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SA’s Prospects for 2012

What Are The Prospects For SA’s Economy in 2012?

South Africa’s money matters are intertwined with the rest of the world, which is presently under pressure. If others stumble, so will we.
America does not seem to be making much economic progress, and Europe isn’t making progress in solving its crisis. The Middle East and North Africa still remain unstable, too.
The oil price still remains at $100 a barrel.
Inflation:
• The inflation rate is set to exceed 6% by the end of 2011and should remain there for the first part of 2012, but will gradually drop towards the end of the year.
• It seems that an average rate of 5.6% inflation rate is expected in 2012, compared to that of 2011 which stood at 5%.
• Increases in municipal bills could add pressure on the individual pocket.

Interest Rates:
• Interest rates have dropped 6,5% over the past 5 years.
• This makes debt less stressful.
• The prime lending rate is 9% and has said to remain stable this year, and could be the trend right into 2013.
• If interest rates do change, they are more than likely going to drop and not rise.
• This does not bode well for pensioners that are living on interest.

Our Rand:
• The longer the situation is drawn out in Europe, the longer the rand will remain weak.
• This does not bode well for people travelling abroad and also for those that import.

Live within your means and avoid unnecessary debt and continue to save as best you can.

Beware Foreign Lottos

Many Have Been Alerted To The ‘Millions’ We Have Won

• Scammers are really smart, and a day seldom goes by without a notification from some amazing international lotto that an individual has won.
• Be alert at all times and beware of all the fake lotteries that are out there, ready to ensnare the unsuspecting.
• You will be either informed by SMS or email; and we are not talking about rands, these are fake lotteries where you stand to win millions in euros, dollars and pounds.
• Many individuals fall into this type of trap, and are then persuaded to part with thousands of rands and they never win a dime.
• A typical example is after you have been informed of your windfall, you are told you first have to pay taxes to release your money or you have to pay an administration fee.
• Another typical scam is all the fake “prizes” that you have apparently “won”.
• It is quite simple, really, no lotto ticket, and no win. It is that obvious.
• No lottery has every picked random email addresses or telephone numbers and rewarded individuals that have not even paid for a lotto ticket; it makes perfectly reasonable and good sense.
• If you ARE lucky enough to win a prize or something you are not aware of, you can always find out more, especially if the company is a well-known one, by visiting the website, and then calling the head-office to verify the win.
• Never open any links from banks; these are phishing expeditions.

Your bank will never request your personal information on email or sms, for personal information.

Ten Pointers to Illustrate Investment and Risk

Investment Strategies To See You Through
• When it comes to investing, entrepreneurs have a tendency to be protective of their hard-earned money.
• Unsurprisingly, even the bravest investors started selling off their shares in 2008 when the Dow Jones plummeted to an all-time low.
• You need to establish an investment strategy that will see you through good and bad times.
• Assess your personal tolerance for investment risk.
• Your personal circumstances will give a very different sense of risks you are willing to take in building the private equity of your business versus those you are willing to take with liquid investments of which you have little or no control.
• Your tolerance for investment risk can fluctuate based on how much financial security you have already created for yourself.
• Consult with an investment advisor about long and short-term investments before making any decisions.
• Create a plan that will provide you with potential for capital appreciation and income generation, but one that will also give you peace of mind.
• Always match your investment to your investment personality.
• No investment is 100% safe.

Investors who panic when the market collapses and hope to get on the bandwagon when markets improve usually risk losing their original investment.

Contract for Difference Investments

A New Form of Investment; Contract for Difference Investments
There is a new form of investment that is gaining popularity which appeals to the up-market private investor; an investor who is looking for flexibility and a need to make the most of assets.
The investment is called Contract for Difference Investments. CFD’s are agreements to exchange the difference of a financial tool between the time at which the contract is opened and the time the contract is closed.

Unique features that make them attractive to retail investors and institutions are the fact that they are transparent and their pricing.

What, then, are CFD’s and how do they work?
• FD’s were originally utilised by investors of institutions to hedge their exposure to stocks.
• They are gaining popularity among retail investors.
• They have a couple of unique features that make them particularly attractive to investors; these are transparency and pricing.
• Only an initial deposit is required when trading a CFD.
• The initial deposit amount depends on how volatile the market it.
• They provide a lucrative way in to the equity market.
• The product is therefore leveraged and the investor needs to be attentive to risks.

The lucidity of CFD’s is attractive; what you see is what you get. You pay commission on your trade and any interest costs are subtracted and charged separately and calculated immediately so that you are aware of the monies involved right from the outset.
When trading CFD’s it is important for investors to research the company that they decide to trade with, and consider the technology offered by the company you select.

FUNDING FOR YOUR BUSINESS
1.    New businesses face the problem when starting out of raising sufficient funds and will also face difficulties getting a bank loan. One alternative to consider is venture capital which offers capital in exchange for equity in a company. This type of funding is ideal for new businesses since it focuses mainly on the future
prospects of a company rather than past performance as a primary criteria – as used by the banks.
2.    Asset based lending has become increasingly popular as a means of funding growth and providing working capital. This is where a lender accepts the assets of a company as collateral in exchange for a loan. Most of these loans are financed against accounts receivable and sometimes even against inventory. Another type is factoring which involves the purchasing of a company’s accounts.
3.    Long term funding is a loan where the interest and part of the principal are paid back in equal instalments over the life of the loan.  These are usually given by commercial banks government sponsored loan programs or small business investment companies.
4.    A line of credit is designed to provide short term funds to a company in order to maintain a positive cash flow. As funds are generated later, the loan is repaid. One advantage of a line of credit is that the no interest is accrued until the funds are withdrawn, but the line is immediately available for the company’s cash flow
needs.
5.    A letter of credit is a guarantee from a bank to a service provider that will be honoured by the bank if the borrower fails to pay. Letters of credit can be useful when dealing with new vendors who may not be assured of a company’s credit worthiness.
 

Take a pinch of negative retail sales, a dash of high unemployment and add to a £15.9 billion public sector net borrowing requirement. Be sure to squeeze household spending then rub in high inflation, low wage growth, public sector job cuts and crippling austerity measures. Combine the two mixtures, bring to the boil for a few months and serve on a platter of Eurozone debt contagion and a slowdown in global growth. If that isn’t a successful recipe for a recession I don’t know what is.

The IMF told us little that we don’t already know when they lowered their growth forecasts for the UK last week and there are certainly more tough times on the horizon. So, surely we can expect swift and decisive action from central banks and governments alike in an effort to baton down the hatches in the eye of the storm? Well, not necessarily.

The Bank of England minutes revealed that only one MPC member, Adam Posen, voted for further QE at the September meeting. All of the MPC elected to keep interest rates unchanged but when it came to the crucial question the minutes say “for some members, continuation of the condition seen over the past month would probably be sufficient to justify an expansion of the asset purchase program at a subsequent meeting”. Translation – we need to see a poor Q3 growth estimate, the final nail in the coffin, before we will agree to act. Most market participants believe more QE will come through in November although some believe we will get an extra £50 billion as soon as October.

It is difficult to gauge the potential effect of the program given the current state of the global economy. The good news is that it will definitely have a positive impact which is a boost the UK economy is long overdue.

Key releases for Sterling this week

Please note that movements on currency markets will be dominated this week by the unfolding sovereign debt crisis in Europe. If you would like to take advantage of our free rate watch service please contact your dedicated dealer.

Mortgage approvals are out on Thursday at 9.30am – we are expecting a fairly flat to mildly positive reading which will be bullish for Sterling.

Gfk consumer confidence out on Thursday at midnight – we are expecting a poor reading which will be bearish for Sterling.

EUR/USD

The Euro encountered strong support below the 1.3650 level against the Dollar on Wednesday and strengthened to highs above 1.3750 towards the close of trading. There was a degree of relief over the Greek debt situation and the threat of default, as the government pledged to increase austerity measures through additional spending cuts.

There were still major concerns about whether the government would be able to deliver the cuts considering the extent of divisions and popular discontent but the move helped provide near-term support to the Euro. There were continuing fears surrounding the banking sector as underlying stresses persisted. The IMF estimated that at least €200 billion would need to be raised and there were fears over the level of debt at French banks.

The latest FOMC statement said that the Fed will be buying $400 billion in longer-dated securities in the period until Mid 2012 through the selling of shorter-term securities. The Fed also announced that it would target mortgage-backed securities in an attempt to keep mortgage rates down. There was, however, no introduction of further quantitative easing measures at this stage with the Fed remaining downbeat on the economic situation.

Global stock markets fell sharply following the meeting, triggering a sharp deterioration in risk appetite and pushing the Dollar stronger against the majority of the 16 most actively traded currencies. The Euro came under fresh selling pressure yesterday, retreating sharply to lows near 1.3420, the lowest level since February.

Underlying confidence in the Euro-zone economy will continue to deteriorate and there was additional pressure for more decisive action at the IMF and G-20 meetings over the weekend. There is continuing speculation that Greece would default and there are concerns over the Euro-zone banking sector that will continue to undermine the Euro.

Fourteen other European countries besides Holland make use of the Euro for their currency.
The Euro, for those not in the know is made up of one hundred cents. The coins are separated  into 1, 2, 5, 10, 20 and 50 cents and the Euro comes 1’s and 2’s. There are also euro notes of 5, 10, 20, 50, 100, 200 and 500 denominations.

If you do travel to Holland it is good to remember that there are a couple of shops that won’t accept large denominations.

Before the Euro, the Dutch made use of the Dutch Guilder, but this is no longer used and is rendered nil and void.
When you travel to Holland you will find it useful in that you will be able to exchange your money almost anywhere, but the post offices normally offer the best rate of exchange for your money. Hotels are renowned to have a high exchange rate and the banks are not particularly fast.
The Dutch prefer if you use cash as opposed to credit cards, and you will find that not all place accept credit cards, although this attitude seems to be changing.
ATM cards are useful when drawing money or making purchases in Holland, so watch out for the Maestro logo displayed on ATM machines.
You have visited the right place if you are in the market for Euros – simply contact us to find out more on Euros and anything to do with foreign money.

Which countries make up the GCC countries? There are six all in all and include Bahrain, Kuwait, Oman, Saudi Arabia, Qatar and the UAE.CGG simply means the Gulf Cooperation Council, which was formed the year 1981. These countries share politics, economics culture and also religion, as all these countries mostly practice Islam. With the exception of Bahrain, the other five countries rely on oil.
Although, globally, the world as a whole took a strong beating and some countries still seem to be battling it out economically, Dubai is beginning to recover after the virtual collapse of its powerful economy, and it seems as if the confidence in this once-powerful desert paradise is gaining confidence in investors starting to re-invest in the economy of Dubai.
Dubai is once again becoming an attractive an attractive investment opportunity with GCC countries clamoring to invest once again especially those from both Kuwait as well as Bahrain.

Online market exchange will keep investors in the know, ensuring that the investor will not miss the perfect opportunity when to buy and when to sell at excellent prices.  Should stock in Dubai increase or decrease, you would want to know the movement all times. All serious investors are aware that now is the perfect time to make your move.

Smart investors choose clever business partners to assist in keeping them up to speed all the time.  That is where Forexfundi will be able to assist; we show you where to invest at all times keeping you in the loop 24/7.

You have come to the right spot if you are looking for investment opportunities in Dubai. Contact us for more on Dubai investments and other forex queries.

It is not only the Rugby World Cup that has lured so many South Africans to New Zealand;  many South Africans have made their homes in New Zealand, making the trade and exchange from the South African Rand to the New Zealand dollar pretty much an everyday occurrence. If you do have family living overseas or run a business between the two countries, and need to exchange monies on a regular basis and you don’t necessarily want to pay taxes on the exchange rate and getting more for your dollars or rands, then make use of a forex agent and open up a forex account to save you money in the long haul.
The currency used in New Zealand is the New Zealand dollar and the money comes in 10, 20 and 50 cents and $1 and $2 denominations. Notes have values of $5, $10, $20, $50 and $100.
There is no restriction on the amount of foreign money that can be brought in or taken out of New Zealand, which is advantageous if you intend either moving to this beautiful country or would like to trade in and out of New Zealand.  However, every person carrying in excess of NZ$ 10,000 in cash is obliged to fill out a Border Cash Report.
Foreign currency can easily be exchanged at banks, post offices, hotels and Bureau de Change kiosks dotted all over the country. Credit cards can be used in New Zealand and travellers cheques are accepted, but if you are smart, you will enlist the services of a forex agent to handle your foreign money matters on your behalf.
If you would like to know how to make use of a forex account or forex agent, you have most certainly come to the right page.