CAPITAL MARKET INVESTMENTS
IFG is aligned with the new legislative environment and has implemented a standard financial planning and investment process to meet all the requirements in terms of the relevant laws. We recognise the need to measure our advice to clients according to a benchmark that sets the standard in the industry. Our benchmark of the "best advice" and offering "superior services" are the cornerstones of this process.
We ensure a high standard of financial planning within the company and provide the means to maintain that standard. Our in-house designed financial planning tools and modules make it possible to deliver a professional financial and investment planning service, backed by our excellent reporting processes. Through our para-legal team we provide financial planners with support on legal technical matters.
WHY IFG AFRICA?
We are a specialist equity team within IFG Africa Financial Investment Group and offer both sector-specific and general equity funds, predominantly within the South African market. We also offer Pan Africa funds to investors seeking exposure to the broader African continent.We invest in companies that are undervalued and demonstrate an ability to create shareholder value over time, and our investment approach gives us the ability to deliver competitive returns through different market style cycles. We do this by combining a fundamental, valuation-based approach with other proven investment factors such as quality and momentum.
While valuation has proven to be a vital ingredient to long-term outperformance, our research shows that the inclusion of other key variables adds a crucial dimension. The combination of valuation and these uncorrelated variables broadly grouped as Quality, Growth and Momentum, provides a more balanced approach to decision making, enhancing our ability to avoid ‘value traps’ and deliver competitive returns though different market cycles.
Entrepreneurship is about passion. Great entrepreneurs are not driven by a simple desire to make money. They are driven by a need to change the world. They may change the world by building a better operating system or a better search engine or a better social network. But whatever it is they are building, great entrepreneurs are driven by passion.
The same is true of IFG Africa.
It is not enough to simply hope to make a buck. The best Venture Capitalists fund companies about which they are truly passionate. Building great companies takes a long time. And it is never a straight path. But a shared desire to create something great "something important" will carry entrepreneurs and IFG Africa alike through the tough times, but more important to grow financial investemnts for our clients.
So, how do the offshore equity investors presently see South Africa?Growth/momentum institutional investors are the least persuaded by the South African story. This reflects concerns in the weak and weakening rand on the one hand, and the weak overall financial growth functionality projected into a lacklustre corporate earnings outlook on the other. This isn't one of a kind to South Africa.A similar slowdown in other development markets including Turkey is forecast as their central banks start to raise rates of interest. In the end, this can be most likely to result in an financial slowdown.Money flow oriented/value investors continue to approach South African investments using a deep basic method in addition to a constructive outlook. Their concerns have resulted in their applying a greater discount to their investment thesis and eventually seeking for less costly valuations to improve investments.Liquid, well-managed companies with well-understood equity stories are in the top on the add-on list.Amongst certain mining investors and a lot of specialist mining funds, local mining has come to be just about ?untouchable? because of the labour strife. Ought to the labour difficulties be resolved, the platinum group metals sector may possibly as soon as once again turn into an attractive investment.Hedge funds, in distinct, continue to think that local banks are broadly exposed to unsecured lender credit pressures and that these will contaminate loan growth and non-performing loan ratios. This, in turn, will contaminate the earnings and return outlook.How do the offshore institutions see our currency?Last year a lot of the outflow that pushed the rand weaker was a combination of speculative interest in the context of a tapering environment, a reduction of overweight offshore bond positions and active ?overlay hedging? from genuine income investors that have been extended South African equities and bonds.But so far, this year has been somewhat various: portfolio flows in both bonds and equities happen to be disappointing. Since the start off with the year, there have been only 4 days of good inflow in to the bond market, totalling R1.five billion (versus bond outflows of nearly R7bn).The equity market has noticed net outflow of around R1bn for the year to date and only six constructive days of inflow. In other words, what we're experiencing may be the effect of a 6.eight percent current account deficit inside the absence of portfolio inflows.Clearly the US dollar inside a tapering environment together with expectations relating to the prospective near-term overall performance of growth markets generally and much more especially concerns over the perpetual labour problems are all combining to producefragile sentiment. That is true in respect of emerging marketplace assets generally and for the country. This suggests the opportunistic inflows that we would have expected within the past are basically not materialising to help the currency,.Eventually, the ?shorts? appear to become continuing to focus on nations that retain substantial existing account deficits and are overly reliant on portfolio inflows as the major source of their financing.The ?early adopters? of a far more hawkish monetary policy stance (Brazil, India and Indonesia) have observed their currencies stabilise in the past six weeks, whereas these viewed as continuing with actual prices which are as well low to attract or perhaps retain capital continue to weaken. South Africa?s rate hike final week may have met some, though not all, of those expectations.As opposed to the central banks of other important emerging markets, the SA Reserve Bank established an inflation targeting framework in 2000. The framework has been successful in managing inflationary (and deflationary) pressure, anchoring inflation expectations and supporting growth within the past 14 years. Therefore, we anticipate the Reserve Bank to preserve its measured method to any further rate action and focus on the inflation and development outlook consistent with this framework.