a whole building and you are expected

1244
01:06:54,280 --> 01:06:55,920
Speaker 16: to pay. And if you don't pay, you're going to

1245
01:06:56,000 --> 01:06:59,520
Speaker 16: get yourself into even deeper financial struggers than what you thought.

1246
01:06:59,840 --> 01:07:04,520
Speaker 16: So make sure that you pay these things because you've

1247
01:07:04,560 --> 01:07:06,800
Speaker 16: got to pay these This is not something you can

1248
01:07:06,920 --> 01:07:08,960
Speaker 16: just avoid or ask for a payment holiday.

1249
01:07:09,920 --> 01:07:12,880
Speaker 2: And I mean those can even when you've been living

1250
01:07:12,920 --> 01:07:14,880
Speaker 2: in a place for a little while, suddenly they can

1251
01:07:14,960 --> 01:07:17,800
Speaker 2: be increases. You know, you can want to boom off

1252
01:07:17,840 --> 01:07:20,560
Speaker 2: the area or something that can happen, or there's a

1253
01:07:20,640 --> 01:07:24,040
Speaker 2: regular cost or a community fund or something. Those things

1254
01:07:24,200 --> 01:07:25,880
Speaker 2: keep coming up. They don't just stop.

1255
01:07:27,920 --> 01:07:31,880
Speaker 16: Yeah, and it's often at the very worst time. I

1256
01:07:32,000 --> 01:07:38,720
Speaker 16: remember living in a body corporate where the trustees said, look,

1257
01:07:39,040 --> 01:07:42,720
Speaker 16: we've run out of money and we need to repaint

1258
01:07:42,800 --> 01:07:45,480
Speaker 16: the whole of the outside of the buildings, including the

1259
01:07:45,520 --> 01:07:49,560
Speaker 16: outside boundary walls, etc. They're in desperate need of paint.

1260
01:07:49,960 --> 01:07:53,520
Speaker 16: And so you know, yes, your normal monthly levees two thousand,

1261
01:07:53,960 --> 01:07:56,720
Speaker 16: but unfortunately for the next three years, we're going to

1262
01:07:56,840 --> 01:07:59,320
Speaker 16: charge you another two thousand, and that's called a special

1263
01:07:59,400 --> 01:08:02,160
Speaker 16: levee because they didn't budget for the stuff upront. So

1264
01:08:02,480 --> 01:08:05,400
Speaker 16: so now we need to paint and build up some

1265
01:08:05,480 --> 01:08:09,520
Speaker 16: money for those costs. And again it's not a negotiation.

1266
01:08:09,720 --> 01:08:12,920
Speaker 16: Once once the homeowners have decided and at a trustee

1267
01:08:13,000 --> 01:08:15,800
Speaker 16: level they're voted for this, it's a cost you have

1268
01:08:15,920 --> 01:08:16,240
Speaker 16: to pay.

1269
01:08:16,320 --> 01:08:17,840
Speaker 8: You have to share that burden.

1270
01:08:18,320 --> 01:08:21,320
Speaker 16: And so you know, maybe a good kind of tip

1271
01:08:21,400 --> 01:08:24,439
Speaker 16: for first time buyers is before you buy into a

1272
01:08:24,479 --> 01:08:27,479
Speaker 16: body corporate, ask them to give you the financials of

1273
01:08:27,520 --> 01:08:29,439
Speaker 16: that body corporate. You want to know that it's in

1274
01:08:29,479 --> 01:08:33,759
Speaker 16: a healthy financial position, that it's got some emergency reserves.

1275
01:08:34,040 --> 01:08:36,599
Speaker 16: Otherwise you're going to be part of the emergency reserves

1276
01:08:36,640 --> 01:08:38,599
Speaker 16: problem in the next month or year ahead.

1277
01:08:39,600 --> 01:08:42,559
Speaker 2: We have a question for you from a Titus. Warren

1278
01:08:43,240 --> 01:08:46,360
Speaker 2: Titus is asking, I'm thinking of stopping my hospital plan

1279
01:08:46,479 --> 01:08:49,679
Speaker 2: for health insurance because it's cheaper. Is this a good idea?

1280
01:08:49,880 --> 01:08:53,120
Speaker 2: It's such a wonderful question. This also what did you

1281
01:08:53,240 --> 01:08:55,200
Speaker 2: learn buying a home for the first time? Those seven

1282
01:08:55,240 --> 01:08:57,759
Speaker 2: two seven two one seven o two will no answer

1283
01:08:57,800 --> 01:08:59,840
Speaker 2: from Warren in just a moment. It's twelve minutes now.

1284
01:09:01,960 --> 01:09:04,519
Speaker 12: The Money Show still recurs is brought to you by

1285
01:09:04,640 --> 01:09:09,720
Speaker 12: Absolve Corporate and Investment Banking Balancing economic growth with ecosystems.

1286
01:09:10,040 --> 01:09:15,040
Speaker 12: That's how they've invested in your story. The Money Show

1287
01:09:15,360 --> 01:09:17,639
Speaker 12: Personal Finance with Warren Ingram.

1288
01:09:18,280 --> 01:09:21,000
Speaker 2: Well, your question, Warren from Titi something of stopping my

1289
01:09:21,080 --> 01:09:23,920
Speaker 2: hospital plan for health insurance because it's cheaper. Is that

1290
01:09:24,000 --> 01:09:25,920
Speaker 2: a good idea? I mean, people go back and forth

1291
01:09:26,000 --> 01:09:27,040
Speaker 2: on this question all the time.

1292
01:09:29,680 --> 01:09:34,080
Speaker 16: It's such a tricky one because I think it's for me,

1293
01:09:34,760 --> 01:09:37,519
Speaker 16: you know, intuitively, I would say the last thing I'm

1294
01:09:37,560 --> 01:09:41,640
Speaker 16: going to do is cancel my hospital plan. And the

1295
01:09:41,960 --> 01:09:45,760
Speaker 16: reason is because if I have an accident, I want

1296
01:09:45,840 --> 01:09:48,519
Speaker 16: to know that I can get care in a hospital

1297
01:09:48,640 --> 01:09:50,680
Speaker 16: immediately and that I will be covered for all of

1298
01:09:50,760 --> 01:09:53,640
Speaker 16: the expenses while I'm in the hospital, and you know

1299
01:09:53,720 --> 01:09:56,439
Speaker 16: that might include having to pay surgeons and specialists and

1300
01:09:56,479 --> 01:09:59,280
Speaker 16: all of that. And you know, hospital plans are not

1301
01:09:59,360 --> 01:10:01,920
Speaker 16: famous for all of the costs one hundred percent of

1302
01:10:01,960 --> 01:10:02,280
Speaker 16: the time.

1303
01:10:02,680 --> 01:10:04,760
Speaker 2: But what I will know with the hospital.

1304
01:10:04,439 --> 01:10:07,640
Speaker 16: Plan is that I'm largely covered for most of the expenses,

1305
01:10:08,240 --> 01:10:12,479
Speaker 16: and so almost my default answer is that I would

1306
01:10:12,520 --> 01:10:17,240
Speaker 16: be very scared to cancel a hospital plan. But one

1307
01:10:17,280 --> 01:10:18,840
Speaker 16: of the things to think about is, you know, health

1308
01:10:18,920 --> 01:10:23,000
Speaker 16: insurance it typically doesn't really cover much of what you

1309
01:10:23,040 --> 01:10:25,960
Speaker 16: would you know, much of the expenses when you are

1310
01:10:26,080 --> 01:10:28,920
Speaker 16: in hospital itself. What it does do is it helps

1311
01:10:28,960 --> 01:10:31,160
Speaker 16: you when you're going to the general practitioner and you

1312
01:10:31,240 --> 01:10:32,920
Speaker 16: know you need to go to the doctor because you're sick,

1313
01:10:32,960 --> 01:10:35,519
Speaker 16: and it covers you more for the things that happened

1314
01:10:35,560 --> 01:10:37,519
Speaker 16: to you day to day, when when you're not having

1315
01:10:37,560 --> 01:10:40,080
Speaker 16: an accident or something like that. So so for people

1316
01:10:40,160 --> 01:10:42,920
Speaker 16: that you know that maybe are you know, in a

1317
01:10:42,960 --> 01:10:45,200
Speaker 16: position where they've got a family and they end up

1318
01:10:45,240 --> 01:10:48,360
Speaker 16: at the doctor reasonably often, that you might find that

1319
01:10:49,000 --> 01:10:51,240
Speaker 16: you know, health insurance covers them a little bit more.

1320
01:10:51,800 --> 01:10:55,040
Speaker 16: But I think it's it is a tricky one because

1321
01:10:55,479 --> 01:10:57,679
Speaker 16: you know, those are expenses I mean, obviously you can't

1322
01:10:57,760 --> 01:11:00,880
Speaker 16: negotiate with the flu if you're if you're sick, you're

1323
01:11:00,920 --> 01:11:02,680
Speaker 16: sick and you need to go to the doctor. But

1324
01:11:03,080 --> 01:11:05,000
Speaker 16: at the same time, I think, you know, for me,

1325
01:11:05,120 --> 01:11:08,280
Speaker 16: I want to know I'm super well protected when I

1326
01:11:08,439 --> 01:11:10,479
Speaker 16: when I'm end up in real trouble and I need,

1327
01:11:10,680 --> 01:11:12,200
Speaker 16: you know, I need to go to hospital and be

1328
01:11:12,320 --> 01:11:15,760
Speaker 16: covered for that. So I mean, I almost want to say,

1329
01:11:15,880 --> 01:11:18,320
Speaker 16: you know, if you if you're looking at canning your

1330
01:11:18,360 --> 01:11:21,840
Speaker 16: hospital plan just to save money, you know, sometimes the

1331
01:11:22,160 --> 01:11:24,760
Speaker 16: health insurances or medical insurances are actually a little bit

1332
01:11:24,760 --> 01:11:27,439
Speaker 16: more expensive than a hospital plan, so so just be

1333
01:11:27,520 --> 01:11:29,720
Speaker 16: careful that you're making an assumption there titus that the

1334
01:11:29,760 --> 01:11:32,479
Speaker 16: one is cheaper than the other. And then you know,

1335
01:11:32,920 --> 01:11:35,280
Speaker 16: just be very clear that you know, if you cancel

1336
01:11:35,400 --> 01:11:38,519
Speaker 16: your hospital plan and you have an accident, you're going

1337
01:11:38,600 --> 01:11:40,840
Speaker 16: to to to a stat hospital. And there are some

1338
01:11:41,040 --> 01:11:44,200
Speaker 16: very good staut hospitals, but unfortunately there also lots that

1339
01:11:44,240 --> 01:11:46,400
Speaker 16: aren't that good. And and you know, is that the

1340
01:11:46,479 --> 01:11:49,000
Speaker 16: kind of risk you want to take with your potentially

1341
01:11:49,040 --> 01:11:51,480
Speaker 16: actually with your life without being too dramatic.

1342
01:11:51,400 --> 01:11:53,080
Speaker 2: No, sure, I mean you really do need to be

1343
01:11:53,240 --> 01:11:55,000
Speaker 2: very careful. You can have you know, you break a

1344
01:11:55,040 --> 01:11:57,599
Speaker 2: bone or something, there'll be long term consequences of things

1345
01:11:57,640 --> 01:12:00,920
Speaker 2: aren't sorted out properly. I wor we've got one or

1346
01:12:00,960 --> 01:12:03,760
Speaker 2: two questions, one or two comments coming through on seven

1347
01:12:03,840 --> 01:12:05,280
Speaker 2: two seven two one seven two.

1348
01:12:06,080 --> 01:12:09,760
Speaker 13: Hi, Stimmy, just ask where in let's say a two

1349
01:12:09,840 --> 01:12:15,559
Speaker 13: million bond house deposit of five hundred or you sign

1350
01:12:15,680 --> 01:12:18,760
Speaker 13: up the full two million and put a lamp somem

1351
01:12:19,000 --> 01:12:24,720
Speaker 13: of five hundred, is there a difference in terms of

1352
01:12:25,600 --> 01:12:32,719
Speaker 13: saving on the on the interest. Yeah, just wondering, Jimmy Mentra.

1353
01:12:33,240 --> 01:12:35,840
Speaker 2: Thanks Tomy. Warn't you I think this is about sort

1354
01:12:35,880 --> 01:12:39,920
Speaker 2: of investing five hundred thousand or is it about putting

1355
01:12:39,920 --> 01:12:40,559
Speaker 2: it into the bond?

1356
01:12:42,600 --> 01:12:44,599
Speaker 16: I love the question. So so I think if you're gonna,

1357
01:12:44,840 --> 01:12:48,040
Speaker 16: if you're gonna take the two million bonds, so you

1358
01:12:48,080 --> 01:12:50,479
Speaker 16: get one hundred percent bond and then sort of, you know,

1359
01:12:50,840 --> 01:12:53,640
Speaker 16: day five, you take your extra five hundred thousand and

1360
01:12:53,720 --> 01:12:55,320
Speaker 16: put it as a as a as a top up

1361
01:12:55,400 --> 01:12:58,040
Speaker 16: payment into the bond. So now you've got you know,

1362
01:12:58,520 --> 01:13:01,360
Speaker 16: a very big down payment as an additional amount that

1363
01:13:01,560 --> 01:13:05,120
Speaker 16: wasn't contractually required. It does give you a huge amount

1364
01:13:05,120 --> 01:13:08,160
Speaker 16: of flexibility. So number one, the amount that you owe

1365
01:13:08,240 --> 01:13:10,880
Speaker 16: is now only one and a half million, and so

1366
01:13:11,040 --> 01:13:13,920
Speaker 16: the interest that you're going to have to pay over

1367
01:13:13,960 --> 01:13:16,519
Speaker 16: the life of the bond is less. And then you

1368
01:13:16,600 --> 01:13:18,559
Speaker 16: get into that, you know, that position where you can

1369
01:13:18,640 --> 01:13:22,559
Speaker 16: either maintain the monthly amount on day one. So if

1370
01:13:22,560 --> 01:13:24,680
Speaker 16: they say to you on two million that it was,

1371
01:13:24,960 --> 01:13:27,800
Speaker 16: you know, for example, twenty thousand a month, you could say, well,

1372
01:13:28,320 --> 01:13:31,200
Speaker 16: even though I only now one and a half million,

1373
01:13:31,200 --> 01:13:33,439
Speaker 16: I'm going to keep paying twenty thousand a month. And

1374
01:13:33,640 --> 01:13:35,479
Speaker 16: you might find that you end up paying that bond

1375
01:13:35,560 --> 01:13:37,880
Speaker 16: off over a period of eight years or something, you know,

1376
01:13:37,960 --> 01:13:42,000
Speaker 16: not not twelve or not fifteen. Alternatively, you might put

1377
01:13:42,040 --> 01:13:45,160
Speaker 16: the five hundred thousand in and then get a lower

1378
01:13:45,560 --> 01:13:47,840
Speaker 16: interest in a lower payment, and then you decide I'm

1379
01:13:47,880 --> 01:13:50,560
Speaker 16: going to pay that minimum. So I think it's a

1380
01:13:50,640 --> 01:13:52,880
Speaker 16: nice idea. The one thing I would do is I

1381
01:13:52,920 --> 01:13:54,880
Speaker 16: would check with the bank. If you say to them,

1382
01:13:55,600 --> 01:13:57,719
Speaker 16: you know, this is a two million property, I'm willing

1383
01:13:57,800 --> 01:14:00,680
Speaker 16: to put in half a million upfront, what would be

1384
01:14:00,720 --> 01:14:03,559
Speaker 16: the interest rate you're going to charge me. Sometimes banks

1385
01:14:03,600 --> 01:14:06,880
Speaker 16: will actually view you as a better risk, and if

1386
01:14:06,920 --> 01:14:10,000
Speaker 16: you're a better risk, they might reduce the interest rates.

1387
01:14:10,000 --> 01:14:12,560
Speaker 16: So instead of charging you prime. They might say to you,

1388
01:14:12,920 --> 01:14:15,320
Speaker 16: will well charge you prime minus one if you put

1389
01:14:15,400 --> 01:14:19,160
Speaker 16: down a big upfront payment as well. Unfortunately, you can't

1390
01:14:19,240 --> 01:14:21,760
Speaker 16: access that money, so once it's in, it's in. So

1391
01:14:22,360 --> 01:14:25,240
Speaker 16: I prefer the flexibility of the first option of getting

1392
01:14:25,280 --> 01:14:27,000
Speaker 16: the two million bond and then you know, doing a

1393
01:14:27,040 --> 01:14:30,000
Speaker 16: five hundred thousand payment after that, but not at the

1394
01:14:30,040 --> 01:14:32,479
Speaker 16: expense of a very nice interest rate from the bank.

1395
01:14:33,400 --> 01:14:35,360
Speaker 2: You've really got to do a lot of longer term mats,

1396
01:14:35,520 --> 01:14:39,640
Speaker 2: all right. There's a big debate about deposits. So it

1397
01:14:39,840 --> 01:14:44,640
Speaker 2: sometimes depends on how where interest rates are. You're going

1398
01:14:44,680 --> 01:14:46,240
Speaker 2: to have to explain all of that to me because

1399
01:14:46,240 --> 01:14:47,800
Speaker 2: there are a lot of different variables here.

1400
01:14:50,120 --> 01:14:52,760
Speaker 16: So you know, I love the stock markets. Even so,

1401
01:14:53,840 --> 01:14:56,760
Speaker 16: if we use the stock market as the alternative, the

1402
01:14:56,840 --> 01:14:58,920
Speaker 16: thing you can do, the other thing that you can

1403
01:14:58,960 --> 01:15:01,920
Speaker 16: do with your money, that sends the ball for growing

1404
01:15:01,960 --> 01:15:04,760
Speaker 16: your wealth. We would expect the stock market, over long

1405
01:15:04,840 --> 01:15:07,680
Speaker 16: periods of time, to give us, let's say, ten or

1406
01:15:07,720 --> 01:15:11,320
Speaker 16: eleven percent a year over a ten or twenty year period.

1407
01:15:11,920 --> 01:15:14,200
Speaker 16: And so if someone says to me, well, I'm just

1408
01:15:14,240 --> 01:15:17,280
Speaker 16: going to pay the minimum on my bond and I'm

1409
01:15:17,320 --> 01:15:20,400
Speaker 16: going going to invest the balance. The first question I

1410
01:15:20,439 --> 01:15:22,479
Speaker 16: would ask as a follow up is what is the

1411
01:15:22,560 --> 01:15:25,479
Speaker 16: interest that you're paying on that bond, Because if the

1412
01:15:25,640 --> 01:15:29,280
Speaker 16: interest rate is eleven percent and you can expect to

1413
01:15:29,600 --> 01:15:31,880
Speaker 16: get a return of ten or eleven percent from the

1414
01:15:31,920 --> 01:15:35,360
Speaker 16: stock market, then then I'm going to question that decision

1415
01:15:35,520 --> 01:15:39,280
Speaker 16: because you know, if you pay extra money into a bond,

1416
01:15:39,960 --> 01:15:43,800
Speaker 16: I view that almost as a guaranteed return, which is

1417
01:15:43,880 --> 01:15:46,799
Speaker 16: tax free. It's almost like a guaranteed tax free investment

1418
01:15:47,200 --> 01:15:50,040
Speaker 16: because the more money you put into the bond at

1419
01:15:50,080 --> 01:15:54,120
Speaker 16: eleven percent, you're saving yourself that that interest that you

1420
01:15:54,280 --> 01:15:56,760
Speaker 16: have to pay, and so you know, if you turn

1421
01:15:56,800 --> 01:15:58,600
Speaker 16: it on its head, it's almost like you know, saying, well,

1422
01:15:58,600 --> 01:16:00,640
Speaker 16: I'm going to get, you know, a guaranteed saving of

1423
01:16:00,680 --> 01:16:03,280
Speaker 16: eleven percent, and I'm not paying tax on it. So

1424
01:16:03,960 --> 01:16:07,000
Speaker 16: I think then, you know, paying a big deposit when

1425
01:16:07,360 --> 01:16:10,639
Speaker 16: interest rates are very high makes a lot of sense

1426
01:16:10,680 --> 01:16:12,679
Speaker 16: to me, and paying as much as you can extra

1427
01:16:13,080 --> 01:16:16,120
Speaker 16: every month would make sense as well. But there are

1428
01:16:16,240 --> 01:16:18,000
Speaker 16: times that you know that I know, it doesn't feel

1429
01:16:18,040 --> 01:16:20,639
Speaker 16: like it anymore, but there are times when interest rates

1430
01:16:20,720 --> 01:16:23,720
Speaker 16: might only be eight percent, and then it becomes a

1431
01:16:23,760 --> 01:16:25,880
Speaker 16: little bit more tricky because you know, if you can

1432
01:16:25,960 --> 01:16:28,439
Speaker 16: get you know, three or four percent more than the

1433
01:16:28,800 --> 01:16:31,680
Speaker 16: interest you're paying from a stock market investment, perhaps you

1434
01:16:31,720 --> 01:16:33,800
Speaker 16: want to balance that to you and say, I'm going

1435
01:16:33,840 --> 01:16:36,400
Speaker 16: to put some extra into the into the bond, but

1436
01:16:36,840 --> 01:16:39,200
Speaker 16: the other portion I'm going to put into an investment

1437
01:16:39,240 --> 01:16:39,960
Speaker 16: for the long term.

1438
01:16:41,040 --> 01:16:42,840
Speaker 2: And I mean what you want to do also, I

1439
01:16:42,920 --> 01:16:44,760
Speaker 2: mean I know some people who just can't stand that,

1440
01:16:44,880 --> 01:16:46,600
Speaker 2: and I know some who are very comfortable with it.

1441
01:16:50,160 --> 01:16:53,040
Speaker 16: Yeah, I'm that guy, Stephen. I don't want to be

1442
01:16:53,120 --> 01:16:56,280
Speaker 16: told what to do by outsiders, So I don't want

1443
01:16:56,320 --> 01:16:58,439
Speaker 16: a bank to tell me, you know, that I owe them.

1444
01:16:58,520 --> 01:17:00,240
Speaker 16: So I'm going to pay off that debt is fast

1445
01:17:00,240 --> 01:17:02,200
Speaker 16: as I possibly can, so I can sleep at night,

1446
01:17:02,720 --> 01:17:05,960
Speaker 16: and so irrespectable the interest rate. I'm going to get

1447
01:17:06,000 --> 01:17:08,680
Speaker 16: that bond to zero as fast as I possibly can,

1448
01:17:08,800 --> 01:17:11,560
Speaker 16: and then save as much as I can and investments

1449
01:17:11,600 --> 01:17:14,439
Speaker 16: going forward. So that's a personal preference for me. But

1450
01:17:14,800 --> 01:17:16,640
Speaker 16: there are other people out there that would be very

1451
01:17:16,720 --> 01:17:19,439
Speaker 16: happy to have a bond for twenty years and would

1452
01:17:19,479 --> 01:17:22,479
Speaker 16: pay out, you know, pay the minimum or slightly more,

1453
01:17:23,120 --> 01:17:27,840
Speaker 16: and then invest alongside because they feel that's diversification. And

1454
01:17:28,120 --> 01:17:29,960
Speaker 16: I think the important thing about money is that you

1455
01:17:30,040 --> 01:17:32,479
Speaker 16: know there isn't always only one way to do everything.

1456
01:17:32,880 --> 01:17:34,800
Speaker 16: You have to match it to your personality as well.

1457
01:17:35,160 --> 01:17:37,800
Speaker 2: Warren Ingram, thank you so much, really to appreciate the

1458
01:17:38,240 --> 01:17:41,799
Speaker 2: co founder and certified financial planner at Galileo Capital.

1459
01:17:43,600 --> 01:17:46,200
Speaker 12: The Money Show the Encrus is brought to you by

1460
01:17:46,280 --> 01:17:51,360
Speaker 12: Absolve Corporate and investment backing Balancing economic growth with ecosystems.

1461
01:17:51,680 --> 01:17:54,240
Speaker 12: That's how they've invested in your story.

1462
01:17:56,360 --> 01:17:59,519
Speaker 2: Well, US market's turning positive tonight that our jurns up

1463
01:17:59,520 --> 01:18:02,160
Speaker 2: half of the the Nasty Cup point zero eight p

1464
01:18:02,280 --> 01:18:04,559
Speaker 2: s and P five hundred up point one P five

1465
01:18:05,120 --> 01:18:07,240
Speaker 2: Still love data to come through later in the week,

1466
01:18:07,320 --> 01:18:10,120
Speaker 2: so the story could I'm afraid still turn. We'll be

1467
01:18:10,200 --> 01:18:11,800
Speaker 2: back with you tomorrow. Good evening, eight o'clock