1. All Former Spouses To Get Their Share Of Pension Benefits
2. Residential Property A "Great Thing" - Investment Fundi
3. Making Property Profits In "Darkest" Africa
4. Property Market: Waiting For The Crash
5. Shake Up For Home Loans' Market
6. You Have To Cover Many Bases When Preparing A Will
7. Many Scheme Members Will Pay 10 To 13 Percent More
8. Why We Avoid New Listings - Allan Gray
9. Fund Focus
10. Thought for the Month
All Former Spouses To Get Their Share Of Pension Benefits
The Pension Funds Adjudicator last week ruled that all former spouses who are entitled to a share of their partners' retirement benefits in terms of a divorce order must have immediate access to these benefits.
Residential Property A "Great Thing" - Investment Fundi
One of SA's best asset managers likes residential property, but isn't so keen on listed property.
Investec Asset Management's Sam Houlie, one of the country's most astute investment professionals, says it is a good idea to get into the residential property market as soon as possible.
Making Property Profits In "Darkest" Africa
Real estate experts give pointers on making money on the continent.
Many of Africa's leaders lament the lack of foreign direct investment, while foreign investors are deterred by risks that could dent their profit margins.
On a continent where most countries are showing economic growth, how can developers and other property industry players participate in returns without losing their shirts?
Property Market: Waiting For The Crash
Deciding whether to buy or sell a house or flat now, or later.
A few years ago, everyone was talking about stocking up on more property. With prices soaring, making ordinary income earners feel decidedly wealthy - and easy access to mortgages - it seemed like an obvious thing to do.
But now the pressure is on. With interest rates ticking steadily upwards for some time, some investors are beginning to feel the pinch as loan repayments have jumped by at least 30%.Real estate experts give pointers on making money on the continent.
Shake Up For Home Loans' Market - Moneyweb
New Investec-backed entrant set to take on SA's "big four" with fast switches to cheaper mortgages.
Simon Stockley is anything but a financial sissy.
After paving the way in the mortgage securitisation market with SA Home Loans in the late 1990s, and later starting a mortgage company in Saudi Arabia, he is back - this time with a new home loan offering designed to take on the big four banks.
Standard Bank, Absa, Nedbank and FNB enjoyed bumper profits along with the residential property boom this decade, with much money coming from home loans. SA Home Loans was a welcome competitor, but now has as a major shareholder Standard Bank.
Stockley is introducing Integer, a mortgage product that includes transactional banking and credit facilities, to consumers.
He is aiming at new buyers as well as trying to tempt existing home owners to "switch" mortgages for a better deal.
Things have got a little tighter for potential property buyers in these days of rising interest rates, so some might argue Stockley's timing is a little off. Of course, current owners feeling the pinch may be tempted to explore their options with Integer.
Also not to be overlooked is that many property buyers are channelled to banks through originators who pay estate agents for business referrals - directly and indirectly. Stockley's new business will have to compete with this established and well-oiled system.
In addition, the offering will be securitised - or sold off in the debt market like bonds to asset managers - at a time when the whole world has got decidedly nervous about property finance amid the US sub-prime crisis.
Even Investec - an investor in Integer along with Purple Capital - took a hammering amid the global housing market toil.
The game plan
An upbeat Stockley told Moneyweb's Realestateweb: "I think the opportunity exists for companies like ours. Banks inherently do it (home loan provision) badly. Our job is to get out there and do it better. There's a gap for a niche player."
Integer would be a "price proposition but also a service and retail experience".
It aims to give full credit approval, including valuing a property, within two days. Currently, applicants are generally waiting at least five to seven days and often much longer.
Of the securitisation approach, Stockley said: "We do not see the current US sub-prime meltdown as a problem for launch, but rather as an opportunity."
"Once the dust has settled, asset managers will once again be seeking quality mortgage assets to fund and we are targeting the very best underlying collateral," he said.
Stockley said Integer would start with a web presence and call centre, but was planning its own branded sales' force, along the lines of the SA Home Loans' model.
It has arrangements with some mortgage originators, mostly in the Finbond stable.
Among the areas Stockley believes Integer can beat the big banks are:
- A new technology platform build specially to cater for this type of product; and
- Its price proposition. Integer will compete on discounts below prime.
He is aware of the challenges, saying that the big four banks are "very cosy", controlling about 90% of the home loans' market through their "club".
While the National Credit Act (NCA) is proving troublesome for some banks to bed down, Integer has a system built specially taking into account the requirements of this new legislation, he said.
In addition, Integer plans to be "prudent" about credit granting, so the NCA is not seen as an obstacle.
Stockley said the product was a "one account concept", but that, unlike FNB's One Account, the system is designed to cope from an accounting perspective.
Moneyweb recently exposed problems with the FNB One Account, with the bank admitting to interest calculation errors.
The Integer CEO said it would also be possible for clients to run their home loan parallel to their other banking, so that they do not lose track of short-term spending and can pay off a home loan quickly.
Loans will be offered up to 85% of the home value and up to an amount of R2,5m. A credit facility of 1% of the home loan will be offered on a Visa debit card at the home loan rate, plus clients will receive free internet banking.
As with all new offerings, the proof will be in the pudding. Few, however, can argue that a shake-up on price and speed of service in the home loans' sector would be most welcome.
You Have To Cover Many Bases When Preparing A Will
Estate planning – or planning how your assets should be distributed after your death – should be considered alongside your retirement planning, disability planning and other aspects of financial planning so that you have a holistic financial plan, Debbie Netto-Jonker says.
Many Scheme Members Will Pay 10 To 13 Percent More - Laura du Preez
Three large open medical schemes recently announced their contribution increases for next year, with average increases on two schemes coming in at just below 10 percent and the third coming in at more than 13 percent.
Why We Avoid New Listings - Allan Gray
Company listings on the stock exchange are picking up again, with quick profits for some who buy before a company goes public and sell shortly afterwards when the price rises.
Should you join this merry throng of stock market investors? Think twice, is the message from Allan Gray, one of the top asset management companies in the country.
Fund Focus: Allan Gray Balanced Fund
Following the 1998 launch of the Allan Gray Equity Fund, the Allan Gray Balanced Fund was introduced to provide a broader-based investment product.
As the Equity Fund is dedicated to equity investments, its ongoing returns are often dependent upon the level of the overall stockmarket. The Balanced Fund however has a wider selection of assets available to it, namely shares, listed property, interest bearing securities and international assets. As a result its returns can be expected to be more stable than those of the Equity Fund. Importantly, the risk of monetary loss is lower.
Investment Objective
To earn a higher rate of return than the market value-weighted average of the Domestic Prudential Unit Trust Sector excluding the Allan Gray Balanced Fund, without assuming any greater risk of monetary loss.
Investment Approach
The philosophy of the Investment Manager is firmly rooted in the concept of fundamental value. An investment is considered attractive when its price is well below the Manager's assessment of its intrinsic value. Intrinsic value is defined as the price an astute businessman would pay for a business. The search therefore is for the most attractive investments, subject only to diversification of risk and to the Prudential Investment Guidelines.
Consistent with this long-term approach, investments are often found to be attractive when they have been 'sold off' by the investment community at large and are subject to intense pessimism as this is when their pricing is most attractive. On the other hand particular caution is exercised when investments have become overly popular and are being bought with little regard to their intrinsic value.
It follows that the Fund's portfolio will tend to be significantly different to the benchmark. For example, if the share market in general is very highly priced there will be fewer attractive opportunities to be found amongst shares, and the Fund will tend to have a lower exposure to this category and vice versa. Alternatively, if listed property is out of favour it will offer greater scope for investment, and the Fund will tend to have a relatively high exposure to this asset class. Further, if asset classes in general offer poor returns relative to cash, the Fund's portfolio could favour the latter category, which inherently has the lowest monetary risk.
Another characteristic of buying out of favour investments and selling those that are overly popular is that the Fund's portfolio tends to produce a higher running yield than that of its benchmark. Importantly, the risk of monetary loss is also demonstrably lower with a 'buy low and sell high' strategy.
Don't aim for success if you want it; just do what you love and believe in, and it will come naturally.
- David Frost (1939 - )
