Friday 31 March 2017

New Finance Minister Malusi Gigaba will have to learn quickly

Jim price aero financial

Economist Iraj Abedian says newly appointed Finance Minister Malusi Gigaba and is deputy will have to learn the ropes quickly.

“You’ve a minister and deputy minister who have zero experience in finance and a lot of unfortunate baggage in different capacities and positions.

“So there’s no doubt at all that they’ve a lot of learning to do, both from the financial point of view and from the fiscal management point of view

Econometrix economist Azar Jammine says the markets are not going to like the reshuffle.

“It was a purge of all those who were against Zuma, in favour of those who basically are going to be close to him and this relates to the finance ministry.”

The Presidency released a statement in the early hours of Friday morning announcing the adjustments affecting 20 people.

President Jacob Zuma says the changes bring some younger Members of Parliament and women into the national executive to benefit from their energy and experience.

On Thursday, the president called a meeting with the African National Congress (ANC)’s top six in the capital amidst speculations that he could be changing his Cabinet.

Finance Minister Pravin Gordhan, Energy Minister Tina Joemat-Peterson, Transport Minister Dipuo Peters, Public Service and Administration Minister Ngoako Ramatlhodi and Tourism Minister Derek Hanekom have all been axed.

Ebrahim Fakir, who says the sudden changes at Treasury are cause for concern.

“We can’t be consistently having new people in portfolios which require a degree of stability over time. It doesn’t happen.”

Meanwhile, Dr Somadoda Fikeni says the reshuffle will not do the African National Congress (ANC)’s unity campaign any favours.

“It is likely to simply deepen divisions within the ANC alliance partnership and within the ANC itself and it might just make matters worse with the party heading to the policy conference.”

Economist Russel Lamberti says he cannot imagine a good outlook for the South African economy in the wake of the news of Finance Minister Pravin Gordhan and his Deputy Mcebisi Jonas being fired.

Lamberti says South Africa may be in for a rough couple of weeks, with probabilities of the rand reacting the same way it did when former Minister Nhlanhla Nene was removed and even worse.

“The likelihood is that the foreign investment community, the local investment community are going to see it in a very bad light and it looks like we’re in for another rough ride. It looks like a repeat of December 2015 but this time maybe more rougher.”

INTEREST RATES

The rand is in free fall on the back of the Cabinet reshuffle and this could mean the interest rate may not be cut later this year as had been speculated.

Governor Lesetja Kganyago announced the repo rate will remain unchanged at 7%, leaving the prime lending rate at 10.5%.

He says although economic growth remains weak, the bank has adjusted its forecast upwards to 1.2% for 2017.

For More Information:- Mia Lindeque & Masego Rahlaga

Monday 13 March 2017

Charles Schwab launches hybrid human-robo financial advice

Jim Price Aero Financial
A Charles Schwab office is shown in Los Angeles, California January 29, 2016. REUTERS/Mike Blake

NEW YORK (Reuters) - Brokerage Charles Schwab Corp on Tuesday launched a service that combines its automated investment management technology with human advisors, as financial institutions race to offer digital financial advice.

The service, called Schwab Intelligent Advisory, provides clients with a financial and investment plan, unlimited access to a human advisor via phone or video conference, and an investment portfolio of exchange-traded funds managed by computer algorithms.

The service, for clients with at least $25,000 to invest, includes an online platform that keeps track of financial goals and retirement plans, the San Francisco-based company said in a statement. It will charge a 0.28 percent fee on assets, with a quarterly maximum of $900.

The service comes less than two months after Betterment LLC, one of the first and largest online wealth managers known as rob-advisers, said it would offer two similar hybrid plans, with minimum investments of $100,000 and $250,000.

Betterment's move marked a surprising shift toward human advisors. Rob-advisers had focused on automation to capture lower net worth clients regarded as too expensive to service.

The sector prompted established financial institutions to launch similar services, raising concerns about whether small rob-advisers could survive the competition.

Large financial institutions can afford to charge less for rob-advice because they also offer the exchange-traded funds in their automated portfolios.

Schwab, which announced the hybrid service in December, has been one of the most aggressive established brokerages to fight back against rob-advisers. It launched its first rob-advice product two years ago and quickly added clients.

For More Information : - Anna Irrera

Wednesday 8 March 2017

Duterte tax reform may be passed in first half finance official


MANILAThe first part of President Rodrigo Duterte’s tax reform package may be passed in Congress as early as the first half of this year, a finance official said.

This includes lower income taxes for the middle class, which will be offset by higher rates for the “ultra rich” and the removal of some value added tax exemptions.

“We plan to do this by simplifying our tax system, making it more progressive and making it more efficient,” finance undersecretary Bayani Agabin told ANC.

Agabin said the finance department uncovered some 100 VAT exemptions. “Every time you give exemptions, this gives rise to tax leakages. We are seeking to plug that,” he added.

Duterte is also seeking higher excise taxes on fuel and car purchases under the reform push.

“I do believe that passage of this reform will signal a very strong change, both the political will in our system as well as a signal that the economic team is trying to do the right thing relative to collections versus spending,” Philippine Stock Exchange president Hans Sicat said.

For More Information:- ABS-CBN News