Sanlam Investments

Following the SARB’s decision to keep interest rates unchanged, our economist Patrick Buthelezi joined eNCA to unpack the key risks shaping South Africa’s economic outlook: - Like the US Fed, the SARB’s MPC remains cautious amid unusually high policy uncertainty. - US tariffs and a retaliatory response will likely put upward pressure on inflation, possibly forcing central banks to keep interest rates higher for longer – or even hike them. As a small open economy, SA could be affected by a weaker exchange rate, which may raise inflation and prompt the SARB to tighten monetary policy. - There is also uncertainty around the implications of reciprocal tariffs planned by the US for 2 April 2025. - Additionally, the risk of SA losing preferential access to the US market through AGOA status could negatively impact exports and growth, adding negative sentiment; the currency could weaken sharply, leading to high inflation and tight policy. - SA’s growth forecast is expected to be moderate at 1.7%, and reaching 3% would prove challenging in the short to medium term. The GNU needs to accelerate the implementation of structural reforms to boost potential growth. Watch the full discussion below. #Economy #Interestrates #MPC #Economicgrowth

The MPC at the South African Reserve Bank held the repo rate steady at 7.50% at the conclusion of its two-day monetary policy meeting, opting for a wait-and-see approach. ? ???Key takeaways from our economist, Patrick Buthelezi: ? The committee was split, with four members preferring a pause and two voting for a cut. This is despite the inflation outlook being revised slightly lower to 3.6% in 2025 and 4.5% in 2026. Additionally, economic growth was revised marginally lower to 1.7% in 2025 and maintained at 1.8% in 2026 and 2.0% in 2027.?Concerns persist that escalating trade wars could drive inflation higher, potentially keeping interest rates higher for longer or even leading to further hikes. ? The South African Reserve Bank conducted several scenarios examining the impact of a weaker United States economy, a lower dollar, and higher commodity prices, primarily gold. They found that inflation would be lower due to a potential firmer exchange rate, and ultimately, the policy rate may be reduced.?Another scenario examined the potential loss of preferential access to the United States market under AGOA. This could lead to a depreciation in the exchange rate and exert upward pressure on inflation and policy rate. ? Policymakers generally adopt a cautious approach in times of heightened uncertainty, as we observed with the latest FOMC decision. On current forecasts, which are not dissimilar to the South African Reserve Bank, there is still room for a cut. Also, the SARB Quarterly Projection Model (QPM) forecasts?one more cut by the end of 2025. However, we are nearing the end of the easing cycle. Given the high level of uncertainty, the SARB will be guided more by data.?? ? #SARB #MonetaryPolicy #InterestRates #EconomicGrowth #Inflation #SouthAfrica

The South African Reserve Bank's Monetary Policy Committee (MPC) is likely to keep the repo rate unchanged at 7.50%, adopting a cautious wait-and-see approach amid global economic uncertainties, says our economist, Patrick Buthelezi. “There are concerns that escalating trade wars could drive inflation higher, potentially keeping interest rates higher for longer – or even leading to renewed hikes. Further uncertainty around the South African Budget 2.0 remains, given the Government of National Unity (GNU) party’s stance against tax increases. Policymakers tend to be cautious in times of heightened uncertainty,” says Buthelezi. “With many moving factors, the timing for an interest rate cut remains highly uncertain. Policymakers are closely monitoring the situation to make informed decisions,” he adds. #SARB #MonetaryPolicy #InterestRates #EconomicGrowth #Inflation #SouthAfrica

2025 National Budget analysis “South African Finance Minister Enoch Godongwana tabled a fair Budget, considering the resources available and current fiscal pressures government is faced with,” says our economist, Patrick Buthelezi of the rescheduled National Budget delivered in parliament today. “The next step is a joint committee sitting scheduled for Friday.?The budget document needs to be passed or rejected by parliament 16 days after the tabling of the Budget. Several political parties, including the Democratic Alliance, have expressed dissatisfaction with what we believe are modest VAT increases, raising concerns that the budget may face opposition.” He adds: “While we believe that the execution risk is high – due to factors including the volume of social grants funded by government and minimal leeway for emergency disaster funding – the National Treasury tried to absorb persistent expenditure pressures while supporting medium-term growth through infrastructure.” “It is positive to note that the National Treasury is sticking to fiscal consolidation. The primary budget surplus in the main budget increases from 0.5% of GDP in 2024/25 to 2.0% of GDP by 2027/28. Consequently, the gross government debt stabilises at 76.2% of GDP in the current fiscal year and decline steadily in the outer years. Also, debt service cost peaks at 21.5% of revenue in the current fiscal year and decreases gradually,” says Buthelezi. Key Highlights: ? Economic outlook: the economy is expected to average about 1.8% in the next three years ? VAT increase: the VAT rate will rise by 0.5 percentage points in both 2025/26 and 2026/27. However, the second-year increase may be reviewed if additional revenue is raised through other measures. ? Support for households: more food items will be zero-rated, and there will be no increase in the fuel levy. ? Tax brackets and rebates: no adjustments will be made this year. ? Consolidate budget deficit: Expected to narrow to 3.5% of GDP by 2027/8 from 5% in 2024/5. ? Government debt: forecast to stabilise at 76.2% of GDP in 2025/6, with debt service costs peaking during the same fiscal year. Debt servicing costs absorb 22c for every R1 of revenue, exceeding spending on health, basic education, or policing. ? Eskom assistance: reduced to R50 billion over the next two years from the originally budgeted R70 billion, as Eskom's financial position improves. ? Infrastructure spending: R1 trillion will be invested in transport, logistics, energy, water, and sanitation over the next three years. ? Public-Private partnerships: new regulations will be in place by 1 June 2025 to reduce complexity, with a credit guarantee vehicle launching in 2026 to mobilise private capital. ? Social grants: increases include R130 for old age and disability grants (to R2,315), R30 for the child support grant (to R560/month), and R70 for the foster care grant. The Social Relief of Distress Grant will be extended until March 2026.

Our Chief Economist, ARTHUR KAMP shares pre-Budget commentary ahead of tomorrow’s announcement. Despite its detractors, “the Treasury is likely to stick with the broad principles underpinning it’s initial, now defunct, Budget,” says Kamp. He believes that, faced with increased expenditure demands, modest economic growth and high debt servicing costs, the Treasury’s initial budget did aim to return the country’s fiscal position to sustainability. “We expect the Treasury to continue focusing on containing debt issuance, while seeking permanent funding sources for new spending. Despite the challenges, the Treasury remains focused on building a sound fiscal track record and supporting economic growth,” says Kamp. Read the full article https://bit.ly/3DtbJ79 or listen to the voice note.

With Budget 2.0 hot on our heels, Chief Economist ARTHUR KAMP shares his expectations… and why a VAT adjustment is a measured move from the National Treasury. Share your thoughts and expectations ahead of the revised National Budget Speech on 12 March 2025. #Economics #InvestWithConfidence #Budget2025 ?

Head of Absolute Return and Portfolio Manager in our Active Management business, Fernando Durrell , is featured in the BusinessDay, discussing the potential impact of tariffs under a second Donald Trump administration, the outlook for equities and other key global market trends. He highlights fixed-income assets for stability, cautions about recession risks for equities and identifies strong risk-adjusted opportunities in South African cash and bonds. Read full article here: https://lnkd.in/dzmEtTAr #SanlamInvestments #ActiveManagement #Investments #Globalmarkets

???Sanlam Investments Wins at the News24 FundHub Awards!??? We’re proud to announce that our?SIM Bond Fund, managed by James Turp?came first in the?5-year-performance?South African Interest-Bearing – Variable Term category in the awards ceremony held last night in Cape Town. The win showcases our commitment to long-term, consistent returns for our investors. Managed for over a decade by James, who is Portfolio Manager and Head of Investment Strategy in our Active Management business, the SIM Bond Fund?also took second place?in the?Variable Term?3-year performance?category – further reinforcing the strength of our fixed income expertise. Congratulations to James! ? Thank you to our clients and partners for your continued trust in us. Here’s to more investment excellence ahead! – With Carl Roothman and Natasha Narsingh Disclaimer:?Sanlam Investments consists of authorised financial services providers in terms of FAIS and disclaimers can be viewed on?www.sanlaminvestments.com

Sanlam Investments Starts 2025 on a High Note with Industry Recognition We’re starting 2025 with strong momentum, earning multiple award nominations across key industry platforms. These accolades reaffirm our commitment to sustainable growth, investment excellence, and innovation in indexation, alternative, and multi-manager strategies. ?? Industry Recognition ·???????Profile Unit Trust Awards: Our Sanlam Investment Management Inflation-Linked Income Fund won Best Fund over 5-years: Risk-Adjusted Performance and The Amplify SCI Property Equity Fund won Best Fund Over 5 Years: Risk-Adjusted Performance (in partnership with Business Day). ·???????Raging Bull Awards: Nominations for the Absa Sanlam Multi Managed Passive Accumulation Fund, Sanlam Investments Management Bond Fund, and Sanlam Investments Management Small Cap Fund. ·???????FundHub Industry Performance Awards: 13 nominations across asset classes, recognising our funds’ strength in South African and global markets. We are focused on strategic growth & innovation: ? Strengthening partnerships, including our collaboration with Ninety One, to enhance international capabilities. ? Expanding indexation, multi-manager, and alternative investment offerings. ? Scaling private debt and private equity strategies, with a focus on African economic development and emerging market opportunities in India. ? Driving sustainability initiatives in marine rehabilitation, the blue economy, and climate-focused investments. “As we move forward, our focus remains on consolidation, growth, and advancing key initiatives that will shape the future of our business. The recognition we’ve received is a testament to our dedication to delivering long-term value through responsible investments and high-performing solutions,” says our CEO Carl Roothman. A big thank you to our investment teams and partners for making this success possible! Here’s to another year of excellence. - With James Turp and Fayyaz Mottiar, CFA. #SanlamInvestments #InvestmentExcellence #SustainableGrowth #PrivateMarkets?#AlternativeInvestments #Indexation #MultiManager #ImpactInvesting

?? Look out for the climate potholes and risks ?? We understand the risks of investing in a world impacted by climate change. That's why we're actively mitigating those risks and allocating capital in a way that thinks about sustainability for today and the future. Explore the report and learn how we're making a difference. ?? https://bit.ly/3CAMkb0 #ResponsibleInvesting #Sustainability #ClimateChange Mandilakhe Daba Ockert Doyer, CFA, FRM