Glacier Quarterly 4 - 2018

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INVESTMENT INSIGHTS URGENT NEED for lower interest rates 14
South Africans are justified in their concern over the Reserve Bank Monetary Policy Committee’s (MPC’s) refusal to lower the country’s benchmark lending rate further. The apparent obsession with keeping inflation as low as possible has undoubtedly contributed to the rising unemployment rate in the country, as well as the declining economic growth trend. In most countries, a logical monetary policy response to a combination of lower inflation and lethargic or negative economic growth – as is the case in SA – is to lower the official bank rate, which automatically leads to lower commercial bank lending rates and relief for consumers and businesses with debt. The monetary policy mission statements of virtually all the world’s central banks clearly state the need to strike a balance between maintaining price stability on the one hand, and ensuring adequate levels of economic growth and employment creation on the other. It defies comprehension that the MPC and its economic advisers seem to ignore the following facts: Inflation has been comfortably within the target range of 3% to 6% for 19 successive quarters, while the negative gross domestic product (GDP)growth rate of the past two quarters (quarter-on-quarter basis) is placing undue pressure on the country’s public finances. Several reasons exist for increasing frustration at the MPC’s failure to understand the dire need for interest rate relief, including: • The average rate of inflation, as measured by the consumer price index (CPI), is at its lowest level in eight years • Manufacturers have stated that the high level of unutilised productive capacity in this crucial sector is the result of insufficient demand in the economy Average rate of consumer inflation in SA (Source; Stats SA) AVERAGE RATE OF CONSUMER INFLATION IN SA 6.4 % 6.1 Upper range CPI target 5.8 5.5 5.2 4.9 4.6 CPI 4.3 4 2010 2011 2012 2013 2014 2015 2016 2017 <strong>2018</strong> (Source; Stats SA) 15
Page 1: GLACIER QUARTERLY NOVEMBER 2018 QUA
Page 4 and 5: INVESTMENTS Finding balance in a wo
Page 6 and 7: INVESTMENTS We as South Africans so
Page 8 and 9: INVESTMENTS words, a diversified po
Page 10 and 11: INVESTMENTS EQUITIES: is it time to
Page 12 and 13: INVESTMENTS There’s a saying in f
Page 14 and 15: 12
Page 18 and 19: INVESTMENT INSIGHTS • An inverse
Page 20 and 21: SA 2019 STICK AROUND: SA turnaround
Page 22 and 23: SA 2019 campaigning, we’re probab
Page 24 and 25: SCENARIO PLANNING Breaking the late
Page 26 and 27: SCENARIO PLANNING Quality of Infras
Page 28 and 29: TRENDS SOUTH AFRICA 2019: investing
Page 30 and 31: economic growth stagnates - perhaps
Page 32: The information in this document is

Glacier Quarterly 4 - 2018

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