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Speaker 1: And now The Money Show with Stephen credits on seven

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Speaker 1: oh two net's walk Little.

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Speaker 2: The Money Show with Stephen Curtis is brought to you

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Speaker 2: by abs A Corporate and Investment banking proud sponsor of

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Speaker 2: the LMA ICMA Loan and Capital Markets Africa Summer twenty

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Speaker 2: twenty six. ABSENT is a registered FSP. Good evening, Welcome

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Speaker 2: to the program. I'm Stephen Curtis. Nine minutes now after

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Speaker 2: six A budget that I suppose is going to be

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Speaker 2: remembered for what I think is a brave attempt. I

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Speaker 2: think an important attempt. I hope it works to try

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Speaker 2: and limit the amount of your money that counsels simply waste.

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Speaker 2: Maybe steals more accurate in some cases, but certainly I

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Speaker 2: was fascinated by what the Minister said today Inoko Iguana

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Speaker 2: about how to try and control the way in which

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Speaker 2: councils waste money. We'll focus on that a bit this evening.

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Speaker 2: Looking forward to speaking to Duncan Peters. Doctor Peter says,

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Speaker 2: who knows the Director General in the National Treasury. He'll

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Speaker 2: be on your radio in just a moment. Also, of course,

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Speaker 2: big changes for you, many of them positive. Not that

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Speaker 2: you're going to be paying less tax necessarily, but there

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Speaker 2: are adjustments for tax bracket Greep. We'll be talking also

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Speaker 2: about the new changes to retirement and some help for

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Speaker 2: smaller firms, something that I think many people have been

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Speaker 2: calling for for a while. Edward Keisveetter is the outgoing

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Speaker 2: commissioner at SARS. We'll hear from him in about ten

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Speaker 2: minutes time as well. There's a big story in SARS

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Speaker 2: about how things have improved. What do you do to

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Speaker 2: reform an organization that's been so badly treated. I'll ask

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Speaker 2: him about that. There might be lessons there for say

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Speaker 2: the NPA or other organizations. And then content and then

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Speaker 2: a big focus on the situation regarding municipalities. Mielen Horoleni,

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Speaker 2: you'll know him looking forward to that conversation. Around as

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Speaker 2: six forty in Motors having their results out today, we're

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Speaker 2: buying more cars and it shows him their results. You'll

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Speaker 2: hear from their CEO just before seven o'clock. I was

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Speaker 2: lucky enough to be at the budget earlier today in

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Speaker 2: Cape Town. Was here for it and just interesting to

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Speaker 2: see the moon of what I suppose you would call

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Speaker 2: the commentariat, the political carry at, whatever you want to

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Speaker 2: call it. The group of people who kind of make

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Speaker 2: up formal parliamentary politics in South Africa and all of

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Speaker 2: the ecosystems that are around them. To an extent, these

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Speaker 2: people would probably consider themselves the elites in society. I

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Speaker 2: was struck by the mood of positivity, not something you

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Speaker 2: always get going into a budget. Often for years and

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Speaker 2: years and years, I've started coverage of a budget for

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Speaker 2: EWN by making the same point, this is a very

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Speaker 2: difficult moment that this is the minister is to make

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Speaker 2: difficult decisions for the first time that I can remember.

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Speaker 2: That has not been how we started the coverage of

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Speaker 2: a budget. Instead, people have been talking about the extra

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Speaker 2: money coming into the system. They've been talking about the

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Speaker 2: changes that they believe will be made, and then we

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Speaker 2: see that in the actual budget itself, because we see

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Speaker 2: the improvements, the ways in which life is being made easier.

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Speaker 2: And just a simple example is that for a long

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Speaker 2: time you would have expected the fuel levy to actually

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Speaker 2: increase by more than inflation. That was the sort of

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Speaker 2: go to to increase revenue. What happened this time was

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Speaker 2: it was just in line with inflation. We've seen that too.

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Speaker 2: When it comes to syntaxaes and things like that. Looking

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Speaker 2: forward to speaking to doctor Duncan Peterser about that in

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Speaker 2: just a couple of moments. It's eleven minutes now after

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Speaker 2: six o'clock The Money Show.

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Speaker 1: With Stephen Kruts live on ninety two point seven and

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Speaker 1: one o six FM, streaming on the Prime Media Plus.

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Speaker 3: NAP and DStv channel eight five six.

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Speaker 2: The Money Show with Stephen Croutis is brought to you

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Speaker 2: by ABS Corporate and Investment Banking, proud sponsor of the

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Speaker 2: LMA ICMA Loan and Capital Markets Africa Summer twenty twenty six.

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Speaker 2: ABS is a registered FSP. Also important conversations to come

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Speaker 2: tonight about the situation at SARS. You'll have seen how

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Speaker 2: some of the tax the tax increases that we are

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Speaker 2: seeing for tobacco and for alcohol are only going up

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Speaker 2: as suppose essentially as the as much as inflation, no

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Speaker 2: more than that. And I think that's very important. Well,

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Speaker 2: let's speak to the commissioner at SARS, now Edward Kissvetter.

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Speaker 2: You'll remember how he took over from SARS during at

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Speaker 2: the end of the State capture era, the Finance Minister

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Speaker 2: paying tribute to him for the reform of the institution

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Speaker 2: to what it is now Commissioner Kisvetter. Good evening to you,

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Speaker 2: and thank you very much indeed for your time tonight.

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Speaker 2: We see inflation increases and excise taxes on alcohol and tobacco.

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Speaker 2: We know the illicit industries in these goods are increasing.

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Speaker 2: Is there a link between a tax increase in tobacco

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Speaker 2: and the rise of the illicit industry? This one necessarily

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Speaker 2: lead automatically to the other.

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Speaker 4: Nateral sus so there's a link. I look at these

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Speaker 4: things as interconnected, and let me close to talk about

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Speaker 4: the increase of inflation. Link also means that in real

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Speaker 4: terms the Minister has maybe adjusted it for inforation. But

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Speaker 4: I have made the point and I think the Minister

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Speaker 4: agrees with me that we must be careful that we

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Speaker 4: don't clear hate the opportunity for arbouitrage between the legal

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Speaker 4: sector and the illegal sector, such as we've seen during

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Speaker 4: the COVID lockdown, and we saw our battling the unintended

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Speaker 4: consequences of the total lockdown of the legal trade, both

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Speaker 4: in alcohol and tobacco. So and to respond to that,

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Speaker 4: whatever policy decision you make, whether it's the decision to

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Speaker 4: increase the price or any other policy choice, if you

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Speaker 4: do not have the capacity to enforce policy, you get

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Speaker 4: an unintended conserquence. And what did have happened in the past,

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Speaker 4: It is merely emboldened and entrenched the illicit trade into

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Speaker 4: the former economy.

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Speaker 2: So we have and we know the rise of the

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Speaker 2: tobacco economy, a lot more reporting now on the rise

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Speaker 2: of the illicit alcohol economy. How worried are you about that?

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Speaker 2: I mean, it seems to be growing nearly as quickly

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Speaker 2: as the tobacco the elicit tobacco industry once did.

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Speaker 4: Now of course, and so if you listen to the

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Speaker 4: president's sonar address, you know we have the strong opponent

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Speaker 4: of it is that happens from now and Joe, we

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Speaker 4: have to be honest enough and admit that our approach

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Speaker 4: to deal with the elicit economy as a whole and

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Speaker 4: the criminal and corrupt aspect there of, we have had

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Speaker 4: a rather fragmented approach to dealing with with do and

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Speaker 4: it's the same phenomenon. So we need firstly to be

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Speaker 4: better coordinated between the various agents of state, which in

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Speaker 4: this case would include at the borders SIVE, the Border

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Speaker 4: Managing's Authority, AVAGA, police forces and the defense to be

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Speaker 4: able to provide a more coordinated response. And secondly, we

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Speaker 4: are a strong proponent that instead of dialuting not only

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Speaker 4: our effort, but instead of saluting the resource allocation, that

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Speaker 4: the Minister should rather fund a project than fund departments

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Speaker 4: or capital investment in infrastructure, in technology and in AI,

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Speaker 4: so that we all are focused on fixing the same

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Speaker 4: problem and not each of us going a different ways.

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Speaker 4: And so my hope is that they're announced made by

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Speaker 4: the President of a national strategy to disrupt limit economy

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Speaker 4: where SCIS will play a significant role, drawing on our

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Speaker 4: experience in the displomat of technology and AI, but working

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Speaker 4: with the other agencies will give us a better chance

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Speaker 4: at as addressing it. Hither too, I have to say

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Speaker 4: that the elicit economy highly organized. Sometimes better you source

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Speaker 4: them up. Have colliferated.

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Speaker 2: Edward keis better. Thank you very much. Indeed, the outgoing

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Speaker 2: commissioner at a sage with the money show seventeen minutes

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Speaker 2: now after six Well let's you now from doctor Duncan PETERSI,

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Speaker 2: the Director General of the National Treasury. Duncan, good evening

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Speaker 2: to you and thank you for your time. There was

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Speaker 2: some expectation that the Minister might use this speech to

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Speaker 2: lay a fiscal anchor and explicit promise to keep debt

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Speaker 2: within certain limits. The Minister now says that will happen

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Speaker 2: in the medium term. Budget policy states, what are you

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Speaker 2: expecting to change between now and then? Are you expecting

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Speaker 2: anything dramatic to happen that prevented you from doing that?

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Speaker 5: Tonight, Good evening, Steven, and good evening to your listeners.

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Speaker 5: What the Minister said today was that the next phase

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Speaker 5: of the fiscal anchor work is really about the consultation

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Speaker 5: required in order to ensure that when we make the

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Speaker 5: legislative proposal that it does in fact pass through the

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Speaker 5: relevant parts of government. So the technical work is complete,

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Speaker 5: and that's what we wanted to ensure is completed by

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Speaker 5: the time the budget comes around. We've done some initial consultations,

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Speaker 5: mainly on the technical side, and now it's really about

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Speaker 5: making sure that further consultations take place, including with Cabinet,

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Speaker 5: with Parliament and with the public at large, so that

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Speaker 5: by the time the MTVPS comes around, we have a

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Speaker 5: technical proposal that has more or less been canvas that

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Speaker 5: sets the basis for a legislative proposal to be made.

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Speaker 2: The changes you've made to encourage savings. So the tax

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Speaker 2: free portion that you can put into retirement savings that's

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Speaker 2: moved from three hundred and fifty thousand round a year

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Speaker 2: to four hundred and thirty thousand. I mean that's a

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Speaker 2: big change. Obviously, you're trying to encourage a culture of saving.

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Speaker 5: Absolutely, and those are among some of the changes that

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Speaker 5: we have made. One is really about how do we

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Speaker 5: encourage a culture of saving. The other adjustments to the

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Speaker 5: thresholds allow small businesses to sell their businesses without the

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Speaker 5: same kind of tax consequences that we've seen before. We've

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Speaker 5: also raised a VAT compulsory registration threshold, which should be

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Speaker 5: supportive for small businesses, amongst a whole host of other changes.

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Speaker 5: So one element of it was about savings and retirement,

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Speaker 5: but there were also quite a number of thresholds that

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Speaker 5: were adjusted with the specific aim of allowing small businesses

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Speaker 5: to operate more freely, to grow more organically, and for

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Speaker 5: small businesses to be bought and sold without the previous

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Speaker 5: kinds of limits that we had.

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Speaker 2: The threshold for small businesses to be registered for that

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Speaker 2: one of the changes you're referring to. I mean, it's

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Speaker 2: gone from one million round a year, which is quite

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Speaker 2: a small turnover nowadays to two point three million round.

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Speaker 2: That's a big change. It's good news for small businesses.

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Speaker 2: It may be a reminder Duncan that this also perhaps

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Speaker 2: should have happened sooner. Is this a threshold that you

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Speaker 2: intend to revisit every year rather than what's happened now

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Speaker 2: one big change kind of almost out of nowhere.

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Speaker 6: Yeah.

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Speaker 5: I think one of the conversations even that we've had

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Speaker 5: internally is how do we manage expectations around these threshold

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Speaker 5: adjustments more clearly and how do we bring a more

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Speaker 5: regular cadence to.

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Speaker 7: How they happen.

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Speaker 5: And so inside the Treasury we are making some changes

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Speaker 5: to how tax policy proposals are processed and also how

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Speaker 5: the adjustments two thresholds take place, so that we don't

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Speaker 5: end up in a situation where, for example, in the

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Speaker 5: case of the VAT registration threshold that was last amended

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Speaker 5: in two thousand and nine, and we don't want a

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Speaker 5: situation going forward where companies have to wait that long.

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Speaker 5: It doesn't mean that thresholds will be adjusted every year,

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Speaker 5: because I think in some cases that's not feasible, but

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Speaker 5: we certainly will be establishing a much more regular cadence

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Speaker 5: to how these thresholds are adjusted.

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Speaker 2: An interesting coming from the Minister about councils. If councils

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Speaker 2: don't meet reform and operational targets, their budgets would be reduced.

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Speaker 2: How are you expecting that to work.

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Speaker 8: Well?

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Speaker 5: The most practical way in which we are giving effect

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Speaker 5: to that Stevens through the influence that we have over

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Speaker 5: conditional grants. We are limited in terms of what we

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Speaker 5: can do for local government equitable share allocations. We can

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Speaker 5: withhold those, but eventually we do have to release them

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Speaker 5: because councils have an entitlement to those funds in many respects.

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Speaker 4: When it comes to.

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Speaker 5: Conditional grants, however, which is mainly for infrastructure delivery, including

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Speaker 5: new infrastructure, rural electrification, infrastructure for basic services and so on,

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Speaker 5: there we have quite a bit more discretion and one

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Speaker 5: of the things we are introducing there is a dual

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Speaker 5: model where municipalities that are able to deliver that infrastructure

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Speaker 5: through conditional grants continue to access their funding, but those

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Speaker 5: who are not and have a track record of being

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Speaker 5: in capable of managing the delivery of those infrastructure projects

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Speaker 5: in their localities, those funds will be redirected either to

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Speaker 5: a capable district who can spend the funds, or to

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Speaker 5: the DBSA and other delivery agencies who can deliver infrastructure

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Speaker 5: on their behalf. So the effect of that will be

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Speaker 5: lower budgets for those municipalities, But because the money is

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Speaker 5: being transferred to others who will delive on their behalf,

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Speaker 5: the infrastructure will still be delivered.

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Speaker 2: In other words, residents don't suffer, but the people who

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Speaker 2: are misspending the money, wasting it, or there are other

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Speaker 2: words I could use, don can They won't get to control.

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Speaker 5: It absolutely, and that's the purpose of this, to ensure

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Speaker 5: that service delivery is not undermined by using capable implementing

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Speaker 5: agents who can ensure that the infrastructure is still delivered

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Speaker 5: for the residents or there there have.

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Speaker 2: Been all sorts of attempts to control the way or

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Speaker 2: to improve the way, rather that municipalities spend money. Do

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Speaker 2: you believe this will work? And I say this because

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Speaker 2: and let me say, it's easier for me to say

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Speaker 2: it than for you. But frankly, the politics of many

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Speaker 2: local councils is I mean, it's almost poisonous. Was the

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Speaker 2: phrase I used earlier, and I don't know if that

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Speaker 2: will respond to what I think is a very important

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Speaker 2: thing you're trying to do. But I don't know if

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Speaker 2: there will be the response that you might be hoping for.

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Speaker 5: Well, I think, fortunately, Stephen, in this case, we don't

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Speaker 5: need the permission of councils or of municipal managers to

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Speaker 5: implement this reform. Conditional grants that are mainly used for

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Speaker 5: infrastructure are decided upon by national transferring officers in consultation,

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Speaker 5: for example, the Director General of Water and Sanitation and

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Speaker 5: so on, in consultation with a national treaty. And so

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Speaker 5: this is the kind of reform that we can introduce

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Speaker 5: without the consultation and engagement that will be required for

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Speaker 5: some of the more struck reforms that may be needed

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Speaker 5: in some of these.

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Speaker 2: Areas, Doctor Duncan Peters, thank you very much. Indeed, the

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Speaker 2: Director General in the National Treasury, we'll unpack some more

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Speaker 2: of those municipal reforms with Milanikoleni in just a humor Stunkan,

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Speaker 2: thank you very much. Indeed, on it a very busy day.

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Speaker 2: Twenty five minutes now after six.

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Speaker 7: O'clock the money Show, the Market.

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Speaker 2: Chris Stewart's portfolio manager at ninety one Chris good evening,

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Speaker 2: the RAND seemed to like the budget, slightly stronger after

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Speaker 2: the budget than it was at the start. I don't

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Speaker 2: know how much of a factor the RAND was the

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Speaker 2: budget was because there have so many other factors going on,

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Speaker 2: but certainly seemed to be a positive start.

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Speaker 6: Yeah, I mean, given what commodities were doing today, I

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Speaker 6: think the RAND was itching to get out of the block.

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Speaker 6: There was just a little bit of a bit of

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Speaker 6: a hiatus this morning until the budget actually hit the wires,

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Speaker 6: and after that there was a.

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Speaker 9: Modest strengthening in the RAND.

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Speaker 6: The bond market seemed to like it quite as well, so,

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Speaker 6: you know, not huge amounts of massive market moving news

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Speaker 6: in the budget. In fact, one of the most boring

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Speaker 6: budgets I've seen for many, many years. And I think boring,

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Speaker 6: when used as an adjective to describe budget is.

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Speaker 9: Probably quite a good thing.

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Speaker 6: And you know, for the first time in a while,

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Speaker 6: I think we're staring down a budget that has been

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Speaker 6: conservatively strucking. If commodity prices can do anything like hold

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Speaker 6: the levels that they've got right now, there's probably upside

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Speaker 6: risks to the revenue side of the budget, which means

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Speaker 6: come medium term budgetary policy statement time in October this year,

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Speaker 6: we might be looking in better shape than as indicated

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Speaker 6: as a forward looking view right now.

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Speaker 2: Generally speaking, to have if you consider where we were

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Speaker 2: a year ago, the budget that didn't happen, and where

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Speaker 2: we are now, it's a completely different universe.

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Speaker 6: It is a completely different universe. I think we can

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Speaker 6: take some credit for it. I don't think we can

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Speaker 6: take as a country too much credit for it. A

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Speaker 6: lot has been very very supportive, a lot of some

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Speaker 6: of the global developments has been very supportive of emerging

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Speaker 6: markets generally, and I think a lot of some of

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Speaker 6: the global macroeconomic and global geopolitic you know, developments over

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Speaker 6: the last twelve months have been very very positive for

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Speaker 6: commodity prices as well. And you know, as a commodity

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Speaker 6: producing and exporting country, you know, very strong goal price,

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Speaker 6: very strong platinum price has really been an incredibly strong

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Speaker 6: tailwind for the domestic economy.

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Speaker 2: Now, on that point, val Terra, the platinum producer, their

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Speaker 2: earnings double because of the price of platinum. They picked

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Speaker 2: a good day as well to announce it.

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Speaker 6: Yeah, they did, you know, and and beating and beating

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Speaker 6: handsomely relative to expectations that have really been chasing the

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Speaker 6: PGM basket over the last twelve months. And you know,

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Speaker 6: as the market basket price goes higher earnings expectations they

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Speaker 6: catch up. And clearly they hadn't played catch up quite

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Speaker 6: enough with a handsome earnings beat, you know, partly due

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Speaker 6: to some pretty decent, uh, you know, pretty decent cost control,

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Speaker 6: but mainly due to the PGA basket over the period,

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Speaker 6: you know, spitting out a lot of cash and as

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Speaker 6: a result that we saw a special dividend that the

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Speaker 6: market didn't see coming in the market really reacting very

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Speaker 6: favorably to to Voltaira's results, probably starting to price in

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Speaker 6: quite elevated PGM prices, but you know it results are

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Speaker 6: backward looking at as long as the basket price keeps

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Speaker 6: going up, I think the stock price will probably follow it.

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Speaker 2: And then the Motors group in the automotive sector, we

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Speaker 2: bought a lot more new cars in the second half

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Speaker 2: of last year and that really helped them, even though

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Speaker 2: a large part of their work is actually in the

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Speaker 2: second hand car market.

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Speaker 6: Yeah, I mean yes, and you know there's there's large

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Speaker 6: parts of their business that aren't really directly related to

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Speaker 6: new or second and vehicle sales, and there's portions of

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Speaker 6: their business that are outside of South Africa and those

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Speaker 6: portions the business probably dragging down the overall result the

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Speaker 6: start performer really being you know, the SA motor sales.

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Speaker 9: Business if you like.

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Speaker 6: And you know, despite some fairly heavy competition from some

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Speaker 6: of the Chinese brands, we're all seeing more and more

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Speaker 6: Chinese cars now on the roads and fairly compelling value

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Speaker 6: propositions in terms of what you can get for your money.

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Speaker 9: Motors which isn't really represented in.

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Speaker 6: The Chinese brand still holding its own and doing pretty well,

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Speaker 6: and that caused the result to be pretty decent but

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Speaker 6: probably not quite a good enough relative to the market's expectations.

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Speaker 9: As a result at the market voting with their feet

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Speaker 9: on Motors today.

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Speaker 2: And then Bidcore most of their operations outside the country,

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Speaker 2: but they are listed on the JC. They provide food services.

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Speaker 2: Their revenue up six percent in constant currencies, and I

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Speaker 2: must say in many of their markets things are quite

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Speaker 2: tight at the moment, so that's good growth.

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Speaker 6: Yeah, I mean, it's not a bad number, a little

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Speaker 6: lower than what we've become accustomed to from Bitcorp.

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Speaker 2: Over time.

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Speaker 6: So in reporting currency terms, revenue up seven, operating profit

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Speaker 6: up eight, headline up nine, and dividends up ten.

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Speaker 9: It was kind of that sort of story which is okay, not.

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Speaker 6: Bad, not fantastic, mixed bag geographically, the Australasian business showing

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Speaker 6: some signs of stress, the European business doing particularly well.

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Speaker 9: The other business is more of a mixed bag, but

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Speaker 9: not bad.

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Speaker 6: And I think it was the outlook statement that got

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Speaker 6: the market a little upset about Bidcop today. You know,

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Speaker 6: constant currency, the age, you know, first half, second half

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Speaker 6: split means they're roughly on track to deliver market expectations

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Speaker 6: from earnings in constant currency. But Bidcop warning quite clearly

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Speaker 6: that the current degree of rand strength it was seeing

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Speaker 6: is going to make it quite difficult if the rand

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Speaker 6: stays at the level it is for them to meet

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Speaker 6: market expectations in rands for the second half of the year,

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Speaker 6: as the offshore earnings are going to meet something of

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Speaker 6: a headwind on translation back into domestic currency.

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Speaker 2: Christian thanks very much, indeed, portfolio manager at A ninety one,

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Speaker 2: bringing the time now to six thirty.

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Speaker 9: On The Money Show, Stephen on seven oh two one

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Speaker 9: seven two.

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Speaker 2: Well conversations of course tonight about the budget. As you

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Speaker 2: can imagine some response to what you've heard so far.

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Speaker 10: Good afternoon, Babba Steven. Good afternoon to you and the

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Speaker 10: seven oh two listeners.

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Speaker 11: Now, I'm not one to praise the ruling party and

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Speaker 11: our governing coalition currently.

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Speaker 10: However, Babba Steven, I must say, as.

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Speaker 11: Somebody in finance, I'm very, very impressed with this particular budget.

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Speaker 11: No particularly from the fact that it sounds or it

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Speaker 11: feels like they've listened to the people and they're not.

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Speaker 10: As tone deaf as we thought.

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Speaker 11: They are a little bit of disappointment for your tobacco

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Speaker 11: and alcohol companies on that excise duty rising and inflation. However,

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Speaker 11: I think when we look at the rest of the budget,

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Speaker 11: particularly when it comes to things like bracket creed and

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Speaker 11: they're adjusting those tax brackets, they've actually listened to the

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Speaker 11: people and particularly explain people who should and deserve to

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Speaker 11: be listened to.

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Speaker 10: I'm highly impressed. This is CEA westrict on.

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Speaker 8: The total amounts that you can contribute to retirement fund

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Speaker 8: that qualifiers for tax reduction. Research shows that very few

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Speaker 8: people contribute the total all the way up to the

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Speaker 8: maximum and if we have to think about it. The

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Speaker 8: increasing the threshold only assists those at the very top

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Speaker 8: who can contribute that much, and we're considering contributing more

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Speaker 8: but held back because they didn't want to contribute more

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Speaker 8: than what the threshold allows. It doesn't help any savers

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Speaker 8: who are contributing less than that. So really it's only

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Speaker 8: going to benefit people at the very top of the

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Speaker 8: income earning in South Africa, and it won't incentivize increased

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Speaker 8: savings in the middle class, where it's much more important.

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Speaker 8: Though were incentivized savings. The wealthy class already shows very

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Speaker 8: very strong savings behavior. So you have to ask if

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Speaker 8: this change is really motivated by, you know, the economics

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Speaker 8: of trying to incentivize savings, or if it's motivated by

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Speaker 8: political decisions to try and make happy those are the

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Speaker 8: highest income earning portion of our society.

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Speaker 2: Yeah, it's an interesting question. I mean, I'd probably come

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Speaker 2: straight back and say, I don't know if there's anything

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Speaker 2: wrong with making the people who pay the highest levels

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Speaker 2: of tax happier. I can imagine the strong argument against

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Speaker 2: that too, as here really enjoyed your point as well.

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Speaker 2: I mean, I do think you get a sense that

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Speaker 2: things seem to be looking up. Twenty minutes now to seven.

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Speaker 1: The Laney Show with Stephen krutis live on ninety two

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Speaker 1: point seven and one O six FM, streaming on the

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Speaker 1: Prime Media Plus.

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Speaker 3: NAP and DStv channel eight five six.

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Speaker 2: Sixteen minutes to seven the time. What you heard earlier

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Speaker 2: the Director General in the National Treasury, Duncan Peter's explaining

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Speaker 2: the Finance comments about councils that don't meet operational and

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Speaker 2: reform targets, their financial control over their infrastructure budgets would

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Speaker 2: be reduced. That money then would be given to other

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Speaker 2: age sees like the Development Bank, who would then build

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Speaker 2: the infrastructure so the residents don't suffer. Mayerlani Collini is

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Speaker 2: a municipal governance expert and group Chief Advisor in Tesoor Consulting. Miolani,

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Speaker 2: Good evening. We've tried so many ways to get counsels

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Speaker 2: to spend their money properly. Do you think there's much

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Speaker 2: chance that this will work? They won't lose their primary budget,

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Speaker 2: but they will lose some financial control.

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Speaker 12: Good evening, Stiven, and good evening to the listeners. I

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Speaker 12: think what we have come to accept now is that

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Speaker 12: due to different you know, municipalities basically what we would

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Speaker 12: call heterogeneous in nature, from a skills point of view,

439
00:25:40,359 --> 00:25:43,720
Speaker 12: from their ability point of view, as well as you know,

440
00:25:43,760 --> 00:25:47,800
Speaker 12: the ability to manage their own finances. It has come

441
00:25:47,840 --> 00:25:51,320
Speaker 12: to light that not all municipalities really need to have

442
00:25:51,400 --> 00:25:54,840
Speaker 12: all functions that they have within house if they can

443
00:25:54,880 --> 00:25:59,000
Speaker 12: have partnerships such as the implementing agents, whether it's the DBSA,

444
00:25:59,160 --> 00:26:05,000
Speaker 12: whether it's the Municipal Infrastructure Support Agency, and other agencies

445
00:26:05,000 --> 00:26:07,280
Speaker 12: that are there within the government. And I think that

446
00:26:07,400 --> 00:26:10,720
Speaker 12: is the way that cooperative government is supposed to be

447
00:26:11,280 --> 00:26:14,520
Speaker 12: where they support for municipalities that they need to be

448
00:26:14,600 --> 00:26:18,600
Speaker 12: able to do various functions. Is from an infrastructure point

449
00:26:18,640 --> 00:26:21,240
Speaker 12: of view, and even looking at you know, things like

450
00:26:21,320 --> 00:26:24,639
Speaker 12: shared services, perhaps that can be put into one place

451
00:26:24,680 --> 00:26:27,880
Speaker 12: to support those municipalities. So it's a formula that would

452
00:26:27,880 --> 00:26:31,320
Speaker 12: believe that, if tried, could perhaps start to bring better

453
00:26:31,359 --> 00:26:35,160
Speaker 12: results as long as there is coordination from a national

454
00:26:35,280 --> 00:26:38,159
Speaker 12: as well as provincial right down to the municipality and

455
00:26:38,240 --> 00:26:42,280
Speaker 12: all of those agencies, because bureaucracy could be the death

456
00:26:42,400 --> 00:26:44,639
Speaker 12: of some of these great initiatives.

457
00:26:45,720 --> 00:26:47,639
Speaker 2: I mean, I have to say, I mean I wanted

458
00:26:47,680 --> 00:26:50,600
Speaker 2: to work meil Lannie. I just I used the phrase

459
00:26:50,680 --> 00:26:55,080
Speaker 2: poisonous earlier to describe the politics in some of these councils.

460
00:26:55,280 --> 00:26:57,160
Speaker 2: If you look at the politics there, I can't see

461
00:26:57,160 --> 00:26:59,040
Speaker 2: how they could produce good outcomes.

462
00:27:00,240 --> 00:27:03,080
Speaker 12: I think the politics in the way that things are

463
00:27:03,119 --> 00:27:06,160
Speaker 12: at and for the benefit of the listeners as well,

464
00:27:06,240 --> 00:27:09,560
Speaker 12: the type of governance that we have as a country

465
00:27:09,720 --> 00:27:13,520
Speaker 12: is basically for a mature or a first World country.

466
00:27:13,960 --> 00:27:17,240
Speaker 12: A case in point. Our system comes from Canada, which

467
00:27:17,240 --> 00:27:20,159
Speaker 12: has three spheres of government, and they're able to do

468
00:27:20,280 --> 00:27:23,560
Speaker 12: all of these things because of the capability, the skills

469
00:27:23,560 --> 00:27:26,640
Speaker 12: and so on. But the politics as well as are

470
00:27:26,720 --> 00:27:30,400
Speaker 12: not as divergent as we have here or multi parties

471
00:27:30,440 --> 00:27:33,560
Speaker 12: as we have here in South Africa, there's also maturity

472
00:27:33,640 --> 00:27:36,240
Speaker 12: from a democratic point of view. So really, I think

473
00:27:36,280 --> 00:27:39,679
Speaker 12: the politics you know, this side are quite sleary, They

474
00:27:39,680 --> 00:27:43,000
Speaker 12: are quite difficult, They are quite complex, and they often

475
00:27:43,119 --> 00:27:46,960
Speaker 12: can blow out small issues into making them big issues.

476
00:27:47,080 --> 00:27:49,159
Speaker 12: So I think for us, you know, for us to

477
00:27:49,240 --> 00:27:52,800
Speaker 12: at least manage those aspects, we're hoping the local government

478
00:27:52,800 --> 00:27:55,360
Speaker 12: white paper would at least look at you know how

479
00:27:55,440 --> 00:27:58,720
Speaker 12: much you know political representation should be there, But be

480
00:27:58,840 --> 00:28:01,399
Speaker 12: that as it may. What we currently is the system

481
00:28:01,440 --> 00:28:05,160
Speaker 12: we have, so I think moreving some of those core functions,

482
00:28:05,240 --> 00:28:08,320
Speaker 12: or it is getting experts to drive those core functions

483
00:28:08,600 --> 00:28:12,359
Speaker 12: without burdening the already strained skills and people who at

484
00:28:12,440 --> 00:28:15,760
Speaker 12: the end, the municipalities could at least lessen the issue

485
00:28:15,760 --> 00:28:19,760
Speaker 12: of politics and that politicians can use that as a

486
00:28:19,800 --> 00:28:22,960
Speaker 12: way to go back to their constituencies to show that

487
00:28:23,000 --> 00:28:26,200
Speaker 12: there's delivery, because that's what we really need, service delivery.

488
00:28:27,280 --> 00:28:30,800
Speaker 2: The Minister also pointed out how councils don't use revenue

489
00:28:30,840 --> 00:28:33,600
Speaker 2: collected for a specific function properly, and the obvious example

490
00:28:33,640 --> 00:28:36,320
Speaker 2: is Joe Berg and the Minister actually, I mean, I

491
00:28:36,359 --> 00:28:38,000
Speaker 2: don't know if he was just using them as an

492
00:28:38,040 --> 00:28:41,080
Speaker 2: example of naming and shaming, but he said the city

493
00:28:41,120 --> 00:28:45,040
Speaker 2: gets nearly twelve billion round a year from residents for water,

494
00:28:45,440 --> 00:28:48,880
Speaker 2: it's only spending one point three billion round on infrastructure.

495
00:28:49,560 --> 00:28:52,840
Speaker 2: I mean the orders to General haven't been able to

496
00:28:53,240 --> 00:28:55,200
Speaker 2: force the council to change their behavior. I don't know

497
00:28:55,240 --> 00:28:59,360
Speaker 2: if the National Treasury can. And yet I mean clearly

498
00:28:59,400 --> 00:29:01,960
Speaker 2: that's uns assendable, as anyone who lives in Jebay could

499
00:29:01,960 --> 00:29:02,280
Speaker 2: tell you.

500
00:29:03,720 --> 00:29:07,480
Speaker 12: Absolutely. And the formula for repairs and maintenance is very

501
00:29:07,520 --> 00:29:11,080
Speaker 12: clear is what the National Treasury gives as a guideline.

502
00:29:11,520 --> 00:29:14,800
Speaker 12: In fact, the very reasons some of the municipalities would

503
00:29:15,000 --> 00:29:19,120
Speaker 12: be threatened to have their equitable share held by the

504
00:29:19,200 --> 00:29:21,960
Speaker 12: National Treasury is because it's not going into the right

505
00:29:22,080 --> 00:29:25,520
Speaker 12: areas such as repairs and maintenance. So that repairs and

506
00:29:25,640 --> 00:29:29,280
Speaker 12: maintenance set aside should at least, you know, be done

507
00:29:29,320 --> 00:29:32,360
Speaker 12: in that way. But Steven, I think the reality of

508
00:29:32,440 --> 00:29:35,160
Speaker 12: where municipalities are at is that there's a lot of

509
00:29:35,240 --> 00:29:39,920
Speaker 12: consubsidization of one service to the other, and that is

510
00:29:39,960 --> 00:29:43,320
Speaker 12: where the chronic issue comes about and where it also

511
00:29:43,480 --> 00:29:47,640
Speaker 12: emanates from some of the unfunded mandays such as libraries.

512
00:29:47,680 --> 00:29:50,360
Speaker 12: Some of the municipalities of libraries, but they are not

513
00:29:50,520 --> 00:29:53,320
Speaker 12: really being funded in the way that they should, and

514
00:29:53,920 --> 00:29:57,160
Speaker 12: municipalities are left to their own devices to be able

515
00:29:57,200 --> 00:29:59,920
Speaker 12: to find the money to close the gaps for the

516
00:30:00,040 --> 00:30:04,640
Speaker 12: those unfunded mandays. So the issue of cross subsidization used

517
00:30:04,640 --> 00:30:07,640
Speaker 12: to come from electricity, which in the hey days was

518
00:30:07,760 --> 00:30:10,840
Speaker 12: cheap and they could at least levy a margin or

519
00:30:10,880 --> 00:30:13,680
Speaker 12: put a margin that would at least give enough revenue

520
00:30:14,000 --> 00:30:17,360
Speaker 12: to cross subsidize all other things. But the reality now

521
00:30:17,360 --> 00:30:21,760
Speaker 12: we're in a difficult economic situation where we're not able

522
00:30:21,800 --> 00:30:24,640
Speaker 12: to come up with cross subsidization. So the business unit

523
00:30:24,800 --> 00:30:27,840
Speaker 12: model that they've come up with is to ring flands

524
00:30:27,920 --> 00:30:33,000
Speaker 12: now revenues of trading services, of electricity, of water and sewer,

525
00:30:33,400 --> 00:30:35,080
Speaker 12: so that you know, at least you know, we can

526
00:30:35,200 --> 00:30:38,960
Speaker 12: save god the infrastructure, because the assets really are the

527
00:30:39,560 --> 00:30:42,680
Speaker 12: ones that generate the money. It's not the money that

528
00:30:42,760 --> 00:30:45,320
Speaker 12: you know, people just paid. If we have issues with

529
00:30:46,200 --> 00:30:51,040
Speaker 12: those assets not being maintained, it diminishes even the revenue

530
00:30:51,120 --> 00:30:55,080
Speaker 12: and creates constellation in the minds of you know, customers

531
00:30:55,080 --> 00:30:57,400
Speaker 12: to be able to freely pay that money. So it's

532
00:30:57,400 --> 00:30:59,520
Speaker 12: a model that at least we're going to at least

533
00:30:59,520 --> 00:31:03,640
Speaker 12: the goal with. However, it means National Trader must still

534
00:31:03,720 --> 00:31:07,000
Speaker 12: go on with the municipal reforms that the Minister also

535
00:31:07,040 --> 00:31:11,160
Speaker 12: spoke about to be able to come up with funding

536
00:31:11,280 --> 00:31:15,920
Speaker 12: those other items which are not necessarily funded within their budgets.

537
00:31:16,200 --> 00:31:19,360
Speaker 2: Mayel Lani thank you. Mayel Lannie holenis the Municipal Governance

538
00:31:19,400 --> 00:31:22,120
Speaker 2: Experts Group, Chief Advisor at in Tesol Consulting.

539
00:31:24,720 --> 00:31:27,000
Speaker 13: The Money Show with Stephen Krutiz is brought to you

540
00:31:27,040 --> 00:31:30,480
Speaker 13: by Absolve Corporate and Investment Banking proud sponsor of the

541
00:31:30,640 --> 00:31:35,400
Speaker 13: LMA ICMA Loan End Capital Markets Africa Summit twenty twenty six,

542
00:31:35,640 --> 00:31:37,320
Speaker 13: Absolut register their FSP.

543
00:31:39,360 --> 00:31:42,080
Speaker 2: Sex Men is now to seventh time with the automotive

544
00:31:42,120 --> 00:31:45,600
Speaker 2: company Motors confirming its headline earnings up by nineteen percent

545
00:31:45,960 --> 00:31:48,200
Speaker 2: in the six months to the end of December. Helps

546
00:31:48,200 --> 00:31:51,680
Speaker 2: that we're buying a lot more cars, Okitt Janserphon Renzberg

547
00:31:51,760 --> 00:31:54,920
Speaker 2: as the group chief executive officer at motus Oarcurt Good Evening,

548
00:31:55,200 --> 00:31:58,080
Speaker 2: the number of passenger cars sold in that period was

549
00:31:58,160 --> 00:32:01,160
Speaker 2: up by what nearly twenty percent. I mean, clearly you're

550
00:32:01,200 --> 00:32:02,200
Speaker 2: benefiting from all of that.

551
00:32:04,080 --> 00:32:07,280
Speaker 14: Good Evening, Stephen, and thank you very much for having

552
00:32:07,360 --> 00:32:08,720
Speaker 14: us yes, one hundred percent.

553
00:32:08,840 --> 00:32:09,000
Speaker 7: Right.

554
00:32:09,040 --> 00:32:11,000
Speaker 14: You know, when the momentum is there, you better make

555
00:32:11,040 --> 00:32:11,720
Speaker 14: sure you take.

556
00:32:11,560 --> 00:32:12,880
Speaker 7: Advantage of it as well.

557
00:32:13,400 --> 00:32:15,880
Speaker 14: And I think the momentum was already there at the

558
00:32:16,000 --> 00:32:19,040
Speaker 14: end of our previous financial year ending June, but it's

559
00:32:19,080 --> 00:32:22,560
Speaker 14: certainly continued into the first half and we've been able to,

560
00:32:23,360 --> 00:32:26,480
Speaker 14: you know, ready, translate it through some strategic focus and

561
00:32:26,560 --> 00:32:30,280
Speaker 14: operational discipline into really good numbers as you have seen.

562
00:32:30,440 --> 00:32:31,280
Speaker 7: Eightline and you.

563
00:32:31,360 --> 00:32:34,280
Speaker 14: Called out, but I suppose also the other pleasing one

564
00:32:34,280 --> 00:32:37,400
Speaker 14: fires as we've also been able to generate large amounts

565
00:32:37,400 --> 00:32:40,040
Speaker 14: of cash and been able to reduce our date considerably,

566
00:32:40,120 --> 00:32:41,760
Speaker 14: So all in all are really good.

567
00:32:41,840 --> 00:32:42,920
Speaker 7: Number FIVEUS.

568
00:32:43,560 --> 00:32:46,680
Speaker 2: You point out that people are moving away from luxury cars,

569
00:32:46,720 --> 00:32:49,040
Speaker 2: and I realized prices has been a factor, but it's

570
00:32:49,120 --> 00:32:52,920
Speaker 2: always been affective as something else maybe changed in the

571
00:32:52,960 --> 00:32:56,760
Speaker 2: industry that you know, a luxury cars just aren't the

572
00:32:56,840 --> 00:32:58,360
Speaker 2: kind of blink they used to be.

573
00:33:00,040 --> 00:33:01,360
Speaker 14: Yeah, I think a lot of it had to do

574
00:33:01,400 --> 00:33:04,840
Speaker 14: with affordability. Over the number of years, I suppose these

575
00:33:04,920 --> 00:33:08,800
Speaker 14: vehicles have become quite expensive and unfortunately, I think as

576
00:33:08,840 --> 00:33:12,800
Speaker 14: how African consumers, we struggle to keep in touch with those.

577
00:33:12,920 --> 00:33:15,760
Speaker 7: But likely for the consumer side.

578
00:33:16,040 --> 00:33:18,080
Speaker 14: What has happened is we have at a number of

579
00:33:18,160 --> 00:33:21,680
Speaker 14: new entrants entering this market in the last two years.

580
00:33:22,120 --> 00:33:25,600
Speaker 14: They've certainly helped to keep pricing at a reasonable level,

581
00:33:25,600 --> 00:33:30,600
Speaker 14: as you have had hardly any price increases on vehicles pricing,

582
00:33:31,280 --> 00:33:33,840
Speaker 14: so the OEMs had to chip in a little bit

583
00:33:34,000 --> 00:33:36,920
Speaker 14: to make sure that they remain price competitive. And at

584
00:33:36,960 --> 00:33:39,360
Speaker 14: the same time we've had interest rates coming down, and

585
00:33:39,400 --> 00:33:42,720
Speaker 14: I suppose from a consumer perspective, you are setting to

586
00:33:42,920 --> 00:33:46,240
Speaker 14: the to the employed who probably had salary increases for

587
00:33:46,280 --> 00:33:49,000
Speaker 14: the last two years. So it's all in all actually

588
00:33:49,040 --> 00:33:51,840
Speaker 14: just been a good place for a consumer who was

589
00:33:51,880 --> 00:33:56,520
Speaker 14: looking for a vehicle. We have seen more activity at

590
00:33:56,520 --> 00:34:00,440
Speaker 14: the entry level, but I suppose you still see sales

591
00:34:00,480 --> 00:34:02,520
Speaker 14: all the way through to even luxury brands today.

592
00:34:03,480 --> 00:34:06,600
Speaker 2: Other people in your space, some of them competitors, I suppose. Okay,

593
00:34:06,680 --> 00:34:09,520
Speaker 2: they've pointed out that they've benefited from investing in cheaper

594
00:34:09,560 --> 00:34:12,719
Speaker 2: Indian and Chinese brands quite early. We know you were

595
00:34:12,760 --> 00:34:14,560
Speaker 2: a little late to that party. Do you think you're

596
00:34:14,600 --> 00:34:16,759
Speaker 2: catching up to the party? Do you are you where

597
00:34:16,760 --> 00:34:19,640
Speaker 2: you want to be as our market shifts towards those cars.

598
00:34:20,719 --> 00:34:24,160
Speaker 14: Yes, I think sometimes it's also being a bit more

599
00:34:24,160 --> 00:34:27,439
Speaker 14: selective what you want. I think in our case, we

600
00:34:27,960 --> 00:34:31,640
Speaker 14: moved into that space and about eighteen or eighteen months

601
00:34:31,719 --> 00:34:34,640
Speaker 14: or two years ago, I think we caught up very fast,

602
00:34:34,640 --> 00:34:37,680
Speaker 14: and I mean, being then the biggest group in the country.

603
00:34:37,719 --> 00:34:40,600
Speaker 14: You also have maybe an unfair advantage when you do

604
00:34:40,840 --> 00:34:44,240
Speaker 14: then eventually talk to these OEMs who did the new entrants.

605
00:34:44,520 --> 00:34:47,680
Speaker 14: I suppose with volume aspirations, they also want to partner

606
00:34:47,719 --> 00:34:48,320
Speaker 14: with us.

607
00:34:48,680 --> 00:34:50,040
Speaker 7: So we've certainly.

608
00:34:49,600 --> 00:34:53,520
Speaker 14: Made very large interroutes into that space, and where we

609
00:34:53,600 --> 00:34:56,680
Speaker 14: stand today I think is a fair chunk and we

610
00:34:56,960 --> 00:35:01,160
Speaker 14: represent all the major brands, whether they Chinese, Indian or otherwise.

611
00:35:02,200 --> 00:35:04,280
Speaker 7: But we're not leaving our.

612
00:35:04,560 --> 00:35:07,799
Speaker 14: Other mature brands still behind. I think, like we said,

613
00:35:08,280 --> 00:35:10,680
Speaker 14: you know, they still the guys who really give you

614
00:35:10,680 --> 00:35:13,320
Speaker 14: the big numbers when it comes to operating profits, for

615
00:35:13,400 --> 00:35:17,880
Speaker 14: the likes of Jeota, Hyundai, Kia, those are really our forwards.

616
00:35:17,920 --> 00:35:19,600
Speaker 14: Even in these six months.

617
00:35:20,440 --> 00:35:23,839
Speaker 2: Okay, you declared an interim dividend, and obviously I think

618
00:35:23,840 --> 00:35:26,160
Speaker 2: you'd be right to be pleased with how things have

619
00:35:26,239 --> 00:35:28,920
Speaker 2: turned out in this period, but you've also done all

620
00:35:28,920 --> 00:35:33,200
Speaker 2: of this while retrenching some workers. You've also changed the

621
00:35:33,239 --> 00:35:36,280
Speaker 2: payment systems for others. We saw the protest from workers

622
00:35:36,680 --> 00:35:40,399
Speaker 2: about that you've been negotiating with the union. I understand they,

623
00:35:40,600 --> 00:35:43,360
Speaker 2: I imagine, would feel quite frustrated to see an interim

624
00:35:43,360 --> 00:35:46,640
Speaker 2: dividend from you while some of them have been retrenched.

625
00:35:48,040 --> 00:35:50,239
Speaker 14: I think you have to put it in perspective and

626
00:35:50,360 --> 00:35:53,120
Speaker 14: also just look in what particular area of the business

627
00:35:53,120 --> 00:35:56,080
Speaker 14: that was relating too, So it was only relating to

628
00:35:56,200 --> 00:35:59,799
Speaker 14: a small part of our retail footprint. Manu to do

629
00:36:00,239 --> 00:36:05,360
Speaker 14: our brands such as VW, Knitsen to some extent for

630
00:36:05,520 --> 00:36:09,920
Speaker 14: it and maybe Mercedes, while obviously the profit generation comes

631
00:36:09,920 --> 00:36:13,200
Speaker 14: from a much larger group that's internationally represented.

632
00:36:14,200 --> 00:36:16,640
Speaker 7: You talk about the retrenchments.

633
00:36:16,160 --> 00:36:20,000
Speaker 14: Yes, we did for trend sixty seven individuals, which is unfortunate,

634
00:36:20,520 --> 00:36:23,799
Speaker 14: but was also a particular reason for that, and that

635
00:36:23,920 --> 00:36:26,880
Speaker 14: is that those brands are currently loss making while the

636
00:36:26,920 --> 00:36:28,200
Speaker 14: group is performing as.

637
00:36:28,080 --> 00:36:31,239
Speaker 7: Well as it is. So it's also a question.

638
00:36:31,040 --> 00:36:34,120
Speaker 14: Of having to cut your class accordingly to what is

639
00:36:34,160 --> 00:36:36,960
Speaker 14: selling in the market, and unfortunately they were represented in

640
00:36:37,000 --> 00:36:40,520
Speaker 14: a brand it's really been shrinking. However, the I think

641
00:36:40,520 --> 00:36:43,360
Speaker 14: it is important to note that the overall group represents

642
00:36:43,440 --> 00:36:47,960
Speaker 14: twenty thousand people over four continents and really the rest

643
00:36:48,000 --> 00:36:50,960
Speaker 14: of the business have performed exceptionally well. And yet you

644
00:36:51,040 --> 00:36:54,040
Speaker 14: have to at certain times and times and place actually

645
00:36:54,080 --> 00:36:57,680
Speaker 14: do have to look at some businesses that require more focus.

646
00:36:58,120 --> 00:37:01,399
Speaker 14: In our presentation today we highlight at three of those,

647
00:37:01,520 --> 00:37:04,760
Speaker 14: one being exactly what you were talking those shrinking brands

648
00:37:04,760 --> 00:37:05,960
Speaker 14: in the South African space.

649
00:37:06,000 --> 00:37:06,640
Speaker 7: Even though the.

650
00:37:06,640 --> 00:37:11,359
Speaker 14: Overall retail essay business increased by twenty two percent, there

651
00:37:11,760 --> 00:37:14,640
Speaker 14: was an area there where there's actually loss making and

652
00:37:14,719 --> 00:37:16,840
Speaker 14: the loss is increased by twenty nine percent.

653
00:37:16,920 --> 00:37:19,080
Speaker 7: So there is an area of the business that.

654
00:37:19,120 --> 00:37:22,560
Speaker 14: Do need focus and we needed to get the custom

655
00:37:22,640 --> 00:37:26,080
Speaker 14: income ratio right in that specific area, while it's not

656
00:37:26,160 --> 00:37:29,080
Speaker 14: necessarily true for the whole businesses as a whole.

657
00:37:30,040 --> 00:37:32,880
Speaker 2: So is there retrenchment process over for the moment.

658
00:37:34,280 --> 00:37:37,279
Speaker 14: Yes, No, the retrenchment process was in fact already done

659
00:37:37,280 --> 00:37:40,879
Speaker 14: in January. The other piece that I think he even

660
00:37:40,880 --> 00:37:42,799
Speaker 14: had on your show was around the fact that we

661
00:37:42,840 --> 00:37:45,360
Speaker 14: said on the incentive side, nothing to do with service,

662
00:37:45,400 --> 00:37:46,319
Speaker 14: but the incentives.

663
00:37:46,600 --> 00:37:48,200
Speaker 7: We also needed to look at that.

664
00:37:50,880 --> 00:37:54,319
Speaker 14: For the support staff who were also receiving incentives, and

665
00:37:54,360 --> 00:37:56,799
Speaker 14: we said, on that particular case, we needed to look

666
00:37:56,800 --> 00:38:00,160
Speaker 14: at those structurings. That process we have, in fact, we

667
00:38:00,239 --> 00:38:03,120
Speaker 14: stand today not to actually implement it in its full extent.

668
00:38:04,200 --> 00:38:06,839
Speaker 14: We have issue to letters and the staff has in

669
00:38:06,880 --> 00:38:09,719
Speaker 14: fact signed them I think comparing I think for individuals.

670
00:38:10,120 --> 00:38:12,800
Speaker 14: So as we stand, that process is in fact complete

671
00:38:12,800 --> 00:38:15,600
Speaker 14: it but we haven't implemented it to its full extent yet.

672
00:38:16,360 --> 00:38:18,360
Speaker 14: But we are in talks with our staff and that

673
00:38:18,560 --> 00:38:22,560
Speaker 14: the particular regard, and not necessarily I think that the

674
00:38:22,640 --> 00:38:26,839
Speaker 14: union any longer the union in fact that particular court

675
00:38:26,880 --> 00:38:30,200
Speaker 14: case they actually did lose, so we didn't have to

676
00:38:30,239 --> 00:38:32,680
Speaker 14: talk to them anymore, and we're actually talking to our staff.

677
00:38:33,080 --> 00:38:35,680
Speaker 14: But listen, we're also working with our staff to also

678
00:38:35,719 --> 00:38:38,600
Speaker 14: make sure that we find, you know, alternatives that also

679
00:38:38,680 --> 00:38:39,640
Speaker 14: works in the long term.

680
00:38:39,680 --> 00:38:41,120
Speaker 7: This is all about the long term.

681
00:38:40,960 --> 00:38:43,759
Speaker 14: Sustainability of a business, and like I said, if there's

682
00:38:43,760 --> 00:38:46,600
Speaker 14: a particular small area of the business that requires attention,

683
00:38:46,760 --> 00:38:48,759
Speaker 14: of course we need to look at that. But it's

684
00:38:48,800 --> 00:38:52,160
Speaker 14: also protecting the jobs for the other twenty thousand people

685
00:38:52,200 --> 00:38:53,760
Speaker 14: that are still working for us.

686
00:38:54,120 --> 00:38:56,680
Speaker 2: Okay the answer, Van Rinsberg, thank you, the chief executive

687
00:38:56,680 --> 00:38:57,640
Speaker 2: officer at MOTUS.

688
00:38:57,719 --> 00:39:02,120
Speaker 1: Just on seven o'clock and now The Money Show with

689
00:39:02,280 --> 00:39:04,640
Speaker 1: Stephen Credits on seven oh two.

690
00:39:05,160 --> 00:39:06,080
Speaker 7: Let's walk at all.

691
00:39:07,120 --> 00:39:09,239
Speaker 2: The Money Show with Stephen Crotis is brought to you

692
00:39:09,360 --> 00:39:12,560
Speaker 2: by ABSOR Corporate and Investment Banking, proud sponsor of the

693
00:39:12,719 --> 00:39:17,200
Speaker 2: LMA ICMA Loan and Capital Markets Africa Summit twenty twenty six.

694
00:39:17,239 --> 00:39:21,879
Speaker 2: Absent is a registered FSP. Good evening, eight minutes after

695
00:39:22,040 --> 00:39:24,879
Speaker 2: seven the time we'll talk business unusual in just a moment.

696
00:39:24,960 --> 00:39:28,759
Speaker 2: Peter Tolman, a Senior partner emeritus at the Boston consulting group,

697
00:39:28,840 --> 00:39:34,840
Speaker 2: talk about what it is that actually talk creates leadership.

698
00:39:34,880 --> 00:39:38,280
Speaker 2: So many people talk about a person with leadership ability.

699
00:39:39,200 --> 00:39:42,080
Speaker 2: He suggests, actually we should depersonalize it. I think that's

700
00:39:42,120 --> 00:39:45,120
Speaker 2: an important conversation. Wendy Nola has a story for you

701
00:39:45,160 --> 00:39:48,400
Speaker 2: about car insurance, and then rarely looking forward to speaking

702
00:39:48,440 --> 00:39:51,640
Speaker 2: to Peter Armitage, the CEO of Anchor Capital. He's your

703
00:39:51,719 --> 00:39:55,239
Speaker 2: shape shift of this evening and in fact fascinated because

704
00:39:55,239 --> 00:39:57,759
Speaker 2: he's sort of called the market right for so long

705
00:39:58,239 --> 00:40:01,000
Speaker 2: compared to most other people, and how how that's happened.

706
00:40:01,320 --> 00:40:04,000
Speaker 2: And I think that's quite interesting. I'm really looking forward

707
00:40:04,000 --> 00:40:05,759
Speaker 2: to that conversation. I think there's quite a lot to

708
00:40:06,160 --> 00:40:08,080
Speaker 2: sort of glean from him. They'll ask him a couple

709
00:40:08,080 --> 00:40:10,839
Speaker 2: of questions too, about, you know, what was happening in

710
00:40:10,920 --> 00:40:14,160
Speaker 2: markets compare for example, what's happening now to the global

711
00:40:14,160 --> 00:40:16,600
Speaker 2: financial crisis. Things like that. I think there's a lot

712
00:40:16,600 --> 00:40:18,600
Speaker 2: to look forward to there. Oh double one double A

713
00:40:18,640 --> 00:40:20,719
Speaker 2: three oh seven O two two one four four six

714
00:40:20,800 --> 00:40:23,000
Speaker 2: O five six seven and YOURVI on the budget please

715
00:40:23,280 --> 00:40:25,799
Speaker 2: on seven two seven oh two one seven oh two.

716
00:40:26,760 --> 00:40:30,680
Speaker 1: The Lonely Show with Stephen krutis live on ninety two

717
00:40:30,719 --> 00:40:34,080
Speaker 1: point seven and one six FM streaming on the Prime

718
00:40:34,120 --> 00:40:34,960
Speaker 1: Media Plus.

719
00:40:34,760 --> 00:40:37,720
Speaker 3: NAP and DStv channel eight five six.

720
00:40:39,400 --> 00:40:42,880
Speaker 2: Just a comment of I may about this year's budget

721
00:40:43,200 --> 00:40:46,359
Speaker 2: and if you compare where we were this time last year,

722
00:40:46,440 --> 00:40:49,400
Speaker 2: people were talking about the end of the National Coalition.

723
00:40:49,520 --> 00:40:52,040
Speaker 2: I know everyone calls it the GNU, I'm afraid I don't,

724
00:40:52,680 --> 00:40:54,960
Speaker 2: But people were saying this was the end of the

725
00:40:55,040 --> 00:40:57,360
Speaker 2: National Coalition. No one knew it was going to happen. Next.

726
00:40:57,760 --> 00:40:59,400
Speaker 2: Things were going to get worse. We were going to

727
00:40:59,440 --> 00:41:02,279
Speaker 2: have to priest taxes. There was a twenty billion round hole.

728
00:41:02,560 --> 00:41:04,600
Speaker 2: And look at where we are now. Things are so

729
00:41:04,719 --> 00:41:09,200
Speaker 2: much better now, And then ask yourself this question, are

730
00:41:09,200 --> 00:41:13,200
Speaker 2: they better now because of things we did or because

731
00:41:13,239 --> 00:41:16,080
Speaker 2: of things that we had no control over? Now, in

732
00:41:16,120 --> 00:41:18,200
Speaker 2: some ways it is because of things we did. So

733
00:41:18,239 --> 00:41:20,760
Speaker 2: the coalition partners found each other. There was that famous

734
00:41:20,760 --> 00:41:23,880
Speaker 2: workshop afterwards where the fuss had all died down and

735
00:41:23,920 --> 00:41:26,359
Speaker 2: everybody sort of got together. They watched a cricket match

736
00:41:26,360 --> 00:41:29,880
Speaker 2: and everybody, I don't know, maybe they sung Combaya or something,

737
00:41:29,920 --> 00:41:31,600
Speaker 2: but they all seem to be getting on better. So

738
00:41:31,640 --> 00:41:35,080
Speaker 2: that's very important. Okay, that's something we did look at

739
00:41:35,080 --> 00:41:38,000
Speaker 2: the things we didn't do. I don't think really a

740
00:41:38,120 --> 00:41:41,120
Speaker 2: South Africa we brought inflation down. Lots of other international

741
00:41:41,160 --> 00:41:45,200
Speaker 2: factors did that. Rein did that too. We were certainly

742
00:41:45,200 --> 00:41:47,640
Speaker 2: not responsible for higher golden platinum prices. We have the

743
00:41:47,640 --> 00:41:52,239
Speaker 2: Trump administration to thank for that largely. So that's where

744
00:41:52,280 --> 00:41:55,319
Speaker 2: it was important. What we must do, though, and where

745
00:41:55,360 --> 00:41:59,439
Speaker 2: we can really sort of take over and can sort

746
00:41:59,440 --> 00:42:02,440
Speaker 2: of take charge of ourselves, is to make the point

747
00:42:02,680 --> 00:42:05,440
Speaker 2: that when these moments come, these good moments, we need

748
00:42:05,480 --> 00:42:08,239
Speaker 2: to use them. And if we do that, then we

749
00:42:08,280 --> 00:42:10,799
Speaker 2: can start to claim a bit more responsibility. So I'm

750
00:42:10,800 --> 00:42:12,880
Speaker 2: pleased with how things have turned out, don't get me wrong.

751
00:42:13,320 --> 00:42:15,799
Speaker 2: We just need to remember how we got here. And

752
00:42:15,920 --> 00:42:18,440
Speaker 2: kind of on that point, we've been talking about municipalities,

753
00:42:18,560 --> 00:42:21,279
Speaker 2: Mark messaging on a seven two seven two one seven

754
00:42:21,320 --> 00:42:25,080
Speaker 2: oh two saying if municipalities need professionals to manage and

755
00:42:25,120 --> 00:42:28,480
Speaker 2: build their infrastructure, fine, but then their salaries must be

756
00:42:28,520 --> 00:42:32,040
Speaker 2: reduced because they can't do their entire job. Mark. That's

757
00:42:32,040 --> 00:42:33,880
Speaker 2: a really interesting point, actually. I mean, if you're a

758
00:42:33,960 --> 00:42:36,160
Speaker 2: municipal manager and you get a salary of let's call

759
00:42:36,200 --> 00:42:38,880
Speaker 2: it four million rand because you've run joebig or something

760
00:42:38,960 --> 00:42:41,560
Speaker 2: or ecroll any wherever it was, and you're not actually

761
00:42:41,560 --> 00:42:45,200
Speaker 2: managing infrastructre because someone else's maybe that portion should be

762
00:42:45,239 --> 00:42:47,400
Speaker 2: taken from me. That's a very interesting point. The municipal

763
00:42:47,400 --> 00:42:50,000
Speaker 2: managers are often in the middle of that kind of

764
00:42:50,160 --> 00:42:54,440
Speaker 2: poisonous politics. I spoke about eleven after seven the money.

765
00:42:54,200 --> 00:42:56,080
Speaker 3: Show business unusual.

766
00:42:57,120 --> 00:42:59,919
Speaker 2: We often talk about leadership in a very personal way.

767
00:43:00,080 --> 00:43:02,520
Speaker 2: This person's a good leader, this person's a bad leader.

768
00:43:02,840 --> 00:43:05,239
Speaker 2: This is what makes a good leader in terms of

769
00:43:05,280 --> 00:43:09,600
Speaker 2: a person. But a suggestion actually from Peter Toallman that

770
00:43:09,680 --> 00:43:12,359
Speaker 2: we should look at things in a different way and

771
00:43:12,440 --> 00:43:17,680
Speaker 2: maybe almost depersonalized leadership. Peter Tallman is a senior partner

772
00:43:17,719 --> 00:43:20,960
Speaker 2: emeritus at the Boston Consulting Group and founding leader of

773
00:43:21,040 --> 00:43:24,200
Speaker 2: their CEO advisory practice. On the line now from the

774
00:43:24,360 --> 00:43:26,520
Speaker 2: US Peter, good day to you, and thank you very

775
00:43:26,560 --> 00:43:28,560
Speaker 2: much indeed for taking the time. I'm very glad that

776
00:43:28,600 --> 00:43:30,680
Speaker 2: you were able to speak to us tonight, so thank you.

777
00:43:31,239 --> 00:43:34,200
Speaker 2: We often have this idea of a I suppose a

778
00:43:34,320 --> 00:43:37,000
Speaker 2: superstar CEO. I can think of several American examples. I

779
00:43:37,040 --> 00:43:41,800
Speaker 2: can think of South African examples too, and then actually

780
00:43:42,200 --> 00:43:44,840
Speaker 2: suddenly they fail, something goes wrong, they move into a

781
00:43:44,880 --> 00:43:48,560
Speaker 2: new position, it doesn't work out the research that you've done.

782
00:43:48,680 --> 00:43:51,719
Speaker 2: What does that maybe tell us about the success I

783
00:43:51,760 --> 00:43:53,360
Speaker 2: put that in verted commas of a CEO.

784
00:43:55,920 --> 00:44:00,000
Speaker 5: Well, the Superstar first alders to say, Stephen, the Superstars

785
00:44:00,000 --> 00:44:05,760
Speaker 5: CEO is a relic I think of sort of nineteen

786
00:44:05,800 --> 00:44:10,759
Speaker 5: eighties nineteen nineties thinking, and the success model for CEOs

787
00:44:10,840 --> 00:44:14,960
Speaker 5: these days, particularly with very large corporations, is somewhat different

788
00:44:15,000 --> 00:44:17,239
Speaker 5: from that. But I think the point look, there are

789
00:44:17,280 --> 00:44:21,640
Speaker 5: people that have good natural leadership capabilities, and there are

790
00:44:21,640 --> 00:44:25,960
Speaker 5: other people that are less naturally capable as leaders. But

791
00:44:26,160 --> 00:44:29,880
Speaker 5: company leadership tends to be contextual in the sense that

792
00:44:30,239 --> 00:44:33,359
Speaker 5: companies are often in very different types of positions. Some

793
00:44:33,440 --> 00:44:38,239
Speaker 5: are fast moving and innovatives, some are slower moving and regulated.

794
00:44:38,360 --> 00:44:40,640
Speaker 5: Some have a strong starting position, some have a weak

795
00:44:40,680 --> 00:44:44,799
Speaker 5: starting position. And it turns out that the type of

796
00:44:45,200 --> 00:44:49,839
Speaker 5: leader that are successful in some circumstances is different from

797
00:44:49,840 --> 00:44:54,520
Speaker 5: the type of leader that's successful in other circumstances. One

798
00:44:54,560 --> 00:44:57,520
Speaker 5: piece of evidence that I think shows that fairly convincingly

799
00:44:57,800 --> 00:45:01,799
Speaker 5: is that second time CEOs who get hired based on

800
00:45:01,840 --> 00:45:05,800
Speaker 5: a track record having been somewhat successful as a CEO

801
00:45:06,880 --> 00:45:11,480
Speaker 5: have no better success record than first time CEOs.

802
00:45:12,640 --> 00:45:15,560
Speaker 2: So then I mean, if the context matters, and obviously

803
00:45:15,600 --> 00:45:20,839
Speaker 2: it does, what sort of disciplines remain? I mean, what

804
00:45:20,880 --> 00:45:24,880
Speaker 2: sort of practices tend to create successful CEOs? If I

805
00:45:24,880 --> 00:45:25,439
Speaker 2: can put it.

806
00:45:25,400 --> 00:45:33,560
Speaker 5: Like that, Well, probably my most important data sources a

807
00:45:33,600 --> 00:45:36,319
Speaker 5: piece of research that we did about five years ago

808
00:45:36,560 --> 00:45:43,120
Speaker 5: where we looked comprehensively across over four thousand companies seven

809
00:45:43,239 --> 00:45:48,239
Speaker 5: thousand CEO transitions, and we measured the success of each

810
00:45:48,280 --> 00:45:52,640
Speaker 5: CEO based on how well they did, how well the

811
00:45:52,680 --> 00:45:56,000
Speaker 5: company did relative to their starting points, and relative to

812
00:45:56,040 --> 00:45:59,480
Speaker 5: the industrial sector that they were involved in, based on

813
00:45:59,560 --> 00:46:05,840
Speaker 5: total holder return. So a pretty objective and universally recognized measure.

814
00:46:06,360 --> 00:46:09,399
Speaker 5: The first question actually is do yet how much does

815
00:46:09,400 --> 00:46:13,440
Speaker 5: the CEO matter? And it turns out that CEOs matter

816
00:46:13,760 --> 00:46:19,720
Speaker 5: a lot. To give you an example, if you separate,

817
00:46:19,800 --> 00:46:23,080
Speaker 5: say the top quartile of the CEOs that we studied

818
00:46:23,120 --> 00:46:27,879
Speaker 5: from the bottom quartile, there's a twenty percent difference in

819
00:46:28,360 --> 00:46:31,959
Speaker 5: shareholder returns delivered by the top versus.

820
00:46:31,640 --> 00:46:33,000
Speaker 7: The bottom CEOs.

821
00:46:33,800 --> 00:46:36,680
Speaker 5: Just to give you a sense of the auto magnitude

822
00:46:37,120 --> 00:46:41,760
Speaker 5: and how significant that is. The average CEO tenures about

823
00:46:41,800 --> 00:46:46,720
Speaker 5: six years. That difference, that twenty percentage point difference taken

824
00:46:46,760 --> 00:46:52,560
Speaker 5: over six years is actually greater than the starting full

825
00:46:52,640 --> 00:46:55,960
Speaker 5: market capitalization of the companies that we studied.

826
00:46:57,280 --> 00:47:00,840
Speaker 2: Sure, I mean they're doing right. I mean one of

827
00:47:00,840 --> 00:47:03,960
Speaker 2: the things. I mean, I mean clearly they're doing things right.

828
00:47:04,480 --> 00:47:06,560
Speaker 2: It doesn't always mean that if it goes right in

829
00:47:06,600 --> 00:47:08,560
Speaker 2: one place, it goes right in another. And we see

830
00:47:08,600 --> 00:47:10,680
Speaker 2: some CEOs do seem to manage to go from company

831
00:47:10,680 --> 00:47:13,239
Speaker 2: to company and create that kind of value. Some find

832
00:47:13,239 --> 00:47:14,360
Speaker 2: it a lot more difficult.

833
00:47:16,800 --> 00:47:21,959
Speaker 5: That's right, That's right. You know, there's in the same

834
00:47:22,000 --> 00:47:24,359
Speaker 5: study we could you know, we took a look at

835
00:47:24,840 --> 00:47:28,880
Speaker 5: practices that we could measure, and we looked at things.

836
00:47:28,920 --> 00:47:31,960
Speaker 5: We looked at things like personality type because you can

837
00:47:33,200 --> 00:47:36,720
Speaker 5: you can you can infer from the way the CEO

838
00:47:36,840 --> 00:47:41,839
Speaker 5: is right in the annual reports and the like personality

839
00:47:41,920 --> 00:47:45,239
Speaker 5: traits according to Big five personalities. We looked at how

840
00:47:45,239 --> 00:47:50,239
Speaker 5: they focused. We looked at what type of how activists

841
00:47:50,239 --> 00:47:55,160
Speaker 5: they were in terms of M and A, in terms

842
00:47:55,280 --> 00:48:01,439
Speaker 5: of transformation, in terms of changes to leadership team. We

843
00:48:01,480 --> 00:48:04,400
Speaker 5: looked at how active as they were in capital allocation.

844
00:48:05,800 --> 00:48:08,480
Speaker 5: We looked at how they approached strategies, and we looked

845
00:48:08,480 --> 00:48:12,440
Speaker 5: at how they do against various ESG metrics, and we

846
00:48:12,520 --> 00:48:17,560
Speaker 5: did find along most of those important differences between top

847
00:48:17,560 --> 00:48:21,000
Speaker 5: performing and bottom performing CEOs. The thing we did not

848
00:48:21,239 --> 00:48:25,280
Speaker 5: find a difference on is personality type. We found literally

849
00:48:25,400 --> 00:48:31,520
Speaker 5: zero correlation around personality type, which indicates that any any

850
00:48:31,560 --> 00:48:35,520
Speaker 5: personality type really can be effective as a as a leader.

851
00:48:36,320 --> 00:48:38,520
Speaker 2: That's really interesting because there's so much money put into

852
00:48:38,520 --> 00:48:42,600
Speaker 2: studying personality types. Now that actually depends on I suppose

853
00:48:42,640 --> 00:48:44,400
Speaker 2: what the person does. I mean, one of the things

854
00:48:44,920 --> 00:48:47,799
Speaker 2: I'm fascinated by is how people manage their time. I

855
00:48:47,840 --> 00:48:51,000
Speaker 2: look at some people who manage, you know, huge companies

856
00:48:51,040 --> 00:48:53,239
Speaker 2: for example, I mean, think of Sacil, or think of

857
00:48:53,480 --> 00:48:55,879
Speaker 2: Eskimo or something like that, and I just think, where

858
00:48:55,920 --> 00:48:58,560
Speaker 2: do you even start? And I realize it's about teams.

859
00:48:58,600 --> 00:49:01,600
Speaker 2: It's about having a sort of a sort of staffing models,

860
00:49:01,600 --> 00:49:04,359
Speaker 2: about having an executive team, all of those things. But

861
00:49:04,440 --> 00:49:07,800
Speaker 2: you still need to manage your time incredibly carefully. And

862
00:49:07,880 --> 00:49:09,960
Speaker 2: now some things that if you don't see a particular

863
00:49:09,960 --> 00:49:12,680
Speaker 2: person face to face, they might not tell you something

864
00:49:12,719 --> 00:49:13,520
Speaker 2: that you need to know.

865
00:49:16,200 --> 00:49:17,040
Speaker 7: Yeah, that's right.

866
00:49:17,080 --> 00:49:20,279
Speaker 5: I mean time is you know, it seems mundane, but

867
00:49:20,320 --> 00:49:25,120
Speaker 5: it's the ultimate strategic resource, and most CEOs do a

868
00:49:25,120 --> 00:49:29,040
Speaker 5: pretty poor job of it, both based on the data

869
00:49:29,120 --> 00:49:32,760
Speaker 5: but also by their own admission. Most CEOs will say

870
00:49:33,800 --> 00:49:36,120
Speaker 5: that the way they are spending their time is different

871
00:49:36,120 --> 00:49:38,320
Speaker 5: from the way that they would like to spend the time,

872
00:49:38,800 --> 00:49:44,920
Speaker 5: or they believe they should optimally spend their time. So

873
00:49:45,400 --> 00:49:50,040
Speaker 5: you know, the encouragement is to use it strategically because

874
00:49:50,040 --> 00:49:55,600
Speaker 5: in the end it reflects parities. How CEO spends their

875
00:49:55,640 --> 00:50:01,600
Speaker 5: time is a much more accurate reflection, I would say,

876
00:50:01,640 --> 00:50:07,440
Speaker 5: of company priorities than any strategy document or regulatory filing.

877
00:50:08,360 --> 00:50:10,600
Speaker 2: It's a bit like the budget of a government, isn't it, Peter.

878
00:50:10,840 --> 00:50:13,880
Speaker 2: Never mind what the politicians say where they're spending their money.

879
00:50:15,120 --> 00:50:18,200
Speaker 2: A lot of people, there's a lot of attention on

880
00:50:18,280 --> 00:50:21,560
Speaker 2: new coos, so someone takes over often. You know, maybe

881
00:50:21,560 --> 00:50:23,520
Speaker 2: at the top of a cycle, company's doing well, maybe

882
00:50:23,520 --> 00:50:25,640
Speaker 2: at the bottom of a cycle, company is doing badly.

883
00:50:26,480 --> 00:50:29,160
Speaker 2: And you suggest, and you have done a lot of

884
00:50:29,160 --> 00:50:32,120
Speaker 2: research on this at PCG, that there's some actions that

885
00:50:32,239 --> 00:50:35,799
Speaker 2: are top performing. CEO takes quite early. What are they doing?

886
00:50:35,880 --> 00:50:37,839
Speaker 2: I mean, I know a big part of it, and

887
00:50:37,880 --> 00:50:40,840
Speaker 2: I have sympathy for CEOs who have to do this.

888
00:50:40,920 --> 00:50:42,759
Speaker 2: They have to kind of stamp their authority on it.

889
00:50:42,800 --> 00:50:45,880
Speaker 2: They have to say I'm leading now. They've got to

890
00:50:45,920 --> 00:50:48,919
Speaker 2: do that in a kind of democratic but fairly firm way.

891
00:50:49,239 --> 00:50:52,880
Speaker 2: Are they particular things they do that they do early

892
00:50:52,960 --> 00:50:54,160
Speaker 2: on networks?

893
00:50:55,880 --> 00:50:56,080
Speaker 7: Yes?

894
00:50:56,160 --> 00:50:58,080
Speaker 5: So look, you know, let me start by saying, a

895
00:50:58,560 --> 00:51:03,239
Speaker 5: CEO's job is to say company direction, align the company,

896
00:51:03,360 --> 00:51:06,880
Speaker 5: and bring the organization along, and they need to figure

897
00:51:06,880 --> 00:51:10,520
Speaker 5: out what's the right pacing and sequencing of actions to take.

898
00:51:11,880 --> 00:51:13,600
Speaker 7: It does differ by starting position.

899
00:51:13,840 --> 00:51:17,680
Speaker 5: You know, if a CEO takes over a poor performing company,

900
00:51:17,719 --> 00:51:22,640
Speaker 5: for example, the successful CEOs tend to do a lot

901
00:51:22,719 --> 00:51:28,160
Speaker 5: more personnel changes early on, particularly at the leadership level.

902
00:51:28,880 --> 00:51:31,400
Speaker 5: In fact, I can tell you just from our own experience,

903
00:51:31,440 --> 00:51:37,360
Speaker 5: but this is from several hundred CEO conversations. When you

904
00:51:37,440 --> 00:51:41,480
Speaker 5: ask experience CEOs, what would you have done differently when

905
00:51:41,480 --> 00:51:45,880
Speaker 5: you're a new CEO are far the number one answer

906
00:51:45,920 --> 00:51:49,280
Speaker 5: we get is they would have taken action on people

907
00:51:49,760 --> 00:51:54,439
Speaker 5: earlier than they did. But then they do other things

908
00:51:54,480 --> 00:51:57,840
Speaker 5: as well. They act early, So they act early on

909
00:51:57,960 --> 00:52:02,920
Speaker 5: people in certain circumstances. They act early on strategy. If

910
00:52:02,960 --> 00:52:06,439
Speaker 5: they need to transform the company. They act early on transformation.

911
00:52:06,680 --> 00:52:11,520
Speaker 5: All of these things have significant correlation with success. They

912
00:52:11,600 --> 00:52:14,719
Speaker 5: act early, but at the same time they take a

913
00:52:14,840 --> 00:52:19,520
Speaker 5: longer term approach to strategy, and they also take what

914
00:52:19,600 --> 00:52:23,520
Speaker 5: you could call a more adaptive or maybe a biological

915
00:52:23,560 --> 00:52:28,319
Speaker 5: approach to strategy as opposed to something that's the terministic.

916
00:52:28,840 --> 00:52:30,400
Speaker 5: Because you know good strategy.

917
00:52:30,480 --> 00:52:31,359
Speaker 2: You know you do.

918
00:52:31,440 --> 00:52:35,320
Speaker 5: Something, there's a response, you may need to adjust your response,

919
00:52:35,880 --> 00:52:39,239
Speaker 5: and that kind of more evolutionary or biological approach to

920
00:52:39,239 --> 00:52:41,200
Speaker 5: strategy tends to be.

921
00:52:42,880 --> 00:52:45,800
Speaker 7: It tends to be more successful. It's like that.

922
00:52:45,920 --> 00:52:50,400
Speaker 5: There's a famous quote from the former heavyweight champion George Foreman,

923
00:52:50,480 --> 00:52:52,120
Speaker 5: and someone said to them, you know when you go

924
00:52:52,160 --> 00:52:55,560
Speaker 5: into fights, do you have a strategy? And he said, yeah,

925
00:52:55,600 --> 00:52:59,360
Speaker 5: I have a strategy, and at lasts until the first blows.

926
00:53:00,200 --> 00:53:01,640
Speaker 7: Yeah, the first punch is landed.

927
00:53:02,120 --> 00:53:05,160
Speaker 2: Everyone has until you until your punches in the face.

928
00:53:05,200 --> 00:53:07,560
Speaker 2: It's the sort of the way I think that's I

929
00:53:07,600 --> 00:53:09,439
Speaker 2: think the I think the original is what you said,

930
00:53:09,480 --> 00:53:12,960
Speaker 2: it's been turned over the time. I mean, someone trying

931
00:53:13,000 --> 00:53:16,520
Speaker 2: to navigate a complex organization, trying to navigate their place

932
00:53:16,520 --> 00:53:19,400
Speaker 2: and they're trying to give it direction is a particular

933
00:53:19,920 --> 00:53:22,120
Speaker 2: you know, piece of advice that stands out from you

934
00:53:22,200 --> 00:53:23,120
Speaker 2: based on your research.

935
00:53:24,960 --> 00:53:29,000
Speaker 5: You know, i'd say, at a little let which you've

936
00:53:29,000 --> 00:53:31,640
Speaker 5: asked that question, It's hard to do objective research, but

937
00:53:31,719 --> 00:53:35,440
Speaker 5: I can tell you more from personal experience of myself

938
00:53:35,520 --> 00:53:41,399
Speaker 5: and and and many colleagues that I've worked with. I

939
00:53:41,440 --> 00:53:46,640
Speaker 5: think you know you want to. You know, see, you've

940
00:53:46,640 --> 00:53:49,799
Speaker 5: got to set strategy. You've got to know how to

941
00:53:49,800 --> 00:53:53,560
Speaker 5: deal with stakeholders. And in today's world, the stakeholders are

942
00:53:53,680 --> 00:53:57,000
Speaker 5: vast and diverse. Uh, And you've got to know how

943
00:53:57,000 --> 00:54:02,560
Speaker 5: to bring your organization along and engage people and motivate people.

944
00:54:03,719 --> 00:54:06,560
Speaker 5: Perhaps the best, you know, the most important skill for

945
00:54:06,600 --> 00:54:12,760
Speaker 5: that is listening. And you know, being able to listen actively,

946
00:54:12,960 --> 00:54:15,640
Speaker 5: being able to respond to the listening, be able to

947
00:54:16,560 --> 00:54:19,359
Speaker 5: have people understand how you're listening and use that as

948
00:54:19,400 --> 00:54:25,240
Speaker 5: a tool for influence. Very very powerful and maybe less

949
00:54:25,280 --> 00:54:26,319
Speaker 5: data than it should be.

950
00:54:27,120 --> 00:54:29,880
Speaker 2: Peter Tomman, thank you so much, Senior Partner Emeritus at

951
00:54:29,880 --> 00:54:36,240
Speaker 2: the Boston Consulting Group. The Money Show, Consumer Ninja, shape Shifter,

952
00:54:37,000 --> 00:54:39,560
Speaker 2: shape Shifter, Getting ahead of yourself. Steven Wendy Knowler is

953
00:54:39,600 --> 00:54:42,400
Speaker 2: your consumer Ninja has been a shape shifter herself. But

954
00:54:42,440 --> 00:54:46,600
Speaker 2: that's a different story. Wendy Good evening talking about car

955
00:54:46,760 --> 00:54:51,000
Speaker 2: insurance tonight, and I mean, something can happen where you

956
00:54:51,040 --> 00:54:54,120
Speaker 2: have a crash, your car stolen, there's a hijacking. But

957
00:54:54,200 --> 00:54:57,440
Speaker 2: if you haven't been keeping everything one hundred percent honest

958
00:54:57,440 --> 00:55:00,160
Speaker 2: in your policy, well then you have a problem. What

959
00:55:00,600 --> 00:55:01,520
Speaker 2: case has prompted this?

960
00:55:03,200 --> 00:55:07,800
Speaker 15: Okay, big one? Actually Hi Stephen, So yeah, something actually

961
00:55:07,800 --> 00:55:11,200
Speaker 15: that you said in your infection call, if you're taking

962
00:55:11,520 --> 00:55:13,480
Speaker 15: the insurance out over the phone or you could have

963
00:55:13,520 --> 00:55:16,040
Speaker 15: sent it to a broker or whatever, that wasn't one

964
00:55:16,120 --> 00:55:19,240
Speaker 15: hundred percent correct. You didn't even realize that, you didn't

965
00:55:19,239 --> 00:55:23,000
Speaker 15: take any attention, that you didn't intentionally lead anyone, and

966
00:55:23,040 --> 00:55:24,960
Speaker 15: now you have a claim. And so a woman that

967
00:55:25,000 --> 00:55:29,280
Speaker 15: I will call NICKI. She bought a new SUV haval

968
00:55:29,440 --> 00:55:33,520
Speaker 15: Jallian in December and she ensured it immediately, as one

969
00:55:33,640 --> 00:55:36,440
Speaker 15: must when your car is financed by a bank, they

970
00:55:36,480 --> 00:55:39,759
Speaker 15: insist on it. So she currently owns the bank six

971
00:55:39,840 --> 00:55:42,200
Speaker 15: hundred and one thousand rands for this car. She finance

972
00:55:42,239 --> 00:55:46,120
Speaker 15: added to the purchase price the very next day, unknown persons.

973
00:55:46,200 --> 00:55:47,680
Speaker 15: This is a story in at sub which I'm not

974
00:55:47,719 --> 00:55:50,080
Speaker 15: going to go into petrol bomb the car in who

975
00:55:50,120 --> 00:55:50,399
Speaker 15: you are?

976
00:55:50,480 --> 00:55:50,800
Speaker 2: Wow?

977
00:55:51,080 --> 00:55:55,560
Speaker 15: It was quitten all yeah, big wow. And then came

978
00:55:55,640 --> 00:55:58,880
Speaker 15: worse news. The insurance company rejected her claim on the

979
00:55:58,920 --> 00:56:03,400
Speaker 15: grounds that she missed represented an aspect of an insurance history.

980
00:56:03,440 --> 00:56:06,240
Speaker 15: When she called them up and took out the insurance

981
00:56:06,280 --> 00:56:09,600
Speaker 15: over the phone, what did she?

982
00:56:09,680 --> 00:56:13,680
Speaker 2: I mean? Okay, So what happened? I mean why did she?

983
00:56:14,120 --> 00:56:14,160
Speaker 7: What?

984
00:56:14,360 --> 00:56:14,400
Speaker 5: What?

985
00:56:14,840 --> 00:56:15,120
Speaker 7: What?

986
00:56:15,120 --> 00:56:17,560
Speaker 2: What did they say? Was wrong? Clearly it wasn't material

987
00:56:17,640 --> 00:56:18,520
Speaker 2: to the petrol woman.

988
00:56:19,480 --> 00:56:21,719
Speaker 15: Yeah, so I know, I mean I asked her about it.

989
00:56:21,800 --> 00:56:23,960
Speaker 15: She said, I said who and what and why? And

990
00:56:24,000 --> 00:56:28,160
Speaker 15: she said, we don't know. Okay. So when they questioned

991
00:56:28,160 --> 00:56:30,560
Speaker 15: her in that so called in section call, now she's

992
00:56:30,560 --> 00:56:32,320
Speaker 15: taking us a policy. They want to know about a

993
00:56:32,400 --> 00:56:34,720
Speaker 15: new insurance history. They want to know about previous claim,

994
00:56:35,120 --> 00:56:38,480
Speaker 15: a whole lot of things. It's very important. And she

995
00:56:39,160 --> 00:56:41,560
Speaker 15: so they asked her where were insured before? And she

996
00:56:41,600 --> 00:56:43,640
Speaker 15: said no, Well I used to drive my father's car,

997
00:56:44,200 --> 00:56:46,440
Speaker 15: and it was were you the regular driver? And she

998
00:56:46,480 --> 00:56:51,480
Speaker 15: said yes. And so you must know when you make claim,

999
00:56:51,560 --> 00:56:54,479
Speaker 15: especially a major one like this one. Was the first

1000
00:56:54,520 --> 00:56:56,359
Speaker 15: thing the insure is going to do all of them

1001
00:56:56,480 --> 00:56:57,719
Speaker 15: is find a way not to pay.

1002
00:56:58,160 --> 00:56:59,000
Speaker 2: Are they going to do a.

1003
00:56:58,960 --> 00:57:02,840
Speaker 15: Deep gap into what she declared going in et cetera.

1004
00:57:03,440 --> 00:57:06,120
Speaker 15: Did you get the tracking device? They said you, they'll do,

1005
00:57:06,239 --> 00:57:08,600
Speaker 15: They'll do all of that. They all do it and

1006
00:57:08,640 --> 00:57:12,160
Speaker 15: they can't deny it. And so they found out that

1007
00:57:12,239 --> 00:57:15,360
Speaker 15: she was actually listed the additional driver on her father's

1008
00:57:15,360 --> 00:57:17,120
Speaker 15: policy and she was like, oh, yes, well I was

1009
00:57:17,120 --> 00:57:20,080
Speaker 15: originally the additional drive. Then my dad got sick and

1010
00:57:20,120 --> 00:57:22,320
Speaker 15: I actually started driving the car more than he did,

1011
00:57:22,720 --> 00:57:25,800
Speaker 15: and we didn't think to update the policy. Okay, so

1012
00:57:26,000 --> 00:57:28,080
Speaker 15: if she had a crash who saw this car, they

1013
00:57:28,080 --> 00:57:29,960
Speaker 15: wouldn't have paid that out either, because they would have said,

1014
00:57:30,000 --> 00:57:32,800
Speaker 15: you're the additional driver. And now we discover, actually, because

1015
00:57:32,800 --> 00:57:36,160
Speaker 15: we did we did some background checks that actually you're

1016
00:57:36,280 --> 00:57:38,440
Speaker 15: the regular driver. You drive this car the most that

1017
00:57:38,480 --> 00:57:42,880
Speaker 15: we were prejudiced, and your claim is denied. So yeah,

1018
00:57:43,120 --> 00:57:47,560
Speaker 15: that's where she was left this huge rejected claim.

1019
00:57:48,520 --> 00:57:51,000
Speaker 2: So I have to say there's something morally wrong here

1020
00:57:51,040 --> 00:57:54,320
Speaker 2: because this is no impact on the materiality of the

1021
00:57:54,360 --> 00:57:57,240
Speaker 2: specific claim. And I do wonder if at some point

1022
00:57:57,360 --> 00:57:59,240
Speaker 2: someone's going to try and take this to court. I

1023
00:57:59,280 --> 00:58:02,120
Speaker 2: realized insurance companies from know the law better than almost

1024
00:58:02,160 --> 00:58:07,160
Speaker 2: every so she told the truth. I mean, what I

1025
00:58:07,200 --> 00:58:10,200
Speaker 2: don't get from these stories sometimes is she could just

1026
00:58:10,240 --> 00:58:12,800
Speaker 2: have said, she could just have lied, And how would

1027
00:58:12,800 --> 00:58:13,400
Speaker 2: they ever know.

1028
00:58:15,040 --> 00:58:16,080
Speaker 15: If she'd said.

1029
00:58:17,680 --> 00:58:17,760
Speaker 7: No.

1030
00:58:17,840 --> 00:58:21,480
Speaker 15: Well, the thing is that they're accusing your representation. Let

1031
00:58:21,480 --> 00:58:23,440
Speaker 15: me read you the part from the letter quickly. The

1032
00:58:24,120 --> 00:58:27,880
Speaker 15: rejection insist. During the underwriting of the policy, you were

1033
00:58:27,880 --> 00:58:30,680
Speaker 15: specifically requested to provide us with correct details of the

1034
00:58:30,720 --> 00:58:35,480
Speaker 15: regular driver of the car's pre insurance history. During the

1035
00:58:35,520 --> 00:58:37,880
Speaker 15: processing of the claim, it was established that the information

1036
00:58:38,000 --> 00:58:40,720
Speaker 15: you gave us was not correct. This information is relevant

1037
00:58:40,760 --> 00:58:43,400
Speaker 15: to both the evaluation and the acceptance of the risk.

1038
00:58:43,720 --> 00:58:46,120
Speaker 15: Had we been aware of the correct information, we would

1039
00:58:46,120 --> 00:58:49,320
Speaker 15: not have agreed to ensure the risks, or would have

1040
00:58:49,360 --> 00:58:52,800
Speaker 15: done so on materially different terms. In other words, this

1041
00:58:53,280 --> 00:58:59,080
Speaker 15: whole thing at a twenty five percent impact on the

1042
00:58:59,120 --> 00:59:03,840
Speaker 15: perceivers and your premium, apparently, and they can do it.

1043
00:59:03,960 --> 00:59:06,840
Speaker 15: I've seen many of these cases go to the onm

1044
00:59:06,880 --> 00:59:10,640
Speaker 15: birds and they started in the case of the insurer absence.

1045
00:59:12,400 --> 00:59:15,280
Speaker 15: They have sent me that transcription because us, okay, maybe

1046
00:59:15,320 --> 00:59:17,600
Speaker 15: it's language. I'll take up a lot of these cases

1047
00:59:17,680 --> 00:59:20,240
Speaker 15: like okay, so maybe she thought, do you drive the

1048
00:59:20,280 --> 00:59:23,600
Speaker 15: car regularly as opposed to regular driver means you drive,

1049
00:59:23,800 --> 00:59:26,400
Speaker 15: meaning you drive the car more than anyone else. And

1050
00:59:26,440 --> 00:59:28,960
Speaker 15: the transcript doesn't show that. So I can't see a

1051
00:59:28,960 --> 00:59:30,920
Speaker 15: way that I can help her. I will do my best,

1052
00:59:31,000 --> 00:59:33,040
Speaker 15: but I just want to put this warning. Archer one

1053
00:59:33,040 --> 00:59:36,480
Speaker 15: of these that do it, do it right now. Kind

1054
00:59:36,520 --> 00:59:40,480
Speaker 15: of think Stevens to say, you have said that you

1055
00:59:41,760 --> 00:59:44,480
Speaker 15: are the regular driver, but now your son, who's twenty seven,

1056
00:59:44,640 --> 00:59:47,680
Speaker 15: is the regular driver. Totally different risks, totally different premium.

1057
00:59:47,800 --> 00:59:50,160
Speaker 15: They will reject the claim if he has a question

1058
00:59:50,360 --> 00:59:52,720
Speaker 15: in the car, or if the car gets stolen or whatever.

1059
00:59:52,840 --> 00:59:56,720
Speaker 15: There's any mister temptation, So find out what's the new

1060
00:59:56,800 --> 00:59:59,440
Speaker 15: policy and get the call. According I would say, I

1061
00:59:59,480 --> 01:00:01,840
Speaker 15: ran this part and said, can we do this see

1062
01:00:01,880 --> 01:00:05,960
Speaker 15: if there was any unintentional or intentional mispresentation. If you

1063
01:00:06,040 --> 01:00:08,920
Speaker 15: can't get that information, I would cancel your policy and

1064
01:00:09,000 --> 01:00:13,040
Speaker 15: start again with another company. You won't be pretty of

1065
01:00:13,120 --> 01:00:15,760
Speaker 15: this because you can old you didn't get uploaded and

1066
01:00:15,840 --> 01:00:18,360
Speaker 15: give all the correct information and find out have you

1067
01:00:18,440 --> 01:00:20,840
Speaker 15: got the right checking. We've thinked about this, but another

1068
01:00:20,920 --> 01:00:23,760
Speaker 15: case of a person with a fortuna that was hijacked

1069
01:00:23,800 --> 01:00:26,520
Speaker 15: or stolen. She didn't put the second tracker in because

1070
01:00:26,560 --> 01:00:29,120
Speaker 15: the broker just sent her the letter and she didn't

1071
01:00:29,160 --> 01:00:34,480
Speaker 15: read the detail. I mean, Stuven, it is horrific. Many

1072
01:00:34,480 --> 01:00:38,160
Speaker 15: people listening now are paying their premium. This woman's key

1073
01:00:38,680 --> 01:00:42,440
Speaker 15: premium was one a month, right, paying the premium thinking

1074
01:00:42,440 --> 01:00:45,960
Speaker 15: you've got peace of mind? You don't, you don't, You're

1075
01:00:45,960 --> 01:00:48,960
Speaker 15: paying for nothing. So I'm really so strongly about this.

1076
01:00:49,160 --> 01:00:52,439
Speaker 15: Please everyone, if you've got conscurance, just check that there

1077
01:00:52,520 --> 01:00:55,000
Speaker 15: isn't something that you declared that's sitting there where you

1078
01:00:55,080 --> 01:00:57,640
Speaker 15: didn't declare. That's going to mean when youre the big claim,

1079
01:00:57,680 --> 01:01:02,920
Speaker 15: they're going to say, oh so you're.

1080
01:01:01,160 --> 01:01:04,320
Speaker 2: Not getting there's something. So I don't know. At some

1081
01:01:04,400 --> 01:01:06,479
Speaker 2: point someone has to take this up in some way.

1082
01:01:06,640 --> 01:01:08,840
Speaker 2: I think what also maybe needs to happen. Wendy knows

1083
01:01:08,840 --> 01:01:10,880
Speaker 2: you're consume a ninja. Wendy, thank you, because we need

1084
01:01:10,920 --> 01:01:13,440
Speaker 2: to name and shame the companies that do this, say

1085
01:01:13,440 --> 01:01:16,640
Speaker 2: this is what happened. I can see the social media campaign,

1086
01:01:16,680 --> 01:01:20,440
Speaker 2: you know how the insurance companies always have an example

1087
01:01:20,560 --> 01:01:24,240
Speaker 2: a person, Oh well, I was you do it the

1088
01:01:24,280 --> 01:01:26,200
Speaker 2: other way. I can just see the fund someone could

1089
01:01:26,240 --> 01:01:28,360
Speaker 2: have on social media with that, Wendy know that you

1090
01:01:28,440 --> 01:01:30,320
Speaker 2: consumer a ninja. Thank you, and you know Wendy's advice

1091
01:01:30,360 --> 01:01:33,200
Speaker 2: as boils down to the same thing. Read their fine

1092
01:01:33,280 --> 01:01:37,680
Speaker 2: brands down to earth Stephen at seven thirteen.

1093
01:01:38,280 --> 01:01:40,640
Speaker 7: The Money Show, shape shifter.

1094
01:01:40,360 --> 01:01:44,240
Speaker 2: Is twenty four minutes now to eighth the time. Well,

1095
01:01:44,280 --> 01:01:47,240
Speaker 2: your shape shift tonight is someone who's been a genuine

1096
01:01:47,320 --> 01:01:49,760
Speaker 2: leader in their field for a very very long time,

1097
01:01:50,160 --> 01:01:52,360
Speaker 2: able to start their own thing, create a name for

1098
01:01:52,400 --> 01:01:56,040
Speaker 2: themselves in a very crowded field. He's also someone we

1099
01:01:56,120 --> 01:01:58,520
Speaker 2: turned to to get a deeper understanding of what's happening

1100
01:01:58,560 --> 01:02:01,280
Speaker 2: in global markets really as someone who set the pace

1101
01:02:01,320 --> 01:02:03,680
Speaker 2: on this for many many years. And I'm talking of

1102
01:02:03,720 --> 01:02:06,640
Speaker 2: course about Peter Armitage, the CEO of Anchor Capital. Peter,

1103
01:02:06,720 --> 01:02:08,880
Speaker 2: good evening, thank you very much indeed for joining us

1104
01:02:08,880 --> 01:02:12,560
Speaker 2: already to appreciate it. You've been around a long time

1105
01:02:12,680 --> 01:02:15,439
Speaker 2: and in a way you're you're kind of an established name.

1106
01:02:16,200 --> 01:02:18,600
Speaker 2: But I was I spent some time on Google looking

1107
01:02:18,760 --> 01:02:22,000
Speaker 2: looking looking around at your history today and I came

1108
01:02:22,040 --> 01:02:24,680
Speaker 2: across two facts that I've never seen together in one

1109
01:02:24,720 --> 01:02:28,720
Speaker 2: bio before. The one article said that you'd begun life

1110
01:02:28,800 --> 01:02:30,840
Speaker 2: or spent some time as a chart in a caravan

1111
01:02:30,960 --> 01:02:35,120
Speaker 2: park and your LinkedIn profile talks about Michael House. I

1112
01:02:35,120 --> 01:02:37,280
Speaker 2: don't think i've seen those things together before.

1113
01:02:39,440 --> 01:02:42,840
Speaker 7: Yeah, now I was my dad owned the caravan box.

1114
01:02:42,880 --> 01:02:46,040
Speaker 7: That's not quite as extreme as as the story signs

1115
01:02:46,040 --> 01:02:48,640
Speaker 7: makes for a good headline. But yeah, I did grow

1116
01:02:48,760 --> 01:02:51,480
Speaker 7: up in a a in a very modest family and

1117
01:02:51,520 --> 01:02:54,000
Speaker 7: then got a birchtreet to michaelas I certainly wouldn't have

1118
01:02:54,040 --> 01:02:59,800
Speaker 7: gone from from my dad's kind of cellary and remuneration.

1119
01:03:00,680 --> 01:03:04,080
Speaker 7: So very privileged to go in of a great education.

1120
01:03:05,480 --> 01:03:08,440
Speaker 2: And I mean was it maths in a way? Skill

1121
01:03:08,440 --> 01:03:10,800
Speaker 2: it maths perhaps, or skill it something to do with

1122
01:03:10,800 --> 01:03:13,200
Speaker 2: the world that helped you, helped you there and maybe

1123
01:03:13,200 --> 01:03:14,120
Speaker 2: set you on this path.

1124
01:03:16,160 --> 01:03:20,280
Speaker 7: Yes, I mean a bit of a combination. Actually did

1125
01:03:20,360 --> 01:03:24,280
Speaker 7: quite nasty at English as well, and that combination as

1126
01:03:24,320 --> 01:03:26,240
Speaker 7: a stock market analyst, if you can write up a

1127
01:03:26,240 --> 01:03:29,000
Speaker 7: good story, that counts for a lot. So I think,

1128
01:03:29,120 --> 01:03:32,800
Speaker 7: like anything in love, the ability to communicate is key

1129
01:03:32,800 --> 01:03:34,040
Speaker 7: in any job.

1130
01:03:35,400 --> 01:03:37,640
Speaker 2: I mean, it's interesting that because so many people are

1131
01:03:37,680 --> 01:03:40,680
Speaker 2: able to understand and interpret numbers in a way, but

1132
01:03:40,800 --> 01:03:43,240
Speaker 2: to really explain it, I think that must be the

1133
01:03:43,880 --> 01:03:47,000
Speaker 2: real gift. Was there a moment when you realize that

1134
01:03:47,040 --> 01:03:49,000
Speaker 2: this is the direction you wanted to go in, because

1135
01:03:49,160 --> 01:03:52,280
Speaker 2: I mean, you are a CEA, and most many CAAs

1136
01:03:52,280 --> 01:03:55,760
Speaker 2: have come across, or many people with that qualification kind

1137
01:03:55,800 --> 01:03:59,160
Speaker 2: of know easily halfway through high school what route they

1138
01:03:59,200 --> 01:04:00,600
Speaker 2: want to take. Was it like that for you?

1139
01:04:02,240 --> 01:04:04,560
Speaker 7: Yeah, I think. Funnily enough, I paid my way through

1140
01:04:04,640 --> 01:04:07,400
Speaker 7: university working for the newspaper and reported. I was then

1141
01:04:07,400 --> 01:04:10,920
Speaker 7: a toll rugby reporter for you, which was fantastic experience

1142
01:04:10,920 --> 01:04:12,400
Speaker 7: because you had to watch a game and tell a

1143
01:04:12,440 --> 01:04:15,200
Speaker 7: story immediately after the end of the game. Back in

1144
01:04:15,200 --> 01:04:17,000
Speaker 7: those days, you had to read it through kind of

1145
01:04:17,040 --> 01:04:21,520
Speaker 7: on the phone afterwards. So when I came across I

1146
01:04:21,640 --> 01:04:24,080
Speaker 7: grew up in Durban, and you know, they're the stock

1147
01:04:24,120 --> 01:04:25,840
Speaker 7: market's not really a big thing. But when I came

1148
01:04:25,920 --> 01:04:30,080
Speaker 7: up to Johannesburg and discovered the stock markets and the

1149
01:04:30,160 --> 01:04:33,320
Speaker 7: job of an analyst that, you know, the combination of

1150
01:04:33,480 --> 01:04:37,360
Speaker 7: analyzing companies, which was fascinating, together with the ability to

1151
01:04:37,400 --> 01:04:41,040
Speaker 7: communicate them kind of really appealed to me. And in

1152
01:04:41,080 --> 01:04:43,600
Speaker 7: a way, you know, the stock market is full of

1153
01:04:43,640 --> 01:04:46,360
Speaker 7: stories and telling stories, but obviously those have got to

1154
01:04:46,360 --> 01:04:48,360
Speaker 7: be backed up by the numbers and the foundation and

1155
01:04:48,400 --> 01:04:49,640
Speaker 7: the numbers are part of the story.

1156
01:04:50,640 --> 01:04:52,400
Speaker 2: Yeah, I mean I find I find the Money Show

1157
01:04:52,440 --> 01:04:55,120
Speaker 2: is actually just full of stories with a few numbers

1158
01:04:55,160 --> 01:04:58,959
Speaker 2: more than you would expect in other stories. You worked

1159
01:04:58,960 --> 01:05:00,960
Speaker 2: at Deutsche Bank, you were to a few other places,

1160
01:05:01,000 --> 01:05:03,080
Speaker 2: and then you worked at Investik, and then you decided

1161
01:05:03,120 --> 01:05:07,640
Speaker 2: to leave Investik and start Anchor Capital. And what was

1162
01:05:07,960 --> 01:05:10,040
Speaker 2: driving you to do that? I mean, you'd worked very

1163
01:05:10,040 --> 01:05:12,680
Speaker 2: hard to get where you were, You'd worked your way

1164
01:05:12,680 --> 01:05:15,680
Speaker 2: through university. Were you tired of being an employee? Was

1165
01:05:15,720 --> 01:05:16,439
Speaker 2: there something else?

1166
01:05:17,960 --> 01:05:20,280
Speaker 7: Yeah? I think that that's probably the biggest part of it.

1167
01:05:20,360 --> 01:05:23,360
Speaker 7: I think my kind of tenure future at the age

1168
01:05:23,360 --> 01:05:27,200
Speaker 7: of forty got shown to me, and you know, you

1169
01:05:27,280 --> 01:05:29,720
Speaker 7: kind of sit back and go, well, you know, maybe

1170
01:05:29,720 --> 01:05:31,880
Speaker 7: I want a little bit more than that. So I've

1171
01:05:31,880 --> 01:05:34,960
Speaker 7: always been kind of a risk taker and was happy

1172
01:05:35,000 --> 01:05:38,080
Speaker 7: to back myself. And it's all about getting some good

1173
01:05:38,080 --> 01:05:40,800
Speaker 7: people to go along with you. So, you know, managed

1174
01:05:40,800 --> 01:05:43,040
Speaker 7: to get a few other good guys to come with

1175
01:05:43,040 --> 01:05:46,760
Speaker 7: me and get started. We didn't have a spectacular plan,

1176
01:05:46,920 --> 01:05:49,760
Speaker 7: but just to believe that people would believe in us.

1177
01:05:49,800 --> 01:05:52,320
Speaker 2: I guess well, I was going to ask you about

1178
01:05:52,320 --> 01:05:54,760
Speaker 2: the people that you would have had to find to

1179
01:05:54,800 --> 01:05:56,520
Speaker 2: go with you, because it would have been impossible on

1180
01:05:56,560 --> 01:05:57,400
Speaker 2: your own. I'm sure.

1181
01:05:59,560 --> 01:06:02,600
Speaker 7: Yeah. I brought a guy called Matthew Norwood Young started

1182
01:06:02,720 --> 01:06:06,240
Speaker 7: off with me. He was the best salesperson Investick at

1183
01:06:06,280 --> 01:06:10,960
Speaker 7: the time. And then gradually we brought across, you know,

1184
01:06:11,000 --> 01:06:14,640
Speaker 7: we built up something that was aspirational and people wanted

1185
01:06:14,680 --> 01:06:17,680
Speaker 7: to join. So it was really it was over the

1186
01:06:17,680 --> 01:06:21,680
Speaker 7: course of the next year or two that we approached

1187
01:06:21,680 --> 01:06:25,000
Speaker 7: and approached some really good people who had some good clients,

1188
01:06:25,000 --> 01:06:27,320
Speaker 7: and they came along and brought their clients with them.

1189
01:06:27,520 --> 01:06:30,600
Speaker 7: You know, it's quite attractive in the early days of

1190
01:06:30,640 --> 01:06:33,680
Speaker 7: a business like us to get involved, you know, because

1191
01:06:33,680 --> 01:06:36,520
Speaker 7: you can get a stack in the business and it's

1192
01:06:36,680 --> 01:06:38,720
Speaker 7: you know, there's just a huge amount of excitement and

1193
01:06:38,760 --> 01:06:40,800
Speaker 7: if you can get it working well, it's you can

1194
01:06:40,840 --> 01:06:42,840
Speaker 7: create value in a fairly short time period.

1195
01:06:43,920 --> 01:06:46,920
Speaker 2: There's a way of creating momentum, which is easier when

1196
01:06:46,960 --> 01:06:50,200
Speaker 2: you start out, much harder to change in organization's momentum

1197
01:06:50,240 --> 01:06:53,040
Speaker 2: later when it's bigger. But that must have been quite exciting.

1198
01:06:53,120 --> 01:06:55,320
Speaker 2: I mean, I've never been part of starting a business.

1199
01:06:55,320 --> 01:06:58,240
Speaker 2: I've been a part of starting other things. But never

1200
01:06:58,280 --> 01:07:00,840
Speaker 2: sort of a business like this. I always feel it

1201
01:07:01,120 --> 01:07:03,280
Speaker 2: from the outside, it looks tremendously exciting.

1202
01:07:05,440 --> 01:07:08,040
Speaker 7: Yeah, it's exciting and scary. You know, you've got to

1203
01:07:09,240 --> 01:07:11,640
Speaker 7: the clock is ticking in terms of the funding that

1204
01:07:11,680 --> 01:07:15,560
Speaker 7: you've got. You know, I brought across some highly paid

1205
01:07:15,600 --> 01:07:18,400
Speaker 7: people from places and I took on the responsibility of,

1206
01:07:18,880 --> 01:07:21,480
Speaker 7: you know, ultimately the business working in order for them

1207
01:07:21,560 --> 01:07:23,720
Speaker 7: to for it to have been worthwhile and for them

1208
01:07:23,760 --> 01:07:26,480
Speaker 7: to pay the bills. But it's you know, it's scary.

1209
01:07:26,480 --> 01:07:28,120
Speaker 7: I still remember at the end of the first year,

1210
01:07:28,160 --> 01:07:30,600
Speaker 7: we were incredibly happy We've got to a billion round

1211
01:07:30,640 --> 01:07:34,160
Speaker 7: of assets. And one of the early guys, Daryl Hannington,

1212
01:07:34,600 --> 01:07:37,000
Speaker 7: who's still with us today and head of portfolio management,

1213
01:07:37,040 --> 01:07:38,959
Speaker 7: I remember driving out the gate to them and you said,

1214
01:07:39,320 --> 01:07:42,560
Speaker 7: that's amazing, but where will the next round come from?

1215
01:07:42,800 --> 01:07:45,600
Speaker 7: And you've just you know, you've got to work. It's

1216
01:07:46,440 --> 01:07:48,600
Speaker 7: I was working eighteen hours a day in those days

1217
01:07:48,640 --> 01:07:51,760
Speaker 7: performing the job of you know, running the business, managing

1218
01:07:51,760 --> 01:07:54,880
Speaker 7: the assets, writing up our morning newsletter in the evening.

1219
01:07:55,720 --> 01:07:57,960
Speaker 7: So you you know, it takes quite a long time

1220
01:07:58,000 --> 01:08:00,000
Speaker 7: to get to critical mass so you can afford all

1221
01:08:00,000 --> 01:08:01,800
Speaker 7: all of the important parts of a business.

1222
01:08:02,720 --> 01:08:05,880
Speaker 2: Yeah, I mean, and there's so many things that come up.

1223
01:08:05,920 --> 01:08:08,320
Speaker 2: I mean, I'm sure there's eighteen hours a day. There

1224
01:08:08,360 --> 01:08:10,680
Speaker 2: wasn't a chance for you to sort of take things easy.

1225
01:08:11,080 --> 01:08:13,240
Speaker 2: There were so many different things to do because in

1226
01:08:13,240 --> 01:08:15,760
Speaker 2: a way you were you were sort of leading this.

1227
01:08:15,880 --> 01:08:18,040
Speaker 2: I mean with other people too, I mean, and they

1228
01:08:18,040 --> 01:08:18,600
Speaker 2: look up to you.

1229
01:08:21,040 --> 01:08:25,879
Speaker 7: Yes, absolutely, so the responsibilities on your shoulders. I remember

1230
01:08:25,920 --> 01:08:29,720
Speaker 7: every Sunday was my High Street equity day. I'd sit

1231
01:08:29,880 --> 01:08:33,479
Speaker 7: and go through a million reports and come up with

1232
01:08:33,520 --> 01:08:36,839
Speaker 7: our global share portfolio. You know, today I've got twelve

1233
01:08:36,880 --> 01:08:40,160
Speaker 7: people around the globe in putting into that process and

1234
01:08:40,240 --> 01:08:42,760
Speaker 7: choosing the shares, and I always joke with them, and

1235
01:08:42,800 --> 01:08:44,599
Speaker 7: so that it was, you know, the performance is much

1236
01:08:44,600 --> 01:08:46,839
Speaker 7: better when it was me doing it in a Sunday afternoon.

1237
01:08:47,439 --> 01:08:49,000
Speaker 7: Do you really have to do You have to do

1238
01:08:49,160 --> 01:08:50,280
Speaker 7: multiple tasks.

1239
01:08:51,000 --> 01:08:55,519
Speaker 2: Yeah. Your career in markets and not just talking about

1240
01:08:55,520 --> 01:08:58,920
Speaker 2: anchor capital but generally now started. I think nineteen ninety

1241
01:08:58,920 --> 01:09:01,920
Speaker 2: four was the year that I and at that point

1242
01:09:02,040 --> 01:09:04,080
Speaker 2: the world was in a particular place, so the Cold

1243
01:09:04,120 --> 01:09:08,960
Speaker 2: War had ended, we saw the beginnings of what I

1244
01:09:09,000 --> 01:09:14,400
Speaker 2: suppose we will call it a boom and communications and technology.

1245
01:09:14,600 --> 01:09:17,760
Speaker 2: China was taking off in quite a big way. The

1246
01:09:17,800 --> 01:09:23,080
Speaker 2: Internet was beginning. Looking back at that, now, what was

1247
01:09:23,120 --> 01:09:27,919
Speaker 2: that era like to begin an investment career in, Because now,

1248
01:09:28,000 --> 01:09:30,400
Speaker 2: and I say this kind of during a Trump era,

1249
01:09:30,680 --> 01:09:33,920
Speaker 2: it looks quite a benign or an easy time to

1250
01:09:33,960 --> 01:09:36,240
Speaker 2: start investing. That doesn't mean it felt like that at

1251
01:09:36,280 --> 01:09:36,639
Speaker 2: the time.

1252
01:09:38,640 --> 01:09:40,439
Speaker 7: Yeah, I think if you look back to those days,

1253
01:09:40,439 --> 01:09:44,400
Speaker 7: it was dramatically different in terms of newsflow technology, and

1254
01:09:44,520 --> 01:09:47,479
Speaker 7: you know, I still remember writing analyst reports, putting the

1255
01:09:47,560 --> 01:09:50,280
Speaker 7: report in an envelope, putting a stamp on the envelope

1256
01:09:50,280 --> 01:09:53,519
Speaker 7: and posting it to old mutual and you know, phoning

1257
01:09:53,520 --> 01:09:55,400
Speaker 7: them to tell them with excitement that in the next

1258
01:09:55,439 --> 01:09:58,800
Speaker 7: few days that get an analyst report. You know, today

1259
01:09:58,920 --> 01:10:02,719
Speaker 7: analyst writes something and it's broadcasting across Bloomberg's within a minute,

1260
01:10:03,040 --> 01:10:06,760
Speaker 7: and shares are reacting to people's decisions. You know. We

1261
01:10:06,840 --> 01:10:10,920
Speaker 7: also we used to go and have visits. The trade

1262
01:10:10,920 --> 01:10:13,800
Speaker 7: on the market was about probably two or three hundred

1263
01:10:13,880 --> 01:10:16,840
Speaker 7: million around a day. That fixed commissions of one and

1264
01:10:16,840 --> 01:10:20,160
Speaker 7: a half percent. You know, today it's twenty thirty times

1265
01:10:20,200 --> 01:10:24,080
Speaker 7: that at commissions of five or ten basis points. You know,

1266
01:10:24,160 --> 01:10:30,160
Speaker 7: so the industry has changed absolutely dramatically, and it's It

1267
01:10:30,200 --> 01:10:33,920
Speaker 7: was a much much more fundamental then and much lower newsflow.

1268
01:10:34,360 --> 01:10:36,919
Speaker 7: So if you got you know you and visited a company,

1269
01:10:37,680 --> 01:10:40,759
Speaker 7: they would give you what today would be considered inside information.

1270
01:10:40,880 --> 01:10:44,639
Speaker 7: It certainly wasn't. Then you had some proprietary knowledge about

1271
01:10:44,640 --> 01:10:49,880
Speaker 7: a business, and you know, you'd communicate that with your

1272
01:10:50,240 --> 01:10:55,440
Speaker 7: institutional clients. People held shares for much longer time periods.

1273
01:10:55,680 --> 01:10:58,960
Speaker 7: It was a huge decision to buy and sell a share. Today,

1274
01:10:59,120 --> 01:11:05,040
Speaker 7: markets and fund trade, you know, the portfolio change turnover

1275
01:11:05,200 --> 01:11:09,000
Speaker 7: is huge. You know, guars are trading massive volumes every day.

1276
01:11:09,800 --> 01:11:12,360
Speaker 7: So that the whole market was was very, very different,

1277
01:11:13,080 --> 01:11:15,599
Speaker 7: but exciting times and probably a bit easier to get

1278
01:11:15,640 --> 01:11:20,400
Speaker 7: a less frenetic You spend a lot more time researching

1279
01:11:20,760 --> 01:11:24,200
Speaker 7: and coming up with considered opinions. Today the market is

1280
01:11:24,280 --> 01:11:28,599
Speaker 7: much more about you know, instant news, the market moving farther,

1281
01:11:29,160 --> 01:11:31,120
Speaker 7: and you know in the US, at the moment, a

1282
01:11:31,160 --> 01:11:35,120
Speaker 7: good or bad results outcome can move a share pruce

1283
01:11:35,280 --> 01:11:39,679
Speaker 7: ten or twenty percent. Back then, one or two percent

1284
01:11:39,760 --> 01:11:42,080
Speaker 7: move was was huge. You know, it was kind of

1285
01:11:42,120 --> 01:11:44,840
Speaker 7: controlled by some guys on the floor putting their hand

1286
01:11:44,960 --> 01:11:47,160
Speaker 7: up to buy and sell a share. It's hard to

1287
01:11:47,160 --> 01:11:49,320
Speaker 7: picture that that's actually happened in my lifetime.

1288
01:11:50,880 --> 01:11:53,920
Speaker 2: I do wonder about the quality of the decisions because

1289
01:11:54,200 --> 01:11:57,320
Speaker 2: I mean, and I say this as a complete amateur,

1290
01:11:57,360 --> 01:11:59,599
Speaker 2: and you're the professional in this conversation. But it seems

1291
01:11:59,640 --> 01:12:02,880
Speaker 2: to me that when when a share moves ten percent

1292
01:12:02,960 --> 01:12:04,640
Speaker 2: and then it can, you know, in two days, be

1293
01:12:04,680 --> 01:12:06,840
Speaker 2: back where it started. Not always as the story of

1294
01:12:06,880 --> 01:12:10,720
Speaker 2: Spa would tell you today, but what it means is

1295
01:12:10,760 --> 01:12:13,080
Speaker 2: that people are kind of maybe a bit more heard

1296
01:12:13,560 --> 01:12:18,320
Speaker 2: in their mentality, instinctive in their response, and not always

1297
01:12:18,360 --> 01:12:21,400
Speaker 2: thinking things through. I mean, is there may be a

1298
01:12:21,439 --> 01:12:23,439
Speaker 2: reason why the stage of omaha is called the stage

1299
01:12:23,439 --> 01:12:26,439
Speaker 2: of omaha because he's still taking a long time to

1300
01:12:26,479 --> 01:12:29,200
Speaker 2: make decisions. Perhaps, Yeah.

1301
01:12:29,280 --> 01:12:32,440
Speaker 7: I think another elements even to add to that is technology.

1302
01:12:33,160 --> 01:12:36,160
Speaker 7: So there's a lot of computer programs out there that

1303
01:12:36,360 --> 01:12:39,479
Speaker 7: get triggered when certain things happen. So you know, if

1304
01:12:39,520 --> 01:12:43,800
Speaker 7: a share moves certain amounts in one direction, it might

1305
01:12:43,880 --> 01:12:47,799
Speaker 7: trigger a computer algorithm might force something to sell stop.

1306
01:12:47,840 --> 01:12:50,639
Speaker 7: Losses come in place where the share goes down five

1307
01:12:50,720 --> 01:12:53,160
Speaker 7: or ten percent, there's immediately forced sellers, so it can

1308
01:12:53,200 --> 01:12:55,800
Speaker 7: go down a little bit more so if you. If

1309
01:12:55,840 --> 01:12:57,720
Speaker 7: you take us, you know, you've got to believe, and

1310
01:12:57,760 --> 01:12:59,760
Speaker 7: we certainly do. If you take a step back and

1311
01:12:59,800 --> 01:13:04,360
Speaker 7: take longer term views, and if you have an intrinsic

1312
01:13:04,439 --> 01:13:06,680
Speaker 7: view on a company and you're positive on it and

1313
01:13:06,720 --> 01:13:09,760
Speaker 7: they have these ten or twenty percent dips, those are

1314
01:13:09,800 --> 01:13:13,639
Speaker 7: often very, very attractive buying opportunities. So I think if

1315
01:13:13,640 --> 01:13:17,040
Speaker 7: you keep a level head, you know, we certainly don't

1316
01:13:17,080 --> 01:13:19,920
Speaker 7: try and trade our portfolios every day, but you can

1317
01:13:19,960 --> 01:13:26,360
Speaker 7: have massive moves in shares. You know, for a company

1318
01:13:26,439 --> 01:13:28,760
Speaker 7: can instead of doing two dollars a share can do

1319
01:13:28,840 --> 01:13:32,479
Speaker 7: one dollar ninety nine. And there's some uncertainty about an

1320
01:13:32,520 --> 01:13:35,200
Speaker 7: element of results and a big dip in a share press.

1321
01:13:35,760 --> 01:13:38,599
Speaker 7: So if you're patient, you know what you want to buy,

1322
01:13:38,680 --> 01:13:41,400
Speaker 7: you know what shares you Backing the market I think

1323
01:13:41,439 --> 01:13:43,560
Speaker 7: gives you more opportunities than it did back in the

1324
01:13:43,640 --> 01:13:45,080
Speaker 7: day when it was trading on the floor.

1325
01:13:47,760 --> 01:13:49,719
Speaker 2: I worry if it also comes with a lot more risks.

1326
01:13:49,760 --> 01:13:53,120
Speaker 2: You can lose so much money so quickly excuse me. Now,

1327
01:13:53,160 --> 01:13:57,600
Speaker 2: Sometimes I mean, I say this is a strict amateur,

1328
01:13:58,400 --> 01:14:00,640
Speaker 2: but it sometimes just seems all out of control to

1329
01:14:00,680 --> 01:14:02,439
Speaker 2: me that one day something's going to happen, and we

1330
01:14:02,439 --> 01:14:04,600
Speaker 2: won't be able to stop it because you know, the

1331
01:14:04,680 --> 01:14:07,559
Speaker 2: algorithms have literally taken over and they've been written by

1332
01:14:07,560 --> 01:14:11,360
Speaker 2: an AI chat an AI bought an AI agent anyway.

1333
01:14:13,040 --> 01:14:16,639
Speaker 7: Yeah, well that's the cod We did a webinar yesterday

1334
01:14:16,720 --> 01:14:19,360
Speaker 7: talking about AI because it's over the course of the

1335
01:14:19,400 --> 01:14:22,240
Speaker 7: last two weeks it's been kind of crazy. The market's

1336
01:14:22,240 --> 01:14:24,920
Speaker 7: always been almost been like a pack of wild dogs

1337
01:14:24,920 --> 01:14:28,519
Speaker 7: picking on a particular sector, saying questioning the business model

1338
01:14:28,600 --> 01:14:32,080
Speaker 7: of software, and then asset managers, and then logistics companies,

1339
01:14:32,400 --> 01:14:36,840
Speaker 7: and in an undiscriminating fashion, shares coming off you know, five, ten,

1340
01:14:36,960 --> 01:14:40,479
Speaker 7: fifteen percent. So you know, you've got to keep a

1341
01:14:40,520 --> 01:14:43,439
Speaker 7: focus on the companies you believe in, and you've got

1342
01:14:43,479 --> 01:14:46,200
Speaker 7: to be realistic. I think the world is changing. I

1343
01:14:46,240 --> 01:14:48,280
Speaker 7: think the market at the moment is being you know,

1344
01:14:48,600 --> 01:14:51,080
Speaker 7: way way too reacting, way too quickly, and there's a

1345
01:14:51,080 --> 01:14:53,519
Speaker 7: lot of fear out there as to what this all means.

1346
01:14:53,840 --> 01:14:56,080
Speaker 7: Because what is for certainty is that we're going through

1347
01:14:56,080 --> 01:15:00,000
Speaker 7: a fundamental change in the capability of computers and machines

1348
01:15:00,240 --> 01:15:02,480
Speaker 7: and how that flows through into all of our businesses.

1349
01:15:02,960 --> 01:15:07,320
Speaker 7: I think people people change their minds about whether companies

1350
01:15:07,400 --> 01:15:11,600
Speaker 7: or beneficiaries or victims of this massive ability of computers

1351
01:15:11,640 --> 01:15:14,479
Speaker 7: to automate was everything that human beings do.

1352
01:15:16,320 --> 01:15:18,479
Speaker 2: Yeah, I mean it's the it's the age old question.

1353
01:15:18,520 --> 01:15:19,880
Speaker 2: I don't know how this is going to end, and

1354
01:15:20,000 --> 01:15:23,280
Speaker 2: isn't that what makes investing so interesting. We're speaking to

1355
01:15:23,280 --> 01:15:26,400
Speaker 2: Peter Armitage tonight. He's your shape shift to the CEO

1356
01:15:26,439 --> 01:15:29,000
Speaker 2: of Anchor Capital. Back with him in a moment nine

1357
01:15:29,040 --> 01:15:29,800
Speaker 2: minutes now to eight.

1358
01:15:31,880 --> 01:15:34,360
Speaker 13: The Money Show Stephen Kruetiz is brought to you by

1359
01:15:34,400 --> 01:15:38,080
Speaker 13: Absolute Corporate and Investment Banking, proud sponsor of the LMA

1360
01:15:38,520 --> 01:15:42,559
Speaker 13: ICMA Loan End Capital Markets Africa Summit twenty twenty six.

1361
01:15:42,800 --> 01:15:44,480
Speaker 7: As regis at FSP.

1362
01:15:46,160 --> 01:15:50,360
Speaker 2: The Money Show shape Shifters and it's to eighth the time.

1363
01:15:50,439 --> 01:15:53,120
Speaker 2: Your shape shifter this evening is Peter Armateurs, the CEO

1364
01:15:53,160 --> 01:15:56,840
Speaker 2: of Anchor Capital. Peter, so much has changed since you

1365
01:15:57,000 --> 01:16:00,960
Speaker 2: started this business, that started the trading, the analyst business

1366
01:16:00,960 --> 01:16:02,800
Speaker 2: in nineteen ninety four, but I do want to ask

1367
01:16:02,880 --> 01:16:06,280
Speaker 2: you about what might have been one of the toughest times,

1368
01:16:06,320 --> 01:16:08,400
Speaker 2: I mean for you and your clients. And I'm talking

1369
01:16:08,439 --> 01:16:13,760
Speaker 2: probably about the global financial crisis and the trigger of that,

1370
01:16:14,680 --> 01:16:17,280
Speaker 2: and I wanted to ask a slightly strange question. There

1371
01:16:17,280 --> 01:16:19,840
Speaker 2: been moments when we've been very worried about that South

1372
01:16:19,880 --> 01:16:22,160
Speaker 2: Africa's future. If you look over the last thirty years

1373
01:16:22,160 --> 01:16:24,519
Speaker 2: that you know, who will win this, who will win that?

1374
01:16:25,040 --> 01:16:28,799
Speaker 2: What would it mean? But was there ever a moment

1375
01:16:29,000 --> 01:16:31,639
Speaker 2: through all of that, and we read books now about

1376
01:16:31,640 --> 01:16:34,240
Speaker 2: the sort of late night phone calls between people at

1377
01:16:34,240 --> 01:16:37,400
Speaker 2: the height of that crisis Obama had just taken over.

1378
01:16:38,040 --> 01:16:40,240
Speaker 2: Did you ever worry that maybe this entire system is

1379
01:16:40,280 --> 01:16:42,360
Speaker 2: about to change in a way that we sort of

1380
01:16:42,400 --> 01:16:44,680
Speaker 2: can't get back, that you know, it might not be

1381
01:16:44,720 --> 01:16:47,200
Speaker 2: able to be saved in the way we currently know it.

1382
01:16:47,200 --> 01:16:48,360
Speaker 2: Have you ever had that feeling?

1383
01:16:50,320 --> 01:16:54,400
Speaker 7: Yeah? I mean that I think was there were fundamental

1384
01:16:54,400 --> 01:16:57,759
Speaker 7: concerns that the whole system had broken. I still remember

1385
01:16:57,840 --> 01:17:01,360
Speaker 7: having back at investig in coss If in his heyday,

1386
01:17:02,560 --> 01:17:06,760
Speaker 7: you know, calling us, calling us in and you know,

1387
01:17:07,040 --> 01:17:10,320
Speaker 7: and and indicating that the whole system was twenty four

1388
01:17:10,360 --> 01:17:14,000
Speaker 7: to forty eight hours from being completely frozen. Banks had

1389
01:17:14,000 --> 01:17:17,840
Speaker 7: stopped transacting with each other, and you know, we were

1390
01:17:17,880 --> 01:17:20,360
Speaker 7: quite close to people not being able to withdraw money

1391
01:17:20,400 --> 01:17:23,280
Speaker 7: from a from a cashier because the whole system had frozen.

1392
01:17:23,640 --> 01:17:26,880
Speaker 7: So that was that was really terrifying. I think the

1393
01:17:28,000 --> 01:17:31,160
Speaker 7: you know that and people suddenly understanding that the whole

1394
01:17:31,160 --> 01:17:34,640
Speaker 7: financial system was was a mess. I think it's very

1395
01:17:35,120 --> 01:17:37,200
Speaker 7: a lot more stressful, I think than what we're going

1396
01:17:37,200 --> 01:17:40,200
Speaker 7: through today. You know, today you can still if you

1397
01:17:40,400 --> 01:17:43,840
Speaker 7: terrified of what tech does, you can I've termed a

1398
01:17:43,880 --> 01:17:46,599
Speaker 7: phrase called smoke and coke. You know, that's what people

1399
01:17:46,640 --> 01:17:49,679
Speaker 7: are like taking refuge in at the moment, tobacco companies

1400
01:17:49,680 --> 01:17:53,519
Speaker 7: in coca cola because ar can't touch that, you know,

1401
01:17:53,600 --> 01:17:56,920
Speaker 7: So there's areas of defense and there's places that you

1402
01:17:56,960 --> 01:17:59,760
Speaker 7: can hide. It did feel in two thousand and eight

1403
01:17:59,840 --> 01:18:02,920
Speaker 7: like there was no way to hide, and you you know,

1404
01:18:03,000 --> 01:18:06,439
Speaker 7: people weren't even certain about whether money in the bank

1405
01:18:06,600 --> 01:18:10,840
Speaker 7: was Everything was being questioned. So it's and I think

1406
01:18:10,880 --> 01:18:14,960
Speaker 7: subsequent to that, rules for banks and capital reserves and

1407
01:18:15,040 --> 01:18:18,800
Speaker 7: amount of gearing and you know, the hell of a

1408
01:18:18,800 --> 01:18:21,519
Speaker 7: lot of checks have been put in place by financial

1409
01:18:21,600 --> 01:18:24,400
Speaker 7: authorities to prevent that happening again.

1410
01:18:25,479 --> 01:18:27,519
Speaker 2: Do you think that what they've done is enough? And

1411
01:18:27,560 --> 01:18:30,280
Speaker 2: I realized, you know, we've had many market panics and

1412
01:18:30,479 --> 01:18:33,479
Speaker 2: market events over the years, and it would be foolish

1413
01:18:33,520 --> 01:18:35,720
Speaker 2: to say it will never happen again. But do you

1414
01:18:35,760 --> 01:18:38,599
Speaker 2: think they've done enough? Because sometimes I look at sort

1415
01:18:38,600 --> 01:18:42,120
Speaker 2: of the AI hysteria moments and I'm like, well, we've

1416
01:18:42,200 --> 01:18:45,560
Speaker 2: kind of seen this. Some of the products around mortgages

1417
01:18:45,560 --> 01:18:47,680
Speaker 2: that that led to the global financial crisis were sort

1418
01:18:47,720 --> 01:18:50,720
Speaker 2: of back on sale very shortly afterwards. Things like that.

1419
01:18:50,760 --> 01:18:53,400
Speaker 2: I sometimes wonder if we don't learn enough from our mistakes.

1420
01:18:53,920 --> 01:18:58,559
Speaker 2: You throw in AI taking and I'm sure now making

1421
01:18:58,600 --> 01:19:03,160
Speaker 2: trading decisions a kind of just at times. You know,

1422
01:19:03,240 --> 01:19:06,040
Speaker 2: I sleep usually quite easily at night, but there are moments.

1423
01:19:08,360 --> 01:19:10,639
Speaker 7: Yes, So I think at a bit of a moment

1424
01:19:10,760 --> 01:19:13,400
Speaker 7: in the last month or two where you know, the

1425
01:19:13,439 --> 01:19:17,479
Speaker 7: big the enormous spend on ar kapis and one kind

1426
01:19:17,479 --> 01:19:21,599
Speaker 7: of overestimate the extent of it. What was all it

1427
01:19:21,640 --> 01:19:24,479
Speaker 7: was big companies spending a portion of their cash flows.

1428
01:19:24,840 --> 01:19:27,200
Speaker 7: You know, see if you say alphabet till Google is

1429
01:19:27,240 --> 01:19:30,600
Speaker 7: making one hundred and fifty billion dollars operating profit and

1430
01:19:30,760 --> 01:19:34,280
Speaker 7: was spending last year eighty or ninety. When all of

1431
01:19:34,280 --> 01:19:36,679
Speaker 7: the big companies this year came out to their capex

1432
01:19:36,720 --> 01:19:39,960
Speaker 7: spend numbers, they were all dramatically bigger than their actual

1433
01:19:40,000 --> 01:19:42,840
Speaker 7: cash flows. So this is the year that they all

1434
01:19:42,880 --> 01:19:46,200
Speaker 7: start to take on debt to enter into this this

1435
01:19:46,360 --> 01:19:49,439
Speaker 7: unknown world in terms of how to monetize it, and

1436
01:19:49,479 --> 01:19:52,240
Speaker 7: you see a lot more credit. And that's the question

1437
01:19:52,360 --> 01:19:55,280
Speaker 7: being bandied around in the in the credit world is

1438
01:19:55,360 --> 01:19:57,800
Speaker 7: you know, have has money been lent to companies that

1439
01:19:57,800 --> 01:20:00,080
Speaker 7: are either going to be disrupted or won't get a

1440
01:20:00,120 --> 01:20:02,680
Speaker 7: turnout of AI So it's nowhere. I mean, it's not

1441
01:20:02,720 --> 01:20:05,560
Speaker 7: even a fraction of we were with a global financial crisis,

1442
01:20:06,000 --> 01:20:09,519
Speaker 7: but you have started to get into a portion of

1443
01:20:10,200 --> 01:20:12,880
Speaker 7: a time in the market where people and are they

1444
01:20:12,880 --> 01:20:16,599
Speaker 7: weren't gearing up on this new world. They aren't gearing

1445
01:20:16,680 --> 01:20:19,880
Speaker 7: up on it. So if it doesn't manifest itself in

1446
01:20:22,000 --> 01:20:26,519
Speaker 7: massively increased profitability, you know, the debts can be bad debts.

1447
01:20:26,520 --> 01:20:29,080
Speaker 7: And it's i mean, an interesting thing the other day

1448
01:20:29,160 --> 01:20:32,760
Speaker 7: is Alphabet, which is Google issued a one hundred year

1449
01:20:32,800 --> 01:20:36,400
Speaker 7: bond and that to me is a fair sign of

1450
01:20:36,800 --> 01:20:39,400
Speaker 7: kind of the market getting a little bit crazy and

1451
01:20:39,520 --> 01:20:43,320
Speaker 7: providing support regardless. You know, are you how confident can

1452
01:20:43,360 --> 01:20:45,719
Speaker 7: you be that any company that is in the text

1453
01:20:45,720 --> 01:20:47,639
Speaker 7: space is going to be around in one hundred years

1454
01:20:47,640 --> 01:20:49,879
Speaker 7: time to carry on paying you back.

1455
01:20:50,479 --> 01:20:52,760
Speaker 2: Especially it has only been around for what thirty years

1456
01:20:52,840 --> 01:20:56,679
Speaker 2: at most? I think the mid nineties. Yeah, so thirty years, Peter.

1457
01:20:56,800 --> 01:21:00,040
Speaker 2: We've got thirty seconds left away from all of that.

1458
01:21:00,240 --> 01:21:02,040
Speaker 2: What do you do for fun? Do you still watch

1459
01:21:02,080 --> 01:21:04,040
Speaker 2: the Sharks for fun rather than professionally?

1460
01:21:04,120 --> 01:21:04,240
Speaker 9: Now?

1461
01:21:05,640 --> 01:21:09,160
Speaker 7: Yeah, and joy sport. You know, I'm still very busy.

1462
01:21:09,160 --> 01:21:11,759
Speaker 7: You sat some time with the family playbit of golf,

1463
01:21:12,560 --> 01:21:16,479
Speaker 7: the I'm a participant in the latest pedal craze, but

1464
01:21:16,600 --> 01:21:19,639
Speaker 7: it's mainly just been equality time with friends and family.

1465
01:21:20,720 --> 01:21:22,920
Speaker 2: Peter armitag has been great talking to you tonight. Thank

1466
01:21:22,960 --> 01:21:25,960
Speaker 2: you very much. Indeed really do appreciate it. Peter Armitage

1467
01:21:26,000 --> 01:21:28,360
Speaker 2: is the CEO at Anchor Capital.

1468
01:21:30,640 --> 01:21:33,120
Speaker 13: The Money Show Stephen Crutez is brought to you by

1469
01:21:33,160 --> 01:21:36,840
Speaker 13: Absolute Corporate and Investment Banking, proud sponsor of the LMA

1470
01:21:37,280 --> 01:21:41,280
Speaker 13: ICMA Loan End Capital Markets Africa Summit twenty twenty six.

1471
01:21:41,560 --> 01:21:42,800
Speaker 7: Absolute regis at FSB.

1472
01:21:45,360 --> 01:21:48,439
Speaker 2: Well on today, we're going to remember for the budget.

1473
01:21:48,640 --> 01:21:51,840
Speaker 2: In the US, markets are looking up. The Dow Jones

1474
01:21:51,920 --> 01:21:53,960
Speaker 2: is up point sixty three, the Nasdaq is up one

1475
01:21:54,000 --> 01:21:56,360
Speaker 2: point one and the S and P five hundred is

1476
01:21:56,439 --> 01:22:00,160
Speaker 2: up point seventy one percent. At at the moment all

1477
01:22:00,280 --> 01:22:02,800
Speaker 2: us to contemplate and think about when it comes to

1478
01:22:02,800 --> 01:22:05,080
Speaker 2: the budget. We'll look as well at a little bit

1479
01:22:05,120 --> 01:22:07,599
Speaker 2: of that tomorrow because I think sometimes when you go

1480
01:22:07,680 --> 01:22:10,200
Speaker 2: to sleep and you wake up the next morning, you

1481
01:22:10,320 --> 01:22:12,639
Speaker 2: just think of the same fact in a slightly different way,

1482
01:22:12,680 --> 01:22:14,960
Speaker 2: and I think it's important sometimes to get a more

1483
01:22:14,960 --> 01:22:17,839
Speaker 2: considered view. So more on that on the budget tomorrow.

1484
01:22:18,160 --> 01:22:20,080
Speaker 2: Who we're back tomorrow. Good evening, it's eight o'clock.

1485
01:22:23,200 --> 01:22:30,360
Speaker 1: This is n good evening.

1486
01:22:30,439 --> 01:22:34,680
Speaker 16: I'm my Gimelapo. Finance Minister in Guana has announced some

1487
01:22:34,880 --> 01:22:38,679
Speaker 16: increases in social grants in line with inflation. The old

1488
01:22:38,760 --> 01:22:41,880
Speaker 16: age pension will go up by eighty five rand to

1489
01:22:42,080 --> 01:22:45,519
Speaker 16: two thousand, four hundred rand a month. This is the

1490
01:22:46,000 --> 01:22:49,760
Speaker 16: same for the disability grant, while war veterans will get

1491
01:22:49,760 --> 01:22:53,479
Speaker 16: an extra twenty rand. However, the Social Relief of Distress

1492
01:22:53,520 --> 01:22:55,840
Speaker 16: grant will remain at three hundred and seventy rand for

1493
01:22:55,880 --> 01:22:58,640
Speaker 16: another year. Tabling the twenty twenty six budget in the

1494
01:22:58,720 --> 01:23:02,479
Speaker 16: National Assembly earlier today, Godogana warned that abuse of the

1495
01:23:02,520 --> 01:23:06,120
Speaker 16: grunt system will not be tolerated. Lindsey Dentlinger takes a look.

1496
01:23:06,240 --> 01:23:09,200
Speaker 16: Social grounds still constitute the largest share of spending on

1497
01:23:09,240 --> 01:23:13,439
Speaker 16: social development excluding the Social Relief of Distress Grant introduced