Speaker 1: And now The Money Show with Stephen credits on seven
Speaker 1: oh two. Let's walk at all.
Speaker 2: The Money Show with Stephen Curtis is brought to you
Speaker 2: by Absurd Corporate and Investment Bank, proud sponsor of the
Speaker 2: African Blockchain Report twenty twenty four. Good evening, Welcome to
Speaker 2: the program. I'm Stephen Curtis. Were plenty going on, of course,
Speaker 2: and just in the last hour or so confirmation now
Speaker 2: that the Prudential Authority is going to now appeal the
Speaker 2: ruling that really went in the favor of Sipol Patiana.
Speaker 2: You may recall that he was going to be the
Speaker 2: chair of Absbank. He was the only person that was
Speaker 2: in line, and then there were various claims against him.
Speaker 2: The judge eventually ruled in the case that what had
Speaker 2: happened was the Prudential Authority had sort of conducted an
Speaker 2: informal process and the reason that that is a problem
Speaker 2: is that he did not get a chance to reply.
Speaker 2: He had no right of reply in the process, and
Speaker 2: for that reason, what the court judgment eventually said was
Speaker 2: the prudential Authority was wrong to do it in that way.
Speaker 2: I'm not at awesome prize that there was going to
Speaker 2: be an appeal here because you kind of can see
Speaker 2: that the stakes are so incredibly high. Some of the
Speaker 2: people involved are very big names, people who've been around,
Speaker 2: people who have reputations to protect, and I have their
Speaker 2: reputation not want to protect them too. It does mean, though,
Speaker 2: and I mean taking on seper Patiana, you're going to
Speaker 2: know you're in a fight one way or another. But
Speaker 2: it does mean it's going to go on forever and
Speaker 2: ever and ever, and that I suspect is going to
Speaker 2: be a major, major issues, the kind of thing that
Speaker 2: can hang around your neck whether you're a bank, whether
Speaker 2: you're seeper Patiana, or whether you're the potential authority. So
Speaker 2: I think there might be some concerns around that. Talking
Speaker 2: of concerns, it seems the finance was seen Aguana a
Speaker 2: little worried about the idea of a sort of single
Speaker 2: holding company for state owned entities. We'll talk about that
Speaker 2: a bit more in a moment. And then news from
Speaker 2: Cherry the car company, the car manufacturer, that they're actually
Speaker 2: looking at making models here. You can understand some of
Speaker 2: the reasons I can think of reasons why they might
Speaker 2: choose not to, But we'll get into that in the
Speaker 2: next little while as well. I'm sure you've noticed this
Speaker 2: that over the last kind of fifteen years or so,
Speaker 2: maybe you, but a lot of people around you, if
Speaker 2: not you, yourself, were probably feeling a little bit poorer.
Speaker 2: And investors put out a big report looking at this.
Speaker 2: And we've known for quite a while actually that our
Speaker 2: economy has just not grown. I mean, how many times
Speaker 2: have you heard this conversation what it means now? Though
Speaker 2: then I thought this was very interesting because it goes
Speaker 2: to our sense of self as a country. Is that
Speaker 2: our average GDP per capita, in other words, how much
Speaker 2: money each person gets. So it's a total amount of
Speaker 2: GDP divided by the number of people in the country
Speaker 2: that is now quite a lot lower than the global average,
Speaker 2: and I mean significantly lower. Now we're often seen as
Speaker 2: a sort of upper income country. Lots of different ways
Speaker 2: to look at these things, and you can slice and
Speaker 2: dice the numbers anyway you want, but it may just
Speaker 2: reflect a little bit on how we see ourselves with
Speaker 2: this news that actually most people in South Africa are
Speaker 2: significantly poorer than the global average. And this gets straight
Speaker 2: to our conversations around inequality, of course, and how difficult
Speaker 2: some of those things are don't forget investment school tonight.
Speaker 2: And we thought that commodities being the hot issue, Copper
Speaker 2: prices spiking, gold still incredibly high, platinum suddenly sort of bouncing.
Speaker 2: It's a good moment to be talking about that, and
Speaker 2: that's what we'll be doing this evening. We'll be talking
Speaker 2: about how you ride the commodity cycle. And one of
Speaker 2: the strange things about it is that there are a
Speaker 2: couple of ways to get involved in the commodity cycle.
Speaker 2: You can buy gold, or you can buy shares in
Speaker 2: a gold miner. That's just one way of looking at it.
Speaker 2: The other way that you can look at it is
Speaker 2: that you can also decide there's no yield in this,
Speaker 2: You're not going to get dividends, and therefore you're just
Speaker 2: not going to invest there at all. So there's a
Speaker 2: lot to look at when it comes to that's a
Speaker 2: very interesting conversation actually looking forward to that. Love David
Speaker 2: Shapiro and Vincent Anthony Raja, so really top tier people
Speaker 2: on the Money Show this evening from seven thirty. Good
Speaker 2: to hear from you one A three seven, two one
Speaker 2: four four six o five six seven and seven two
Speaker 2: seven oh two one seven oh two. I do wonder
Speaker 2: if it matters to you where in the world your
Speaker 2: car is made. A conversations next that.
Speaker 3: Is on the Money Shows six to eight PM.
Speaker 2: One of the great sort of games, One of the
Speaker 2: great kind of conversations over the last a couple of
Speaker 2: months has been how many Chinese made or how many
Speaker 2: Chinese brand cars you see on our roads? This confirmation
Speaker 2: now that Cherry South Africa is in the second phase
Speaker 2: of the feasibility study that could see them making some
Speaker 2: of their cars. Heah. The car industry, of course, globally
Speaker 2: going through a series of transitions, moving away from fossil
Speaker 2: fuels to hybrid and electric cars, but also away from
Speaker 2: European and American vehicles to Chinese cars. George Mini is
Speaker 2: the CEO Auto Trader SA George, good evening, Good to
Speaker 2: talk to you again. We have a very well established
Speaker 2: car industry. We have particular government programs that incentifize this.
Speaker 2: Would it makes sense for Cherry to make some of
Speaker 2: their cars here, Hi.
Speaker 4: Stephen, and are great to be with you again and
Speaker 4: you're seven oh two listeners. Yes, it would make very
Speaker 4: much sense for Cherry to produce cars here. And the
Speaker 4: numbers speak for themselves, because you know, firstly, they would
Speaker 4: be able to sidestep the eighteen percent import tariff on
Speaker 4: importing cars into South Africa if they make them, yeah,
Speaker 4: or if even if they make a few of their
Speaker 4: variants in South Africa, they could offset import or su
Speaker 4: manufacturing credits against imports so that they pay less import
Speaker 4: tariffs into South Africa. So you know, the drivers really
Speaker 4: probably to lower costs and they've reached critical mass.
Speaker 2: I mean, that really is the issue. In the end,
Speaker 2: they're going to look at the numbers and suddenly government
Speaker 2: policy becomes very important in this.
Speaker 4: Exactly right, and the numbers are very very good for them.
Speaker 2: One of the big issues that has been our government
Speaker 2: policy towards electric and hybrid So we took a little
Speaker 2: while for there to be an actual policy on electric cars.
Speaker 2: If I recall, there are some actually big incentives on
Speaker 2: the table. If you're going to come and build a car,
Speaker 2: build a plant to build electric cars, government can probably
Speaker 2: make that worth your while.
Speaker 5: Yes.
Speaker 4: So the incentives, however, fall flat when it comes to
Speaker 4: the consumer. So from a manufacturing point of view, there
Speaker 4: are incentives in place, but from a consumer point of view,
Speaker 4: there aren't any incentives in place just yet. So yes,
Speaker 4: you're absolutely right. I think the biggest drawback from electric
Speaker 4: car point of view, particularly is the is the twenty
Speaker 4: five percent import tariff versus eighteen percent on internal combustion
Speaker 4: engine vehicles. And right now we can see that Cherry
Speaker 4: is bringing in internal combustion engine vehicles. Just on audit
Speaker 4: trator sites alone, we've seen a forty two percent increase
Speaker 4: in people looking at Cherries June last year versus June
Speaker 4: this year.
Speaker 2: That's a huge increase. I mean, what's their unique selling
Speaker 2: point here? And I'm presuming price is the major factor.
Speaker 4: Well, it's a little bit further than price even so
Speaker 4: I said is price, But you know, I think that
Speaker 4: Chinese vehicles are probably eighty percent the build quality. And
Speaker 4: I'm no manufacturer, but you know, I've driven a lot
Speaker 4: of cars, and my team are driven a lot of cars,
Speaker 4: and probably eighty percent of the build quality of a
Speaker 4: European or German vehicles at sixty percent of the price,
Speaker 4: and that delta of twenty percent is what adds value
Speaker 4: to the consumer.
Speaker 2: There's a series of transitions that we're seeing at the moment.
Speaker 2: Volkswagen says they can't make cars economically in Europe. China
Speaker 2: has a huge oversupply, huge over capacity of electric cars.
Speaker 2: Can we, as South Africa relatively small, open economy, et cetera,
Speaker 2: et cetera, et cetera, can we compete giving all of
Speaker 2: these transitions that are happening. In a way, it's probably
Speaker 2: China that we actually have to compete with.
Speaker 4: Yes, And I think it is China that we're going
Speaker 4: to have to compete with in the foreseeable future, because
Speaker 4: because they just have the volumes and they have the
Speaker 4: market to be able to do these things a scale,
Speaker 4: especially if they bring manufacturing plants to South Africa, they'd
Speaker 4: be able to increase that scale.
Speaker 2: I would imagine also the fact that we have people
Speaker 2: who've been building cars for many years. Some of them
Speaker 2: don't have jobs at the moment, but there are plenty
Speaker 2: of people with lots of experience in the sector, and
Speaker 2: that could be really quite useful.
Speaker 6: It could be very useful.
Speaker 4: I mean, many people look negatively on Chinese vehicles in
Speaker 4: the market, but you know, let's be honest. Their vehicles
Speaker 4: have gained momentum and they've gained a popularity. But besides
Speaker 4: popularity and momentum, they've also increased the quality of the cast. Yes,
Speaker 4: maybe not to German and European standards in terms of
Speaker 4: build quality, but the technology you get in the cars,
Speaker 4: the extras you get in the cast, they are a
Speaker 4: good cause at the end of the day, and they
Speaker 4: do meet the safety standards that are required to be
Speaker 4: in South Africa.
Speaker 2: George Minnie thanks very much. Indeed, CEO Auto Trader essay the.
Speaker 3: Money Show on seven oas Monday till Friday six to APM.
Speaker 2: It now appears the National Treasury and the Financements that
Speaker 2: have some serious concerns about plans to create one single
Speaker 2: holding company that would then house all of the state
Speaker 2: owned entities, all of the government companies that are in
Speaker 2: trouble all the time would be in one place. Parliament's
Speaker 2: looking at the National State Enterprises Bill, but it seems
Speaker 2: got Iguandero's concern this model could increase the scope for
Speaker 2: political interference. Do I need to spill out to you
Speaker 2: what that could mean? Caya Satola is an independent political analyst.
Speaker 2: Kaya Good Evening. Is a minister right to be worried?
Speaker 2: Good Evening?
Speaker 5: Yes it is.
Speaker 7: And the reason the minister has to be worried is
Speaker 7: that when you look at the history we were supposed
Speaker 7: to doom. It was supposed to correct the sins of
Speaker 7: the part where different strategically important enterprises had indeed been
Speaker 7: captured political process in the sense that it was the
Speaker 7: politicians who determined who needed to go then as AI
Speaker 7: and forminating a new model who was to be able
Speaker 7: to break away from that political alliance, which really meant
Speaker 7: that any minister could decide what the fate of a
Speaker 7: particular entity would do. The problem with the new proposal
Speaker 7: is that it's simply.
Speaker 5: The president.
Speaker 7: Obviously, it's probably going to delegate some of those powers
Speaker 7: to decide who should go away, So it doesn't really
Speaker 7: solve the ultimate issue of how do you break the
Speaker 7: link between the political principles.
Speaker 2: All right, Chilestole, I'm sorry we do seem to be
Speaker 2: losing you on that. Unfortunately, it is an important story
Speaker 2: and it is something that we want to talk about.
Speaker 2: So sorry about that does seem to be a little
Speaker 2: bit of a problem with that line. We had been
Speaker 2: battling with them earlier in fact, to get them on
Speaker 2: that line, and just to continue with that conversation. We'll
Speaker 2: try and get a better line for you, because there
Speaker 2: is so much to talk about when it comes to
Speaker 2: these issues. So yep, we'll speak to Kayastole as we
Speaker 2: move through the program.
Speaker 3: This evening The Lonely Show with Stephen Krutiz Lion on
Speaker 3: ninety two point seven and one six FM streaming on
Speaker 3: the Prime Media.
Speaker 1: Plus NAP and DStv channel eight five six.
Speaker 2: Well, there's been a fascinating series of developments in the
Speaker 2: United States. We've seen in video go past four trillion
Speaker 2: dollars in valuation yeares today. At the same time, a
Speaker 2: report on Bloomberg Today that Meta hired a person called
Speaker 2: Roming Pang from Apple at a price of two hundred
Speaker 2: million dollars. Essentially, they decided this one person was worth
Speaker 2: two hundred million dollars to their company. Apple, according to
Speaker 2: the Bloomberg report, decided not to counter. They didn't try
Speaker 2: and say that to Pang, stay with us and we'll
Speaker 2: pay you more, because they felt the only other person
Speaker 2: who gets anything close to that is their CEO, Tim Cook.
Speaker 2: And this is all about artificial intelligence. It just shows
Speaker 2: you how much money is being thrown in that direction.
Speaker 2: The thing this person can do is all about artificial intelligence,
Speaker 2: and in video of course is all about that as well.
Speaker 2: And it does just show you despite everything that's happening
Speaker 2: in the US, despite all of the concerns around tariff's,
Speaker 2: despite all of that, the money is going into one
Speaker 2: thing at the moment, and it's going into that one
Speaker 2: thing because people are making a big, big bet on
Speaker 2: the future. But it also suggests something else to me.
Speaker 2: It suggests, and this is obvious, that the competitive edge.
Speaker 2: In other words, if you're better by just half a percent,
Speaker 2: the amount of money you will make will be absolutely huge,
Speaker 2: and that presumably is what's really going into these massive
Speaker 2: pay packets for AI programmers. It really is an astonishing thing.
Speaker 2: Just one to other point to make about these investors.
Speaker 2: They better be right. The money show of Governor's portfolio
Speaker 2: manager at rand Swiss Viv good evening and a lot
Speaker 2: going on around in video four trillion dollars. Yesay is
Speaker 2: looking at the example of one person being offered two
Speaker 2: hundred million dollars that's million and dollars one hundred in
Speaker 2: the same sentence just to go and work for Meta.
Speaker 2: This is astonishing how much money is still flowing in
Speaker 2: that direction.
Speaker 8: Yeah, I mean I think it's even more than that actually,
Speaker 8: because I think the deal that that is offering people
Speaker 8: is something like one hundred million dollars to sign up
Speaker 8: one hundred million dollars salary that three hundred million dollar
Speaker 8: potential bonus pool per year, so effectively the year, but
Speaker 8: a person could make as much as a half of
Speaker 8: billion dollars. So these are the plays that we're talking
Speaker 8: about that are unbelievable, but like you said, it has
Speaker 8: to pay off. Remember Meta did something similar with the
Speaker 8: Metaverse in which they were burning tens of billions of dollars,
Speaker 8: which even the hundreds of millions on one hundred million
Speaker 8: dollars only one percent of ten billion dollars, and they
Speaker 8: were bringing multiple tens of billions of dollars, and then
Speaker 8: Marks decided eventually, no, it wasn't worth it. Any kind
Speaker 8: of shout that project. You even had about a Metaverse
Speaker 8: for a while. This is the kind of power you
Speaker 8: have if you are the guy with the super voting
Speaker 8: rights at a multi trillion dollar company. But in this case,
Speaker 8: I think he's not the only one going for it,
Speaker 8: ILike with the Metabords where he was pretty much mine alone.
Speaker 8: Kind of get to VR off the ground like that.
Speaker 8: Here we have you know, Glock for just came out
Speaker 8: for Melon Mask. We have. Of course, what's happening with
Speaker 8: you know, Apple, not Apple fory with the Microsoft and
Speaker 8: open Ai, et cetera. Actually, Apple, strangely enough, is probably
Speaker 8: the one company that is the least you know, bullish
Speaker 8: on AI. It would seem at the moment.
Speaker 2: It's fascinating to watch it all play out, but there's
Speaker 2: just huge amounts of money that are going in there,
Speaker 2: and copper prices up, some of them up very strongly.
Speaker 2: The fifty percent tariff that the US President Donald Trump
Speaker 2: has been talking about did help some mining companies that
Speaker 2: have listings here, but that really still is the thing
Speaker 2: driving some parts of the markets at the moment.
Speaker 5: Yeah.
Speaker 8: Look, I mean the thing with copper is that if
Speaker 8: AI does turn out to be a reality, firstly, you
Speaker 8: would probably need a lot more copper, and I think
Speaker 8: people don't realize just how advanced with the stuff is.
Speaker 8: For instance, a way more the self driving taxi company,
Speaker 8: which is on by Google, has done about ten million rides.
Speaker 8: Over ten million rides, it's fact patrol rides in the US,
Speaker 8: and that means basically, at the moment it's pretty much
Speaker 8: a solved problem. You could get a say like Joe
Speaker 8: Burg or Durban or Cape Town and replace. You know,
Speaker 8: taxis talk about the taxi clubs with the self driving vehicles,
Speaker 8: and if that's the case, I mean the disruption to
Speaker 8: the globe will be insane. And the two things to
Speaker 8: note here is that these cars work basically electric, so
Speaker 8: therefore copper demand for electric vehicles is quite significant, significantly
Speaker 8: more than for a fossil fuel during vehicle.
Speaker 9: And the second thing is if you need electric.
Speaker 8: Vehicles, you need to have the road to basically get
Speaker 8: the lexity to the vehicle, which is also a more
Speaker 8: demand for copper. So which we slice it, the demand
Speaker 8: for copper is likely to saw dramatically over the next
Speaker 8: few years. If AI does take off in the way
Speaker 8: people think.
Speaker 2: It's will still doesn't explain where Trump why Trump suddenly,
Speaker 2: almost out of nowhere, said that he was going to
Speaker 2: do this. I mean, it's it's a very strange. So
Speaker 2: I mean that that's not the only sort of tariff
Speaker 2: news at the moment. Brazil is getting a tariff of
Speaker 2: fifty percent. Trump's explicitly tied that to the fate of
Speaker 2: the former president Jay bel Scenario, who faces criminal charges
Speaker 2: for trying to ferment a queue. That's the claim against him.
Speaker 2: And we now have a situation where the person in
Speaker 2: the White House is not just implementing tariffs, but it's
Speaker 2: tying it to political objectives explicitly with regard to Brazil,
Speaker 2: but not with regard to US. This becomes an impossible
Speaker 2: situation for other countries to manage.
Speaker 5: Yeah.
Speaker 8: Look, I mean the one thing that we might see
Speaker 8: abous is the tuckle trade, which is Trump always chickens out,
Speaker 8: and I think if he does put in place once
Speaker 8: it's the last chide of a popper. Eventually a digital
Speaker 8: company would say this is ridiculous. We can't basically hope
Speaker 8: to have a good that the operation with the electrical
Speaker 8: electical demands that you could have in the future would
Speaker 8: be kind of huge class in place. I think the
Speaker 8: pasty has done that. I mean he's just stepped backwards.
Speaker 8: It's with the fob workers with security. But said, you know,
Speaker 8: this is impossible that he did have a step back
Speaker 8: on down. So I think he's probably going to have
Speaker 8: to adjust his demand or his idea around copper talents
Speaker 8: because I mean, people don't realize this, but China, for instance,
Speaker 8: is adding the entire US capacity every few years to
Speaker 8: their grid, and he's taken a huge leap in terms
Speaker 8: of energy production, and the US is not just basically
Speaker 8: you know, stable in terms of what's happening, it's fully
Speaker 8: significantly be had what the Chinese are doing at the moment.
Speaker 8: So yeah, I think he's going to have to change that.
Speaker 8: With regards to this intervention, with the jival startup, thet
Speaker 8: the registration has taken a rather strong view and a
Speaker 8: couple of things. I mean, they've taken a view on,
Speaker 8: for instance, the AfD Incholas in Germany, which is the
Speaker 8: dicty party Germy. They've taken their stouts on, for instance,
Speaker 8: the elections at all media, et cetera. And I think
Speaker 8: this is just a step for that. The only positive
Speaker 8: thing here, a get is that they haven't made willing
Speaker 8: to back that up with any kind of real force,
Speaker 8: either Germany or in place electro media. Maybe Bizil might
Speaker 8: be different because it's not part of the EU and
Speaker 8: part of a bigger group that might protected. But generally,
Speaker 8: like I think the tackle Traid, like I said, top
Speaker 8: always chickens out might come be to play yet again, and.
Speaker 2: Then earning season beginning, I suppose so ready next week,
Speaker 2: maybe maybe even tomorrow, it's going to be very interesting
Speaker 2: to see US atherfan companies are doing at the moment.
Speaker 5: Yeah.
Speaker 8: Look, I mean because what it comes to adding season. Uh,
Speaker 8: the number one to any company calls about is is
Speaker 8: order early. So you can look at the back row,
Speaker 8: you can look at the trends or whatever, but it
Speaker 8: comes down to it, the company itself has to make
Speaker 8: the money, and we are going to be seeing just
Speaker 8: what the impact is going to be, uh, you know
Speaker 8: on the the largest a lot of talents and certainty
Speaker 8: for some of these companies out there. Also, we're going
Speaker 8: to be seeing what kind of numbers these are you know,
Speaker 8: chech companies be pulling that out because realer the check
Speaker 8: you know, RUT has been significantly stronger than the overall market.
Speaker 8: It's what the reason the US has outperformed in the
Speaker 8: last couple of years. So we need to be seeing
Speaker 8: some of these you know, chech companies pre kind of
Speaker 8: profits that you know, justify these higher prices. So, yeah,
Speaker 8: it's gonna be a very interesting a couple of weeks,
Speaker 8: next couple of weeks out of the US and other
Speaker 8: parts of the world as well.
Speaker 2: Viv Governor, thanks very much. Indeed, portfolio manager at ran
Speaker 2: Swiss Ready to appreciate the time. Coming up in the
Speaker 2: next little while, we'll speak to the CEO at INVESTEC
Speaker 2: Bank Commission Middler about why it is that you are
Speaker 2: right when you think you're feeling poorer than you were
Speaker 2: fifteen years ago. That's the coming with the Money Show.
Speaker 2: It's just gone six thirty.
Speaker 10: The Money Show with Stephen Krutez is brought to you
Speaker 10: by Apps of Corporate and Investment Bank crowd sponsor of
Speaker 10: the African Blockchain Report twenty twenty four.
Speaker 2: We'll get to hear from you this evening on double one,
Speaker 2: double A three oh seven two and two one four, four, six,
Speaker 2: five sixty seven. It seems the business sector is the
Speaker 2: only part of the country that is not commenting at
Speaker 2: this stage. I mean, I wouldn't be surprised if we
Speaker 2: get there about the unbelievable revelations that came from the
Speaker 2: Quasilla Natel Provincial Police Commissioner in Clantlam Quanazi over the weekend,
Speaker 2: the claims he made against the policemanister. Since you know,
Speaker 2: I'm sure you've been following it, it's incredibly important. Then
Speaker 2: what's really required is going to be some kind of
Speaker 2: I think quite assertive action. I was struck today by
Speaker 2: the President announcing on Thursday, that's today, that he will
Speaker 2: make a step into the nation on Sunday. Now struck
Speaker 2: for several reasons. One is, any decision you make between
Speaker 2: now and then is so likely to be leaked. But
Speaker 2: also if you've got different people in different parts of
Speaker 2: our criminal justice system who clearly, it seems, almost at
Speaker 2: each other's throats, I don't know if you wait for
Speaker 2: four days and say that in four days time you
Speaker 2: will act, Because someone somewhere is going to think they're
Speaker 2: about to lose their job, and the risk of that
Speaker 2: is that this forces them or tempts them into some
Speaker 2: kind of extreme action. I don't get me wrong. I'm
Speaker 2: not saying, based on this person or that person, this
Speaker 2: is what they're going to do. I'm just saying, I
Speaker 2: don't know if it's such a wise idea. I realize
Speaker 2: that the Presidency's probably done this to take some of
Speaker 2: the heat off everybody's saying the president must act for
Speaker 2: the good of the economy. The president must act. But
Speaker 2: to sort of say I'm acting but only on Sunday,
Speaker 2: I think might actually create more trouble for you, for
Speaker 2: you don't think it's necessarily such a good idea. It's
Speaker 2: a very very important story. Ewn, as you know, is
Speaker 2: on it Money Show with seven Cruis. You have had
Speaker 2: plenty of conversations over the last little while about our
Speaker 2: lack of economic growth. More evidence now actually that our
Speaker 2: lack of growth since around twenty ten means our population
Speaker 2: is now poorer, quite a lot poorer than the global average.
Speaker 2: And you study by investic wealth and by investing Wealth
Speaker 2: and Investment International, suggesting our GDP per capital capital is
Speaker 2: now just over fifteen thousand dollars. That's compared with the
Speaker 2: global average of just under twenty three thousand dollars. Commercial
Speaker 2: Middler is the CEO of invest Bank Commsha good evening.
Speaker 2: I do appreciate that time. It's a really important topic.
Speaker 2: Our economy has clearly fallen behind and that seems to
Speaker 2: have made us all poorer and actually quite a lot
Speaker 2: poorer than the global average. I mean, this gets to
Speaker 2: the heart of how we see ourselves in South Africa.
Speaker 6: Thanks Steven, and thanks for the chat. I think absolutely.
Speaker 11: I think from a South African perspective, what you've realized
Speaker 11: is that after fifteen years of sluggish growth, you're really
Speaker 11: sitting at a situation where compared to your global counterparts,
Speaker 11: you've had a forty percent decline in GDP per capita
Speaker 11: relative to global averages. So that's coming out of a
Speaker 11: period really from if you look at it, between nineteen
Speaker 11: ninety and twenty ten, nominal.
Speaker 6: GDP capita in South Africa.
Speaker 11: Moved in line with the average nominal GDP per capita globally,
Speaker 11: and then from twenty ten you saw a stock dislocation
Speaker 11: between the two. And really, ultimately, as I've said, you
Speaker 11: look back at twenty twenty three and it's forty percent
Speaker 11: lower than the global average. So that is when you've
Speaker 11: had an economy growing at an average of about one
Speaker 11: point three GDP growth per year in the last fifteen years.
Speaker 11: So that really does set the path ahead and the
Speaker 11: urgency that we've got to get GDP growth up to
Speaker 11: create an inclusive economic story for South Africa.
Speaker 2: It can feel sometimes that we're locked in this path.
Speaker 2: Fifteen years basically of going backwards is a long time.
Speaker 2: People still seem to be stuck in old habits, old views,
Speaker 2: if I can use that phrase of looking at the economy,
Speaker 2: and the longer we are trapped like this, perhaps the
Speaker 2: harder it is to break out of it.
Speaker 11: I agree with you but that it is harder to
Speaker 11: break out of it. But I do take some level
Speaker 11: of comfort from a few key factors, Stephen. The one
Speaker 11: thing is, firstly, we were in a lower inforation rate
Speaker 11: environment and we've certainly seen the benefits of that. So
Speaker 11: with inflation being well contained within the midpoint of the
Speaker 11: Central banks monetary policy target is the one point i'd make.
Speaker 11: The second is we've seen a level of interest rate
Speaker 11: cuts over the last eight to nine months, and you know,
Speaker 11: the NPC meets again at the end of this month,
Speaker 11: and obviously the jury's artist to what that decision would be.
Speaker 11: What does potentially cost some shadow over it, which I
Speaker 11: think came up in your show a bit earlier, is
Speaker 11: the fact that obviously were sitting with trade tariffs now
Speaker 11: being imposed by the US and what the impact of
Speaker 11: that would be. So it could be that you sit
Speaker 11: with a more cautious approach from a manatory policy perspective,
Speaker 11: but certainly we're generally operating in an interest rate a
Speaker 11: more interest rate benign potentially cutting environment at the moment.
Speaker 11: And then also you've seen the rand being relatively steady
Speaker 11: and perhaps more on the back of dollar weakness, but
Speaker 11: are rounded under eighteen rand generally better than one would
Speaker 11: have expected. So with that said, they are a few
Speaker 11: key factors. And also I think when we look at
Speaker 11: some of the structural reforms in South Africa, as much
Speaker 11: as we know there's a long road ahead, we are
Speaker 11: seeing some positive momentum in areas like energy. We've certainly
Speaker 11: seen to a large extent the back of the s
Speaker 11: COM crisis, as much as there's still a lot of
Speaker 11: work to be done. And I don't think we're completely
Speaker 11: out of the words, but if we spoke two years ago,
Speaker 11: that would have been a very different discussion. And some
Speaker 11: work in logistics around rail ports, which seems to be
Speaker 11: moving in the right direction. But when looking at the
Speaker 11: pace of it and having regard for the lack of
Speaker 11: GDP growth and the sluggishness, you realize the one thing
Speaker 11: that comes to mind, Stephen, is there's just one phrase,
Speaker 11: speed of execution.
Speaker 2: Keeps coming back to that. You also make the point
Speaker 2: that gross fixed capital formation has not happen quickly enough.
Speaker 2: Basically we haven't been building enough infrastructure. I will see
Speaker 2: that on my drive home.
Speaker 7: Is that really?
Speaker 2: I mean, do we point to that and say that's
Speaker 2: a failure of government.
Speaker 11: I think I think the I would link to a
Speaker 11: couple of things. One do you think and you know
Speaker 11: you talk about your drive home. I think one of
Speaker 11: the key concerns we certainly have is local government in
Speaker 11: South Africa and failing municipalities. And I think as you
Speaker 11: talk about just living in Johannesburg in the last week,
Speaker 11: you know, many people, including myself, you had a situation
Speaker 11: we didn't at running water at time. Now some of
Speaker 11: us off the back of actual reinvestment in infrastructure, but
Speaker 11: some of it's off the back of very poor, increasing
Speaker 11: infrastructure that's not being Plus, you've seen, you know, the
Speaker 11: impact on traffic large You've seen a lot of deterioration
Speaker 11: in basic what I would call call the one or
Speaker 11: one of city infrastructure.
Speaker 6: I think that needs a lot more urgent attention.
Speaker 11: I do take a level of comfort from the fact
Speaker 11: that the Presidency has, through Operation Wiolendela, now set up
Speaker 11: a new working group to focus on local government and
Speaker 11: again we need to get that happening. I am concerned
Speaker 11: that the disconnect that continues to grownd basic services. Often
Speaker 11: when there is an electricity issue at the moment, it's
Speaker 11: not as results of potential s com failure, but a
Speaker 11: lack of what's happening from a distribution perspective of electricity
Speaker 11: at local government level, so you know, little substations that
Speaker 11: are not or not little substations that are not working,
Speaker 11: infrastructure that's failing. So local government is a very key
Speaker 11: priority in that you get the right approach. Coming back
Speaker 11: to some of your debate, the key issue is investment
Speaker 11: confidence and business confidence. And I think that generally, as
Speaker 11: much as generally fixed catal formation, a significant amount comes
Speaker 11: from the private sector that it is led often by
Speaker 11: government infrastructure spend. And we've got to start seeing these
Speaker 11: larger projects come to light and coming to effect. And
Speaker 11: I think you know that in the current budget the
Speaker 11: Finance Minister has allocated a trillion RAN for infrastructure over
Speaker 11: the next three years. The sooner we can get those
Speaker 11: projects moving in the right direction.
Speaker 6: Believe that all.
Speaker 11: Boost business confidence, which then boosts fixed capital investment and
Speaker 11: fixed capital formation.
Speaker 2: Back to the political promise that will turn the nation
Speaker 2: into a construction site, I mean, I hope that it
Speaker 2: happens this time. We had a new round of tariffs
Speaker 2: announced by President Trump earlier in the week thirty percent
Speaker 2: for us, there's so much to it. Personally, I'm not
Speaker 2: convinced it'll be thirty percent in the end, but the
Speaker 2: uncertainty makes it harder for the world to grow, and
Speaker 2: when we're trying to get out of this sort of
Speaker 2: no growth trap, I imagine it makes our life quite
Speaker 2: a lot harder too.
Speaker 5: It really does.
Speaker 6: And I think Stephen the couple of things.
Speaker 11: One is that the debate and I think the US
Speaker 11: have indicated they're open for further engagement, and I think
Speaker 11: they've set a window now, and we understand this is
Speaker 11: a hard deadline and not like some of the softer
Speaker 11: deadlines we've seen to date in the stir of debate.
Speaker 11: The hard deadline, I understand is the first of August.
Speaker 11: So effectively, you know, we at the tenth of July.
Speaker 11: We've got three three weeks from a South African perspective,
Speaker 11: to hopefully engage the US trade counterparties and reach some
Speaker 11: sort of trade agreement, which is more beneficial at thirty
Speaker 11: percent at is punitive. And there are a number of
Speaker 11: key sectors that are impacted, particularly particularly around motor industry
Speaker 11: and agriculture. So I think the key sectors that are
Speaker 11: impacted and there will certainly be secondary impacts to that.
Speaker 11: The second aspect would be that we able to negotiate
Speaker 11: a trade deal which also creates the opportunity for South Africa,
Speaker 11: for example, to consider. I know one of the key
Speaker 11: issues is US gas as a potential supply to South Africa.
Speaker 11: So potentially could there be still a lot more done
Speaker 11: in the space. I think they could be, But the
Speaker 11: next three weeks are going to be the most imperative
Speaker 11: and one would hope that we were putting our best
Speaker 11: approach and best team forward to be able to negotiate
Speaker 11: that for us.
Speaker 2: Commish, thank you so much really to appreciate the time,
Speaker 2: as I say, such an important topic. Commission Middler is
Speaker 2: the CEO at investig Bank.
Speaker 3: The Money Show on seven see Monday till Friday six
Speaker 3: to a pm.
Speaker 2: Well, so much of the time on the Money Show
Speaker 2: you'll hear conversations that at their roots are really trying
Speaker 2: to sort of boost your return. They're trying to make
Speaker 2: sure that you get as much money as you can
Speaker 2: make it as sustainably as possible. But money can also
Speaker 2: be used in other ways. It can be invested in
Speaker 2: a way to have other impact. And what I'm talking
Speaker 2: about is often called impact investing. Glad when Liu is
Speaker 2: the CEO at E Squared, it's an impact investor. Glad
Speaker 2: when good evening, you've actually been in this game a
Speaker 2: little while. How would you define impact investing? Obviously different
Speaker 2: from normal investing?
Speaker 9: How d Stephen thank you for having your thank you
Speaker 9: for having me on your show, and good evening to
Speaker 9: you or your listeners. How would I define impact investing?
Speaker 4: Or the best way to describe it is we.
Speaker 8: Want to do good while doing well.
Speaker 9: We want to invest in in the early stages of
Speaker 9: where businesses are formed and essentially harnessed in order to
Speaker 9: build those big businesses that will eventually become the engine,
Speaker 9: the driver by economy.
Speaker 2: When you look at your returns, do you assess them
Speaker 2: in the sort of normal way or do you include
Speaker 2: other criteria?
Speaker 4: Is it?
Speaker 2: I mean, it's not just about a return, but you
Speaker 2: now have a lot of other criteria you need to include.
Speaker 4: So we look at the returns.
Speaker 9: We aren't invested in business at our core, but we
Speaker 9: do look at as a return. So we look at
Speaker 9: transformation in the form of more equitable distribution, investing in
Speaker 9: black and female founders. We look at job creation. We
Speaker 9: look at industries that are the impacting. So, for instance,
Speaker 9: from our portfolio perspective, we're more invested on the ed tech,
Speaker 9: health stick and infrastructure side of things.
Speaker 2: I presume men, that you get to know those sectors
Speaker 2: really quite well, you kind of know what's cooking there,
Speaker 2: and you become a specialist in it.
Speaker 9: So the thing about the SQUED is the industry agnostic
Speaker 9: primarily because though when Eastford was set.
Speaker 4: Up by.
Speaker 9: Mister Gray Allen Ray is the man in two thousand
Speaker 9: and seven, he set it up to invest in primarily
Speaker 9: beneficialies of the Allen Gray Orbust Foundation and also to
Speaker 9: benefit nonprofit companies that have public benefit organization status. And
Speaker 9: so therefore we would we wouldn't be able to determine
Speaker 9: what businesses these Allen grade fellows would go into. However,
Speaker 9: we've since diversified, so we are industry agnostic and say
Speaker 9: se agnostics. So we see a lot of different industries
Speaker 9: and we now are trying to use that data to
Speaker 9: further inform how we construct our portfolio.
Speaker 2: Does your investment approach have a little bit more risk?
Speaker 2: There's a lot more to take into account. It's not
Speaker 2: just about money. You also perhaps need to be a
Speaker 2: little bit more what's the right English work lad adventurous
Speaker 2: with what you decide to invest in, And does that
Speaker 2: automatically mean it comes with a little bit more risk?
Speaker 10: It does?
Speaker 9: It does come with a lot more risk, and we
Speaker 9: are very benefit. We're really we've benefited from the way
Speaker 9: and then very set up in the business. So in
Speaker 9: two thousand and seven he sold a minority equity take
Speaker 9: in Alan Gray, the asset manager, to Easquad. It is
Speaker 9: funded by a South African financial services institution into a TODUSK.
Speaker 9: What then happens is each fat benefits from as long
Speaker 9: as Alan Gray continues to do well, we benefit from
Speaker 9: dividends and therefore our funds and the management keeps growing.
Speaker 9: Why that's important is we can take a lot more
Speaker 9: risk because we don't have shareholders or limited partners sitting
Speaker 9: waiting for a financial return, and so we can essentially
Speaker 9: try to take a lot more risk because we've grown
Speaker 9: out the assets under our care and we able to.
Speaker 9: How can I say accept a lot more risks because
Speaker 9: you're not dealing with patient fund money or other people's money.
Speaker 2: So does that mean then, I mean, does that have
Speaker 2: a material impact on your return over time. I mean
Speaker 2: if you have if you have just one percent more
Speaker 2: risk over ten years across your entire portfolio, that that
Speaker 2: would have an.
Speaker 9: Impact, would have an impact. We've i guess, in the
Speaker 9: in the in the venture capital space, and like you
Speaker 9: said in the question before, this sometimes been known as
Speaker 9: adventure capital. And so what you start to see in
Speaker 9: this space is we take a lot more resk be
Speaker 9: invested at the pceed very early stage of the business
Speaker 9: life cycle when the businesses are their concept, proof of concept,
Speaker 9: in that validation phase. But then we also are investing
Speaker 9: at the small cap private equity. So on the balance
Speaker 9: of things, we've had a really good return. So we've
Speaker 9: got a forty two percent fair market value growth in
Speaker 9: our assets under management. But like my chap, my X
Speaker 9: chairperson used to say, safe market value is like beauties
Speaker 9: in the eye of the beholder, and so but we've
Speaker 9: also been able to get real returns. So we've been
Speaker 9: able from the five hundred art million that we've put
Speaker 9: into commercial investments, we've returned about one hundred million.
Speaker 2: All of this, I mean, you must see sectors change
Speaker 2: if you're putting money into certain places. I know you
Speaker 2: say your industry agnostic but you'll be able to also
Speaker 2: monitor companies going from very little to something much bigger,
Speaker 2: to beginning to stand on their own two feet without you.
Speaker 9: Yes, yes we have. We've been able to see that
Speaker 9: in the green space, infrastructure. We've been able to see that,
Speaker 9: like in the ethics space as well, because we're you know,
Speaker 9: we've seen students start three D printing companies. We've got
Speaker 9: a bake, so we've seen a lot. But what we
Speaker 9: have seen change quite significantly is where the returns are
Speaker 9: coming from. And we've seen that, for instance, the infrastructure space,
Speaker 9: and I know you were talking to your previous the
Speaker 9: previous interview, we're talking about it. We've seen the infrastructure space,
Speaker 9: specifically independent power producers, the assets there grow quite significantly.
Speaker 9: And then we have a water technology business that's also
Speaker 9: done really really well.
Speaker 2: Glad when most people, I think, look at their returns
Speaker 2: and their reward comes from that. So it comes from
Speaker 2: probably two things, one getting the money and two sort
Speaker 2: of knowing that you actually made the correct choice. I
Speaker 2: wonder if your sense of reward maybe comes from somewhere else.
Speaker 9: I would like this seeing all these businesses sludgage. So
Speaker 9: we do see a lot of businesses fail because we
Speaker 9: are investing at this very early stage, but we've seen
Speaker 9: businesses grow. One of the examples I can talk to
Speaker 9: you about is is Cooler, one of the businesses that
Speaker 9: in our portfolio we have just helped while we led
Speaker 9: the CDs A around this year, and you know that
Speaker 9: is quite significant for us, and you know that reward
Speaker 9: and seeing that business go from being a small digital
Speaker 9: platform to winning awards and today'sing their CDs A. You know,
Speaker 9: in the business that's in the agriculture space is just
Speaker 9: is sole rewarding. I sometimes I think I annoy my
Speaker 9: wife because we'll be driving and I'll be like, you
Speaker 9: see that business we've invested in there. And so that's
Speaker 9: why I think we're a lot of personally for me
Speaker 9: at least where my reward comes from.
Speaker 2: I'm glad we're in LIU. Thanks very much. Indeed, CEO
Speaker 2: at E Square do appreciate it. Lots of different ways
Speaker 2: to invest, of course, lots of different ways to have
Speaker 2: an impact. And as I say, one of the whole
Speaker 2: points of the Money Show is to basically try and
Speaker 2: help you have a rewarding kind of reward, to have
Speaker 2: the best possible investment outcomes, but an impact investing goes
Speaker 2: through phases. Of course, there's a lot of activity around
Speaker 2: it from time to time. There's certain things everybody wants
Speaker 2: to invest in. I do wonder a little bit about
Speaker 2: how adventurous you actually have to be and how difficult
Speaker 2: that can be. But yeah, fascinating world and a slightly
Speaker 2: different one to the normal investment conversations that you here
Speaker 2: on the Money Show.
Speaker 6: Spevent because at at Stephen Krutz well.
Speaker 2: In a moment. I don't know if you've seen these.
Speaker 2: I've managed to stay away from them as far as
Speaker 2: I know. But reaction videos. These are people who make
Speaker 2: a ton of money on TikTok and YouTube, not by
Speaker 2: actually adding a huge amount of content. You see their
Speaker 2: reaction to another video that's playing, and there's actually been
Speaker 2: quite a series of court cases about it, some of
Speaker 2: them really interesting. You put. Maleta Zondie has been looking
Speaker 2: at that, and we'll focus on that over the next
Speaker 2: little while. But it gets to the heart of whether
Speaker 2: you can what you can manetize, and how you can monetize.
Speaker 2: It's actually quite complex because it leads to questions about
Speaker 2: whether you're just really reshowing a video or if you're
Speaker 2: reshowing a video while you react to it, Is that
Speaker 2: now new content? Well, I'm not really sure, maybe maybe not,
Speaker 2: And I think court cases have gone in different directions
Speaker 2: on this, but it does just show you how the
Speaker 2: social media environment is changing. Out of YouTube, always something new.
Speaker 2: It's just gone seven o'clock.
Speaker 1: And now The Money Show with Stephen credits on seven
Speaker 1: oh two. Let's walk little.
Speaker 2: The Money Show with Stephen Critis is brought to you
Speaker 2: by Abster Corporate and Investment Bank PROWL, sponsor of the
Speaker 2: African Blockchain Report twenty twenty four plenty coming up in
Speaker 2: the next little while. Don't forget investment School tonight. There
Speaker 2: is so much going on around commodities. We've got very
Speaker 2: high goal price platinum prices that suddenly seem to be
Speaker 2: booming again so unexpectedly as well by and large, and
Speaker 2: then at the same time, of course, we've got copper
Speaker 2: prices spiking. This week we'll focus on all of that.
Speaker 2: But how do you ride the commodity cycle? Do you
Speaker 2: invest deeply? What kind of role should commodities play in
Speaker 2: your investment portfolio. That'll be part of the conversation that
Speaker 2: we're looking at in Investment School. We'll talk about social media,
Speaker 2: YouTube and TikTok, monetization and reaction videos in just a moment,
Speaker 2: and then also the impact of all of the tariffs
Speaker 2: on smaller businesses in small business focus tonight, you might think,
Speaker 2: I mean, in some ways it's to be a group
Speaker 2: of people in a very far place talking about something
Speaker 2: that may or may not happen. But unfortunately, for various reasons,
Speaker 2: it does look like the tariffs will happen, and even
Speaker 2: if they don't, the sheer uncertainty of it all is
Speaker 2: what's creating so many problems for so many companies and
Speaker 2: so many business people around the world. Tonight could hear
Speaker 2: from you as well, of course on double one double
Speaker 2: A three seven o two two one four four six
Speaker 2: oh five six seven and Voice Notes this evening on
Speaker 2: seven two seven oh two one seven oh two.
Speaker 1: The Money Show Take Thursday.
Speaker 9: Well.
Speaker 2: In social media, many people have started to make careers
Speaker 2: and actually done quite well simply out of posting online content.
Speaker 5: For the moment.
Speaker 2: The person who is most followed on TikTok is ca
Speaker 2: be lame from Senegal. They make reaction videos. In other words,
Speaker 2: they're not rarely original. It would be a reaction of
Speaker 2: them listening to me for example. So lots of arguments
Speaker 2: about whether this is the greation of new content. Here's
Speaker 2: facial reactions to people's videos. YouTube says they're now changing
Speaker 2: the type of content that can actually be monetized on
Speaker 2: their platforms. See Pumelle la Zondi. Of course you take experts,
Speaker 2: you Pumellelo. Good evening. So YouTube have been running monetization
Speaker 2: for quite a long time. Now, why are they're deciding
Speaker 2: to change who can monetize on their platform?
Speaker 12: Yeah, YouTube says are changing their monetization particy simply because
Speaker 12: there's a lot of AI contents that's starting to appear
Speaker 12: on the platform, and I suppose they're changing what original
Speaker 12: content is. And also the worry is that a lot
Speaker 12: of people earlier you mentioned Krbi Lam for example, whose
Speaker 12: contents on other platforms is basically reaction videos where people
Speaker 12: are posting other people's videos and then or he would
Speaker 12: be reacting to other people's videos. A lot of such
Speaker 12: content is starting to appear online because I guess it
Speaker 12: worked with one person, so it's working with other people.
Speaker 12: So they're saying that they want to focus more on
Speaker 12: original content as opposed to contents that not created by
Speaker 12: the individual themselves sometimes and also contents that it's created
Speaker 12: by AI as well.
Speaker 5: And I think there's a lot of because of AI.
Speaker 12: There's a lot of sort of like spamic contents that's
Speaker 12: starting to appear, where you find people just getting this
Speaker 12: content that is it's sort of like bombarding their accounts
Speaker 12: when they don't want it. And we do know that
Speaker 12: with AI as well, we are getting a lot of
Speaker 12: of fraud as with the contents that's starting to appear.
Speaker 2: Okay, so I mean to try and work out which
Speaker 2: content is which can be actually quite difficult, and some
Speaker 2: people who have been producing content for a long time
Speaker 2: might suddenly find themselves on the wrong side of.
Speaker 12: This totally and it will be so we can't know
Speaker 12: what their exact method is going to be, right because
Speaker 12: the starting of the fifteenth of July, so yes, and
Speaker 12: you might find that people who actually probably have benefited
Speaker 12: from YouTube's vannasization policies might get into trouble and might
Speaker 12: end up might find themselves not being paid the way
Speaker 12: they would normally get paid by the platform because they
Speaker 12: would have changed what original content is or what they
Speaker 12: the type of content that they want to pay.
Speaker 2: We've seen these sort of facial recognition videos, and in
Speaker 2: some ways it's not really new content. It's someone watching
Speaker 2: a piece of entertainment or something something that's already on
Speaker 2: YouTube and just reacting to it and not saying anything
Speaker 2: literally just their face. I mean, I honestly don't get it.
Speaker 2: But maybe that's just a sign of something that I
Speaker 2: have to deal with. But I'm presuming that. I mean,
Speaker 2: these have become very popular, but the argument about what's
Speaker 2: original content, which is as old as art itself, suddenly
Speaker 2: becomes right to the front.
Speaker 12: Well that's the thing, right because sometimes you might find
Speaker 12: that it's your own video.
Speaker 5: Is that going to is that also not going to
Speaker 5: be paid for?
Speaker 12: Because what you might find is that you've taken an
Speaker 12: old video because you want to say something about the
Speaker 12: old video, or you want to do a compilation of
Speaker 12: let's say, I don't know you you went to ten
Speaker 12: different locations in the last year, you did individual videos
Speaker 12: about those ten different locations in the last year.
Speaker 5: You now want to do a compilation video.
Speaker 12: So when their algorithm picks up that hold on, it
Speaker 12: seems like we've seen this before, We've seen that before,
Speaker 12: but it's still your video. It's still an original video, right,
Speaker 12: because you've sort of turned that content to something else
Speaker 12: and you've created something new from it, from something that
Speaker 12: you would have filmed yourself. So this is where it
Speaker 12: gets tricky on what they will be finding to be
Speaker 12: original contents. But once you're also finding, especially with news
Speaker 12: sites online or news platforms, you'll find that someone might
Speaker 12: take content from a particular news platform upload it on
Speaker 12: their own a page because it's a topical issue. They
Speaker 12: might make money from that as well. But they didn't
Speaker 12: generate it, did they They found it, They found it online,
Speaker 12: they found it on a different platform, and because it's
Speaker 12: topical it's what people are searching for, they make money
Speaker 12: from it.
Speaker 5: So it does actually get.
Speaker 12: Tricky on what they will be choosing to be calling
Speaker 12: original contents and whether if it's your own video, if
Speaker 12: it's a compilation of some people do compilations of things
Speaker 12: that they films themselves, but of videos they've taken in
Speaker 12: the past, if that's going to be recognized as it
Speaker 12: was in the past, or if it's going to say
Speaker 12: everything must be fresh and you had never appeared online before.
Speaker 2: What is original radio? Obviously, is this a change we're
Speaker 2: going to see on other platforms. I mean know, we're
Speaker 2: going to see TikTok. Maybe going in a different direction,
Speaker 2: they might actually get more content and make more money
Speaker 2: that way.
Speaker 5: Well, that could be it, right, they might get more content.
Speaker 12: But they're also in some regions, especially like in South Africa,
Speaker 12: haven't been here on how their payouts work, and people
Speaker 12: would believe that they don't have payouts. But sometimes you
Speaker 12: would speak to a content creators as hold on Us
Speaker 12: had a payouts, but obviously they haven't gone public on
Speaker 12: how this actually works for them and how they choose
Speaker 12: and the type of contents that they recognize if they
Speaker 12: recognize everything as original contents as long as it's reached
Speaker 12: a huge engagement. In regions where they're clear, they do
Speaker 12: say that it must be about one hundred thousand views
Speaker 12: on your particular page in the last thirty days or so,
Speaker 12: so if you not from one piece of content, but
Speaker 12: on your page. This is in the regions where they
Speaker 12: have publicly said that they do have some sort of payouts.
Speaker 12: But maybe content creators can also look for different methods
Speaker 12: for them to make money. Sometimes the method is outside
Speaker 12: the platform itself, right, Sometimes the method is on other
Speaker 12: platforms because your page is popular. You then go outside
Speaker 12: the platform to look for money, which is what a
Speaker 12: lot of South African content creators have been doing.
Speaker 2: Anyway, Cepo Mallela Zondie, thanks so much, really interesting conversation.
Speaker 2: A lot happening around social media and YouTube at the moment.
Speaker 6: The money showed.
Speaker 1: Small business focus.
Speaker 2: Small business Focus is brought to you by cap Tech.
Speaker 2: No matter the size of your business, Capitech's got you
Speaker 2: so obviously. The last few days dominated by the news
Speaker 2: from the White House, the US President Donald Trump imposing
Speaker 2: tariffs of thirty percent on US also instituting tariffs of
Speaker 2: fifty percent against Brazil, and of course it's fifty percent
Speaker 2: tariff on copper imports. There's a lot going on. You've
Speaker 2: had many conversations around song Corbo Ubap is an entrepreneur
Speaker 2: and business strategist, So Cooba, thanks so much for coming in.
Speaker 2: Good evening. So in a way, the trade wars are
Speaker 2: happening far away, doesn't really matter. He's not going to
Speaker 2: do it anyway. I shouldn't be looking at it like
Speaker 2: that for my small business. Should I I don't think
Speaker 2: you should?
Speaker 6: You know?
Speaker 13: I think what's that saying? Never waste a good crisis?
Speaker 13: And I actually think that this is an interesting crisis
Speaker 13: that small businesses need to wake up and pay attention to.
Speaker 13: So either those small businesses who are exporting some of
Speaker 13: their goods or you know, goods overseas and bar overseas,
Speaker 13: really like not just the US, but also kind of
Speaker 13: small businesses who aren't currently exporting. It really forces you
Speaker 13: to take a look at the global environment and ask yourself,
Speaker 13: are you kind of operating in a really small island
Speaker 13: if you're just operating in South Africa? And as kind
Speaker 13: of certain products become less and less competitive from a
Speaker 13: pricing perspective, I mean using a good example, I think
Speaker 13: after this week, we all need good examples. So wine
Speaker 13: makers in South Africa. There are certain wine makers in
Speaker 13: South Africa who export all their goods and a fair
Speaker 13: amount goes to the US. With certain tariffs currently growing
Speaker 13: up and duties going up, what it means is that
Speaker 13: we may have a lot more supply sitting in South Africa.
Speaker 13: And therefore if you're a local wine producer and kind
Speaker 13: of only seld s Africa, you suddenly have a lot
Speaker 13: more competition because some of the larger players are now
Speaker 13: back with additional product that they're looking to sell in
Speaker 13: South Africa, So I really think it's one you need
Speaker 13: to look at.
Speaker 2: It goes in lots of directions, right there, consequences in
Speaker 2: every direction. So at first glance, it may look like
Speaker 2: this sector is going to do very badly and suddenly
Speaker 2: it changes. So it reminds me a little bit of COVID.
Speaker 2: You couldn't get in your car, but if you could
Speaker 2: drive a motorbike and had one, you were sudden in
Speaker 2: a position where you could make money.
Speaker 13: Exactly whereas before COVID, we weren't really respecting you much
Speaker 13: on a motorbike. Right, So one hundred percent, I think
Speaker 13: part of this whole tariff war was really forces us
Speaker 13: to understand input costs. It forces us to understand the
Speaker 13: full unit economics of some of the products that we
Speaker 13: produces as businesses. But it also forces us to think
Speaker 13: about kind of like you say, the sectors were in
Speaker 13: So I mean, if you look at kind of how
Speaker 13: the markets are responding every time these tariffs are announced,
Speaker 13: there's certain kind of sectors that struggle and then there's
Speaker 13: some that bounce up. So I mean, if you look
Speaker 13: at copper as an example, if you look at the
Speaker 13: resources you know on the Stock Exchange have been doing.
Speaker 13: That kind of tells you what the market thinks is
Speaker 13: going to happen in those sectors. And I think as
Speaker 13: small businesses who operate in the value chain of some
Speaker 13: of these large companies, we need to be paying attention
Speaker 13: because you may think, listen, I'm just running a marketing
Speaker 13: company and I service a couple of customers. But the
Speaker 13: reality is, if you're servicing a company that does export
Speaker 13: to the US and suddenly isn't or suddenly their goods
Speaker 13: are no longer competitively priced in the US, it actually
Speaker 13: means you're probably going to be hit because they're going
Speaker 13: to be looking to cut down on spending and you
Speaker 13: need to start thinking about where do you replace that
Speaker 13: revenue from.
Speaker 2: It would seem to me that there's going to be
Speaker 2: a lot of competition for new markets, and you really
Speaker 2: kind of want to be first in You want to
Speaker 2: be the first South African knocking on the door of
Speaker 2: a company in Beijing. You don't want to be the
Speaker 2: fifty third. You want to be the first one hundred percent.
Speaker 13: And I think unfortunately the ship is sailing right, so
Speaker 13: actually ones already late to the part. It's interesting that
Speaker 13: you should mention Beijing. If you think about the president
Speaker 13: who's on his way back to take us into his
Speaker 13: confidence on Sunday, right coming back from bricks and effectively,
Speaker 13: there's number of moves that are being made from a
Speaker 13: bricks perspective in order to enable trade between small businesses
Speaker 13: in South Africa and other bricks nations. If you think
Speaker 13: about the AGOA framework between US and America, which basically
Speaker 13: now as a trade agreement is really on the rocks
Speaker 13: and unlikely to continue. There's certain products that you know
Speaker 13: in the Sadic region even are now suddenly needed or
Speaker 13: there's an oversupply of you know ours reading up today,
Speaker 13: leading up today and thinking about how you know, certain
Speaker 13: things we'd take for granted, but like tea can be
Speaker 13: traded terraf free between Kenya and South Africa. You know,
Speaker 13: if you're a tea producer, are you currently trading with
Speaker 13: Kenya or are we all trying to get into the
Speaker 13: US market. Another one that was interesting is flour, maize, meal,
Speaker 13: poultry products. They can actually be traded terra free between
Speaker 13: Guana and South Africa. It really forces us to look
Speaker 13: on the continent and it really forces us to look
Speaker 13: at partners such as bricks and China is a massive market,
Speaker 13: and I think for small businesses what we need to
Speaker 13: do is we often look at it as so over
Speaker 13: stimulating and daunting and overwhelming.
Speaker 2: We really need to get engaged.
Speaker 13: And I think one of the tips I would give
Speaker 13: to small businesses is that a number of financial services providers,
Speaker 13: banks and otherwise actually have really brilliant trade solutions and
Speaker 13: support for helping small businesses to actually get their certificate
Speaker 13: to be importers or exporters and actually help them along
Speaker 13: the way from a trade finance perspective, if finance is
Speaker 13: the issue, or from a quality assurance perspective, or even
Speaker 13: finding off takers for your products to get into Beijing
Speaker 13: where probably sixteen thousand of our companies would be needed
Speaker 13: to produce enough for what the buyers in China are
Speaker 13: needing for their enormous market. So I really think this
Speaker 13: is a crisis not to be wasted for small business.
Speaker 2: Since the nineteen ninety we've really seen a trend towards
Speaker 2: increasing globalization, so transport costs were down. It's all about
Speaker 2: moving stuff the Internet. I mean the fact that you
Speaker 2: know on WhatsApp you can just have a conversation with
Speaker 2: someone wherever they are, and it's the same cost or
Speaker 2: virtually free rarely if you're outside of McDonald's WiFi. And
Speaker 2: who hasn't done that? So now we're going backwards, and
Speaker 2: I mean I find that, frankly quite scary for lots
Speaker 2: of reasons. More trade usually means fewer wars, but you
Speaker 2: now have to we're in a completely different era, and
Speaker 2: I'm not sure how some more businesses shouldn't really navigate that.
Speaker 13: I think it's so You're right, it does feel like
Speaker 13: we're going backwards. I think as I reflect on it,
Speaker 13: it's really that we're living in parallel universes. Yeah, because
Speaker 13: we are in the age of globalization. I mean, look
Speaker 13: at your earlier interview about content and YouTube and social media, right,
Speaker 13: we are kind of literally a device away from someone
Speaker 13: in any part of the globe. However, at the same time,
Speaker 13: from a politics trade perspective, from leader's perspective, I think
Speaker 13: a number of countries are starting to protect their own territory.
Speaker 13: And if you think about even the US, that's what's happening.
Speaker 13: It's kind of all in the name of protecting the
Speaker 13: US and making America great again. And it does also
Speaker 13: force us to be a bit insulated in our view
Speaker 13: of like, oh, actually, what are the opportunities in South Africa,
Speaker 13: what are the opportunities in satik in Africa? Whilst still
Speaker 13: being super connected. And I think the balance that we
Speaker 13: need to strike is how do we leverage the globalized
Speaker 13: toolbox in order to be super efficient and competitive in
Speaker 13: our home base, which is the African continent. If we
Speaker 13: can manage to straddle those two extremes and live in
Speaker 13: those two parallel universes, I think that's where the magic
Speaker 13: is for small businesses.
Speaker 2: In the end, it's a bit like our country. We're
Speaker 2: all crying and screaming and look at us. If our
Speaker 2: economy was stronger and it hasn't grown we were talking
Speaker 2: earlier since twenty ten, then we wouldn't really be in
Speaker 2: this position. If you're running a small business, you need
Speaker 2: to crack the local market. It actually needs to be
Speaker 2: a well run, efficient, to organize, sustainable local business to
Speaker 2: sort of survive these difficult times.
Speaker 6: One hundred percent.
Speaker 13: And I think it's maybe a blessing in a curse
Speaker 13: is if you can build a business in South Africa
Speaker 13: and make it tick and make it work, you could
Speaker 13: probably build a business anyway, right, So I really think
Speaker 13: that's the challenge, and like you say, we've got to
Speaker 13: get really sharp in how small businesses focus on opportunities,
Speaker 13: are super efficient leverage the technologies and other global advances
Speaker 13: that are at our disposal whilst still solving for local problems,
Speaker 13: because I don't think you're going to find another place
Speaker 13: that has more problems ripe to be solved with some
Speaker 13: of the technology that's available to us as a toolbox.
Speaker 2: And that's really the ask. Thank you so much for
Speaker 2: coming in some corbo vulba is the entrepreneur and business
Speaker 2: strategist really do appreciate it. Small business focus tonight.
Speaker 14: The Money Show Investment School.
Speaker 2: Well, one of the big story of the last sort
Speaker 2: of few months has been what's happening with commodities. Gold
Speaker 2: in particular has broken record after record. Then we've seen
Speaker 2: platinum suddenly, almost out of nowhere, suddenly start to do
Speaker 2: a lot better than it has been doing, mainly not
Speaker 2: for any particular market reason, but some people suddenly realized
Speaker 2: there was a deficit of platinum copper. Of course, the
Speaker 2: latest this week there was a reason for that, and
Speaker 2: Trump's threat of a fifty percent import tariff on imports
Speaker 2: of copper into the United States. So what role should
Speaker 2: commodities play in your investment portfolio? If any, Vincent Anthony Rogers,
Speaker 2: the CEO and co founder at Differential Capital, and David
Speaker 2: Shapiro's the stockbroker and chief global equity strategist at Sassin
Speaker 2: gentlemen are ready to appreciate the time. Thanks so much
Speaker 2: for coming in. David. Let me start with you how
Speaker 2: much I mean, how do you even start with commodities
Speaker 2: when we see the cycles, and particularly recently, can swing
Speaker 2: so strongly one way or another.
Speaker 15: Stephen, that's a problem with gold. The fact that we're
Speaker 15: talking about it now is probably too late. You know,
Speaker 15: we should have we should have bought the gold when when,
Speaker 15: when nobody wanted it, which can be a ten year cycle.
Speaker 15: You know, that's that's gold. You can wait for ten
Speaker 15: years before you finally get your kind of returns, and
Speaker 15: it's usually in times of stress. And we can talk
Speaker 15: about what's caused the gold price to go up and
Speaker 15: also discuss whether it's you believe it's going to continue.
Speaker 15: So it's one of those assets, it's a fair asset.
Speaker 15: It's something people buy when they feel things are going
Speaker 15: to go wrong, or it's going to collapse, but it's
Speaker 15: for years people have bought them, particularly in the Europeans
Speaker 15: and also South Africans have always had a little bit
Speaker 15: of gold in their portfolios. But commodities can be very,
Speaker 15: very tricky to deal. It's always best best left to
Speaker 15: the professionals.
Speaker 2: Vincent. Why do commodities have such cycles? I mean, that's
Speaker 2: the way that markets work, But it says something maybe
Speaker 2: just about how the globe economies work, global economy works,
Speaker 2: that we have such cycles of commodities.
Speaker 14: Well, if we split commodities up into like the main types,
Speaker 14: your mining commodities and your soft commodities, I think with
Speaker 14: mining commodities they tend to be more cyclical simply because
Speaker 14: it takes a long time to build a mine, and
Speaker 14: often during that time, demand can either move in one
Speaker 14: direction or the other. And typically what happens is miners
Speaker 14: start their capex cycles too late. And as you can
Speaker 14: see now, which is probably going to be the case
Speaker 14: with the platinum industry, where we're probably years away from
Speaker 14: adding new supply, you could find that if demand just
Speaker 14: tilts in a certain direction marginally, it ends up squeezing
Speaker 14: the price dramatically. But I guess that's just how you
Speaker 14: stimulate new new supply. When it comes to the soft
Speaker 14: commodities like you know, corn and maize and things like that,
Speaker 14: that's that's slightly different. You know, they have much shorter
Speaker 14: cycles linked to weather, linked to Avian flu and things
Speaker 14: like that, So you know, the different ranges for the
Speaker 14: two types.
Speaker 2: David, I'm surprised after all of this time there are
Speaker 2: still surprises. So the sort of gold supercycle that we're
Speaker 2: seeing now, I think very few people saw coming. Maybe
Speaker 2: someone could have predicted what was happening in the States,
Speaker 2: maybe if you had predicted Russia's invasion of Ukraine. But
Speaker 2: what's really driving it, though is central bank buying of gold,
Speaker 2: and that's a harder thing to sort of see. But
Speaker 2: this is a kind of supercycle that no one saw
Speaker 2: coming in is that a risk and a little bit
Speaker 2: of a blessing? Maybe, Well, no one saw.
Speaker 15: It coming because no one expected Russia to invade Ukraine.
Speaker 15: And I think what probably triggered that is that America's
Speaker 15: reaction was to freeze Russia's assets, and I think other
Speaker 15: central bank said hold on a sick you know, and
Speaker 15: there's a lot of rogue states around the world. There
Speaker 15: a lot of people who fear that this could happen
Speaker 15: to them, and we started to see the shift out
Speaker 15: of the dollar, you know, out of the clutches of
Speaker 15: the United States, into other assets, gold of course being
Speaker 15: one of them, and that's continued. I also think there
Speaker 15: was a desire to break away from you know, the
Speaker 15: control of the United States, control of the dollar, and
Speaker 15: that cycle's continued, you know, for now and now for
Speaker 15: two years plus, and gold has literally gone up. Stephen
Speaker 15: is there's something that I must I must mention as well.
Speaker 15: They're just two things very quickly. I won't go into detail,
Speaker 15: but you know, if you if you go to a
Speaker 15: bank and you want to be their top client, what
Speaker 15: card do they give you? They give you a platinum card. Okay, yes,
Speaker 15: and platinum is now only it's a third the price
Speaker 15: of gold. They should give you a gold card. But
Speaker 15: that tells you how gold has moved against platinum because
Speaker 15: platinum traditionally has always been more expensive than gold. And
Speaker 15: I think there's a bit of a catch up coming now.
Speaker 15: People have just understood, you know, this this this gap
Speaker 15: or this deficit, and should from gold to platinum. I
Speaker 15: think the other thing and just talking to what Vincent says,
Speaker 15: there's a big difference between dealing in the producers and
Speaker 15: dealing in the metal. Now, for most of our life
Speaker 15: I spent on the stock change. We dealt in gold mines,
Speaker 15: not gold commodity. And that's a whole different dynamic the
Speaker 15: mining the profitability of minds, you know, the efficiency of
Speaker 15: minds at whatever price, versus the actual underlying commodities as well.
Speaker 15: So there are two different markets there that you know,
Speaker 15: we can talk about.
Speaker 2: Well, I was going to ask that because that's one
Speaker 2: of the big questions, isn't it, Vincent, Do you invest
Speaker 2: in the mine? I mean, Harmony is a great example
Speaker 2: of a mine that share price is just shot up
Speaker 2: through all of this, Or do you invest in gold?
Speaker 2: And obviously even a mine in a boom time can
Speaker 2: make a mistake. On the other hand, you might get
Speaker 2: a better return over time.
Speaker 14: Well, with gold producers and miners, that's been quite difficult
Speaker 14: over the last fifteen years, simply because it's the rate
Speaker 14: or the costs of mine have risen far faster than
Speaker 14: even the gold price has until until very recently. And
Speaker 14: so that's the key question is whether the goal price
Speaker 14: here sustainable. If it is, and it hangs around here
Speaker 14: and perhaps you know, goes a little bit higher. These
Speaker 14: gold stocks aren't on very expensive multiples, and some of
Speaker 14: them do have reserves that are quite long, so you
Speaker 14: can you can possibly see.
Speaker 5: Them being.
Speaker 14: Becoming more expensive. That's on the goal side. Perhaps it's
Speaker 14: also worth talking about, you know, the platinum stocks, because
Speaker 14: that's something that's really interesting because to David's point, I
Speaker 14: think with gold, we know that the drivers, as you know,
Speaker 14: central banks, there's there's there's some secular trend there. But
Speaker 14: in the case of platinum stocks, what what is potentially
Speaker 14: interesting is that there is a you know, a fundamental driver,
Speaker 14: which is, you know, perhaps electrical vehicle take up is
Speaker 14: not going to be as quick as people thought, or
Speaker 14: might not even have the penetration that people expected. And
Speaker 14: the alternative, which is you know, hybrid cars, which actually
Speaker 14: consume far higher amounts of platinum, become sort of the
Speaker 14: neutral ground in which the world market settles on for
Speaker 14: you know, and in the quest for lower emissions. And
Speaker 14: we now have a situation, a situation where in South Africa,
Speaker 14: and you know, I guess to Russia to some extent,
Speaker 14: where you've got large reserves but no one has really
Speaker 14: spent the last five years trying to expand supply, so
Speaker 14: you could you could see companies that have large reserves
Speaker 14: be seen as call options on potentially a massive spike
Speaker 14: in in platinum group metals. So so you know, that
Speaker 14: could be an interesting sector to watch.
Speaker 2: One of the other things in Vincent you were talking
Speaker 2: about sort of softer commodity, so food agricultural products, and David,
Speaker 2: I would like to think that if you're looking for
Speaker 2: something that's pretty stable over time, we're always going to
Speaker 2: need to eat right, and you would think that that
Speaker 2: might be a food production company, agricultural produce or whatever
Speaker 2: it is, might be something you need to keep a
Speaker 2: few shares in just because no matter what happens, that
Speaker 2: demand's not going to go well.
Speaker 15: If it flies or grows, just leave it alone. You
Speaker 15: know it grows in the ground. That's not always it.
Speaker 15: Leave chickens alone and flies like a chicken, Leave it alone.
Speaker 15: Those kind of commodities, food commodities. That's honestly, that is
Speaker 15: such an incredibly difficult area because there you're subject to
Speaker 15: changes in weather and you know, globally people grow wheat
Speaker 15: and you'll find it if one country goes through a
Speaker 15: bit of a tough time, the price goes up and
Speaker 15: so on. I find that it's really something that when
Speaker 15: I say professionals, people who are really close to that
Speaker 15: kind of industry should get involved with farmers for example,
Speaker 15: but not you and me or just the common or
Speaker 15: invests a very very difficult area the one. If you
Speaker 15: want to add to the area of difficulty, we can
Speaker 15: bring in oil as well. You know, if you really
Speaker 15: want to get punished or punish yourself. Tart trade oil
Speaker 15: so exceptionally difficult.
Speaker 2: To read it. Yeah, No, it's fascinating, I suppose, vincent.
Speaker 2: I mean the other role. The other question we would
Speaker 2: ask is is there I mean, is it better to
Speaker 2: have a portfolio with no commodities in it at all?
Speaker 2: You know, we've spoken in the past about investing in
Speaker 2: gold and why you would do that and why you
Speaker 2: wouldn't do that. There's no there's no dividend for a start,
Speaker 2: But what did it actually be better on balance to
Speaker 2: just leave them all alone, Especially when you see the
Speaker 2: volatility that we've seen quite recently and with Trump and
Speaker 2: the White House, that volatility is going to be there
Speaker 2: for a while.
Speaker 14: I think if you can afford to stomach some volatility
Speaker 14: and you've got a longer term investment horizon. I think
Speaker 14: it would be unwise not to have commodity exposure. And
Speaker 14: for me, you know, I'll go back to those those
Speaker 14: secular things. So if we can look at I mean,
Speaker 14: you know, David's spoken very well about the Central Bank
Speaker 14: and gold, but if I could talk about a few
Speaker 14: other sort of off peaced commodities like copper. So in
Speaker 14: the case of copper, we're starting to see a material divergence.
Speaker 14: You know, out say, over the last thirty years, there's
Speaker 14: been a bin big link to building construction and copper demand,
Speaker 14: you know, copper piping and things like that. That relationship
Speaker 14: is actually broken down recently, and that's because of the
Speaker 14: rise of let's call it the middle class in many
Speaker 14: parts of the world, as well as developed countries in
Speaker 14: the world consuming far much more electricity due to AI,
Speaker 14: which is a secular trend. There is no element that
Speaker 14: conducts better than copper. You can use aluminium potentially as
Speaker 14: a substitute, but that's required you know, three or four
Speaker 14: times the amount, so that you know, both of those
Speaker 14: metals are things where you know, over the long term again,
Speaker 14: and they offered in form of ETFs. If you look
Speaker 14: at the copper, the rand copper price, it's actually quite
Speaker 14: as stable, not as volatile as gold and then the others,
Speaker 14: and that trend over the long term actually substantially beats
Speaker 14: inflation and you can get you know, ETFs to to
Speaker 14: to physical copper. I also think it's you know, quite
Speaker 14: a few of the producers as well are worth worth
Speaker 14: a look. So so you know, I think if you've
Speaker 14: got a longer term view, I think you should you
Speaker 14: should have a have a serious look at it. And
Speaker 14: to David's point, you know, perhaps you know, look at
Speaker 14: specialists that can can invest that for you in in commodities.
Speaker 2: He's being too Vincent Anthony Raja this evening, the CEO
Speaker 2: and co founder A Differential Capital, David Shapiros, you know,
Speaker 2: of course, the stockbroker, chief global equity strategist at Sasmen.
Speaker 2: We're talking about investing in commodities on Investments School tonight
Speaker 2: kind of the right time to do it when you
Speaker 2: consider everything that's happening around the world. You're with the
Speaker 2: Money Show, the Money Show Investment School. Vincent Anthony Raja's
Speaker 2: CEO and founder A Differential Capital, David Shapiro is veterans,
Speaker 2: stockbroker and chief Global Equity Strategists Assessment on Investment School tonight,
Speaker 2: talking of course around commodities. I mean, David, when we
Speaker 2: talk about cycles and we talk about gold, for example,
Speaker 2: at some point, if you're going to raise any return,
Speaker 2: you need to know when to sell, and you're as
Speaker 2: always trying to sort of predict the future. We had
Speaker 2: a kind of moment where maybe you start to have
Speaker 2: that conversation with whoever, is it now the point at
Speaker 2: gold that we need to sell? Is it now at
Speaker 2: the time where we need to sell some gold and
Speaker 2: buy some more platinum for example.
Speaker 5: Yep.
Speaker 15: The fact that we're talking about it now, that it's
Speaker 15: become such a hot subject, I think you'll normally find
Speaker 15: that that's the time that it starts to lose momentum.
Speaker 15: And I wouldn't be surprised if we've seen the peak
Speaker 15: in both of those. I like Vincent's view on copper,
Speaker 15: and I like the view that you know, the expansion
Speaker 15: of AI of data centers and that is going to
Speaker 15: require a huge amount of electricity. I don't even think
Speaker 15: we can underst stand how much power is going to
Speaker 15: be needed, which is going to increase the need for
Speaker 15: a commodity for base metals, for industrial metals. So and
Speaker 15: the other thing is, I think we're going into a
Speaker 15: cycle where interest rates are going to start coming down
Speaker 15: in the United States quite quite dramatically, and that's going
Speaker 15: to take a lot of the you know, the what's
Speaker 15: with the glow off gold as well. I know that
Speaker 15: people will say, oh, well, it's going to increase it,
Speaker 15: but the deficit in the United States, panic and so on.
Speaker 15: But I would my own view is I think we've
Speaker 15: seen the top of gold. It might not fall in
Speaker 15: a heap, but I think it's going to struggle to
Speaker 15: kind of get a lot higher from you know, from
Speaker 15: the levels that we've seen. So this is kind of
Speaker 15: for me peak gold, Vince Adam not not not not
Speaker 15: not a common view not you know, you're going to
Speaker 15: find the gold bulls phoning in and sending hate mail
Speaker 15: and so on.
Speaker 2: Well, I'm sure they have you already, David from you
Speaker 2: know the Last time. Vincent is the other other commodities
Speaker 2: that people are looking at at the moment. I mean,
Speaker 2: everyone's talking about rare earths. Wherever you go, there's a
Speaker 2: racist story about rare earth's and Trump.
Speaker 14: Yeah, I I also like the rare earths for similar
Speaker 14: reasons that I like copper for So, if you think
Speaker 14: about a mineral like neodymium, it's a weird thing. They
Speaker 14: call them rare earths, but they're actually quite common, but
Speaker 14: it's it's hard to find them in concentrations enough that
Speaker 14: you can mind them profitably. You take a metal like
Speaker 14: an element like neodymium, it's critical to make magnets for
Speaker 14: electric car vehicles. China produces probably eighty percent of the
Speaker 14: world supply. So there are some some interesting ETFs that
Speaker 14: you can get access to that have you know, can
Speaker 14: that can give you exposure to those And I think
Speaker 14: that that, again is a secular trend that one has
Speaker 14: to watch very carefully. Maybe just to add on to
Speaker 14: to what David was saying, you know, this electricity consumption trend.
Speaker 14: Besides copper, there's there's a nexus around that which includes surprise, surprise,
Speaker 14: coal because even in countries like China where they're building
Speaker 14: a huge amount of solar, there's still a big, big,
Speaker 14: big amount of coal that they're still continuing to consume.
Speaker 14: And then the other one, which is a pet favorite
Speaker 14: of mine, is uranium, which you know, I think nuclear
Speaker 14: is probably in the in the very long term, probably
Speaker 14: the most stable low emission power source that we can use.
Speaker 14: And as it becomes safer, and now that the technology
Speaker 14: has evolved too, you can make these what they call
Speaker 14: small module reactors. As that technology gets rolled out, I
Speaker 14: think the demand for uranium could increase quite substantially. And
Speaker 14: that's also not the most common mineral around. So there's
Speaker 14: again interesting listed companies, but as well as ETFs that
Speaker 14: can give you exposure to that.
Speaker 2: David. When it comes to commodities like this, I suppose
Speaker 2: what you're looking for are things that you know are
Speaker 2: going to be needed in the future and yet will
Speaker 2: be quite scarce. I mean, that's the platinum story. At
Speaker 2: the moment. Gold output in a slightly different category, but
Speaker 2: that's certainly the platinum story, the rare earth story, the
Speaker 2: copper story very much. So you've got to look for
Speaker 2: examples of where you know they will be demand in
Speaker 2: the future and as they become more and more scarce,
Speaker 2: or let me put this another way, are in areas
Speaker 2: that are harder to mine, then actually that's the place
Speaker 2: to put your money. I would think if you're going
Speaker 2: to get into the space.
Speaker 15: In theory is in practice, we find it doesn't really happen.
Speaker 15: And that's a difficulty with commodities, and that it is
Speaker 15: such a specialist world and run by people who are
Speaker 15: very very close to those markets. From a common point
Speaker 15: of view, I try and avoid them. It's leave it
Speaker 15: to the professionals. And I say this with the best
Speaker 15: of intentions. It is so difficult, you know, to understand.
Speaker 15: And I have to tell Vincent a story. You know,
Speaker 15: my dad, for my ba Mitzvah, he took my money
Speaker 15: and he bought an uranium company. Remember my dad was
Speaker 15: on the market as well, a big gold trader, and
Speaker 15: he bought me with my bu mitzver money a uranium
Speaker 15: company called Dominion Reef. And every morning, every evening when
Speaker 15: I was on the front lawn playing and the star
Speaker 15: would come up and go look at the pass of
Speaker 15: Dominion Reef. And one day I looked it wasn't there?
Speaker 15: Is it gone?
Speaker 13: You know?
Speaker 6: I finished, and that's uranium.
Speaker 15: It's ever since I've been on the market, and that
Speaker 15: we've always been talking about uranium, and it's never really
Speaker 15: you know, it never really featured and reached the kind
Speaker 15: of levels that we thought. But I'm not taking away
Speaker 15: from the view that we're going to need it. A
Speaker 15: nuclear could be another fuel, but uranium is such it's
Speaker 15: probably more difficult than anything else we've spoken about tonight.
Speaker 2: Sure, interesting, I mean I'm still stuck on the start.
Speaker 2: But because I mean I also grew up in that
Speaker 2: kind of how so much has changed, I didn't look
Speaker 2: at the share price though, Vincide. We forget, of course,
Speaker 2: in our country how important commodities have been, I mean
Speaker 2: essentially formed it, you know, in some ways. And that
Speaker 2: still then has an impact. So of course if we
Speaker 2: go through a time where platinum and gold are very strong,
Speaker 2: that must have an impact on all of our lives,
Speaker 2: just because we're in South Africa.
Speaker 14: Yeah, A simple example is when platinum, gold, coal, whatever
Speaker 14: it is, the prices rise substantially. Remember these companies pay
Speaker 14: huge royalties to the government. So simple thing is you
Speaker 14: won't see that increases when we see commodity prices rising,
Speaker 14: you know quickly. And you know, I grew up in
Speaker 14: a small town called brits which so I've lived commodity cycles,
Speaker 14: you know, through boom and bust, and you could you
Speaker 14: can literally see the impact of rising platinum prices on
Speaker 14: the economy around you. People getting jobs, you know, opening
Speaker 14: up small businesses, and then they start to shutter on
Speaker 14: the other side of it. So I suppose South Africa
Speaker 14: is interesting in that we're not that disconnected, you know.
Speaker 14: I know, platinum and gold small contributors directly to GDP,
Speaker 14: but indirectly it's quite substantial. And so that's important thing
Speaker 14: to remember in the South African case. And I suppose
Speaker 14: that's where there's a it's important to realize how you diversify.
Speaker 14: You know, sometimes you might find that investing in the
Speaker 14: banker that funds the platinum companies just the bad ideas,
Speaker 14: you know, investing all of your money in in in
Speaker 14: one place. So it's important thing to to to remember
Speaker 14: and it's a key driver of our our economy.
Speaker 2: Vincent Antony Racha, thank you so much. See you and
Speaker 2: co founder a Differential Capital, Thanks so much for coming in.
Speaker 2: David Shapira, always our joy to talk to you. Ready
Speaker 2: to appreciate the time. Thank you the veteran stockbroker, stockbroker
Speaker 2: and chief Global equity Strategists at SASSIN.
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Speaker 2: Well, of course, US markets open and beginning to trade
Speaker 2: positive now, partly because Delta Airlines they had such a
Speaker 2: bullish update. They're predicting quite strong earnings over the next
Speaker 2: quarter or so for various reasons. As a result that
Speaker 2: dal Jones is up point six percent, the nastacap point
Speaker 2: one four, and the S and P five hundred up
Speaker 2: point three to five. The story still, of course around Nvidia,
Speaker 2: the huge amounts of money that go into their valuation.
Speaker 2: The other story that Bloomberg report we referenced earlier around
Speaker 2: how one person is being offered a salary of two
Speaker 2: hundred million dollars just to leave Apple and go to Meta.
Speaker 2: It is astonishing what we're seeing happening in terms of
Speaker 2: global markets when it comes to artificial intelligence. We'll be
Speaker 2: back with you tomorrow. Good evening, it's eight o'clock