It seems to be standard practice that at the end of every year, financially savvy investment guru’s give us their take on what they think the investment landscape for the following year will yield.  Predicting the future direction of financial markets is fraught with left and right turns. This year is no different, and even though nobody has a crystal ball, based on what 2019 has yielded to date, Daniel Kibel, Founder of CM Trading, gives us his take on what he thinks 2020 will look like.

Looking abroad, massive events have been dominating the global investment landscape for the last few years. These events are going to substantially change the way investors approach investment. The election of Boris Johnson has cemented the fact that Brexit is definitely going to happen. What is important to consider now, is how this will fundamentally change your investment journey over 2020. The second important global event is the 2020 Presidential elections, and amidst impeachment woes, whether Trump will still be a key player? Both of these international events are sure keep the markets interesting, to say the least, for 2020. Closer to home, investors must keep in mind the Eskom issues, SAA and the future of the South African president Cyril Ramaphosa.

Moving away from the news making events that will dominate 2020, an aging worldwide population coupled with the rise of a middle class in emerging markets leads me to believe there will be a shift in consumer habits and tastes over the next 10 years. As things go generally, aged investors are more sensible, more investment savvy and they usually have more money to invest. With pension plans around the world falling short of the lifetime expectations of those who have paid them their entire lives, investors will need to be much wiser in their choices. Both locally and globally, people must ensure that they have a long-term plan for their financial stability in retirement.

Consumers are increasingly focused on the many and broad implications of what is happening in terms of sustainability. A massive shift has taken place towards meat alternatives specifically, and the investment opportunities in companies that offer these alternatives is huge. The investment stalwarts such as Coca Cola, Disney, Amazon etc. will remain solid, but an influx of new companies have raised massive awareness and people are always comfortable to invest in something that is creating ripples. Alternative energy and alternative meat sources are definitely creating ripples, so they will definitely be top of mind for new investment opportunities.

Within our borders, according to the Where to Invest in Africa 2020 report, South Africa has fallen to third place. It’s no secret that South Africa is facing a problem.  The currency is unstable and the problems faced by the leadership is not inspiring investor confidence. The impact this has had is a complete lack of funds in the country. There are many more attractive African markets that are available to investors, which has an effect on the dollar rand which rolls over to the economy, making imports a lot more expensive, in turn making life more expensive. Investment players must keep this top of mind and South African investors should be certainly be following global trends when making their 2020 investment decisions. You cannot invest if you’re not aware of and following global trends. Fact. Global trends lead the world, but South Africa is part of world. The world is a very small place these days and one thing we can all bank on is the fact that if something makes waves in England, for example, the waves will be felt in South Africa. As an investor you can’t ignore the rest of the world, especially when playing in a market as small as South Africa’s.

In terms of investment trends in 2020, I don’t see many changes on the horizon. Investors will still be interested in trading gold, trading Euro Dollar, oil, the NASDAQ etc. I do think people will still be leaning towards South African stocks, but I also think there is a growing degree of wariness. People who have traditionally invested in SA stocks are holding on and waiting to see what’s happening internationally. The interest in bitcoin and other digital currencies has definitely gone down a lot and people seem to be moving away from them.

When it comes to the South African economy, we are going to have to focus heavily on that before we can even consider investing abroad. Even if there is a huge upturn in the world’s economy, we are a long way behind. The problems with Eskom are case in point. I would suggest that SA investors should absolutely be looking for global investment opportunities. The SA market is simply not stable enough and there are so many unknowns, it would be a complete miss for investors to only keep things local.

It’s not all doom and gloom though, a huge positive is that the SA investor is a lot more aware than they were five years ago. They are a lot savvier in global markets and that is certainly going to continue. The final thing I can say to anyone wanting to invest is ‘don’t shut your eyes’. Keep them open as to what is happening not only in SA’s economy but also keep a firm eye on what’s happening around the world. What is creating opportunity for investors? Certainly Brexit; maybe look at trading against the pound. Watch the relationship between America and China; that’s going to have a huge effect on the dollar. Just carry on learning because you literally have a smorgasbord of information right at your fingertips.

When stock markets plummet and the word recession starts to be bandied about, it’s only natural to start questioning your financial options. Add to this uncertainty the very unpredictable job market, and one can be left feeling like the only option is to stuff what savings you have right under the nearest mattress. But is this really the best bet when it comes to managing your money? Yes, you might know exactly where it is and exactly how much of it there is, but just like a seed that never sees the daylight, the chance of your money ever growing is pretty much zero. So, how do we go about not only protecting, but growing our very fragile wealth portfolios?

Firstly, it’s very important to remember one simple truth – every single day that your money sits in the bank, is a day that it’s actually costing you money. “Your funds will give you absolutely no returns sitting tucked away in your bank account, in fact, it’s safe to say that you’re losing money with each day that passes,” Says Daniel Kibel, Director of CM Trading, an award-winning online trading company with a reputation for their out-of-the-box approach to investment opportunities. So, whatever direction you decide to take, it’s really better than the one your money is headed in right now. Instead of letting your money slowly but surely deplete in a bank account, why not consider investing it, because although it might be risky, it could potentially be the beginning of big things for your cash flow.

You may feel that you don’t have enough funds to make a substantial investment, but this shouldn’t be something that stops you says Kibel. “Although you may only have a small amount to invest, take some time, do some research and decide on your own personal level of risk. No amount is too big or too small, the important thing is to make sure you’re armed with adequate knowledge about what you’re investing in.”

Investing is not to be taken lightly and is often fraught with pitfalls for both professionals and part time novices. Mistakes are sometimes made, but if you are careful, and learn from them as you go, you will become better equipped for success each step of the way moving forward. The one thing that we all can agree on is that nobody has all the answers. There will always be an unexpected turn of events. From government policies, to political unrest, to war, famine, even political changes across the ocean; the only certainty is uncertainty. So why do we even try and predict the future? We can’t, but we can take responsibility for our own financial future and learn how to trade and invest our own money.

It’s really important to seek independence when it comes to managing our own wealth. Stockbrokers always predict that stocks will go up… bond brokers predict rising bonds… property experts forecast fantastic property increases, but their advice is certainly not impartial, so now is the time to start your own investment journey, to be in charge of your own money. Be wary of what people around you are saying, especially if they start telling you how much money they made in a specific fund. Just like the Vegas high rollers, people often only brag about their wins, but remember, if a “quick fix” investment sounds too good to be true then that’s exactly what it is – too good to be true.  Your financial plan is your investment blueprint that should be constructed in such a way that you’re comfortable with its strength during difficult market cycles, which are completely normal, with the agility to tap into opportunities when they present themselves.

Kibel offers two tips for potential investors. Firstly, concentrate on what you know and understand. Whether it be trading the dollar against the rand or dabbling in gold, for example, go for something that interests you. Secondly, and this is especially pertinent for those new to investing, it may be a good idea to adopt a “copycat” approach. This is the ability to copy traders from all over the world. Choose to research their trading history and follow their patterns. Many online trading companies, CM Trading being one of them, offer copycat programmes as part of their service, which could offer the perfect way for you to get your foot in the door.

Knowledge truly is power, and when it comes to investing, the power is ultimately in your knowledge. It really doesn’t matter how you do it; whether it’s investment in stocks, bonds, options or real estate. Maybe a small business or a selection of assets – the objective is always the same, to make an investment that will grow your financial nest egg. Take hold of the steering wheel firmly and drive the future you dream of, by learning, researching and taking advantage of every tool available out there that allows you to master your money. It’s an old, but extremely relevant adage that you must gain control over your money, or the lack of it will forever control you.

It’s staggering to think that forecasters have predicted that by 2025 the global cannabis industry is expected to reach $146 billion, with the total market value of the South African cannabis industry raking in about $1.8 billion. These are the numbers being lobbied around and South Africa’s forward-thinking stance towards the 5-pointed leaf sets it up nicely to become a major player in the international market.

Since its legalisation at the end of 2018, the cannabis industry has proven to be an emerging market, giving South Africa the opportunity to run with the big dogs in this exciting new growth sector. Tito Mboweni even went so far as to say that policy changes in the industry can very well result in a potential source of revenue for SA in his Budget Speech.

With Statistics SA recently revealing that unemployment is not on the decline, it certainly is an opportune time to unlock the economic benefits, as well as the resulting job creation opportunities, that this industry presents. According to the New Frontier Data report the annual cannabis consumption rate in Africa is 11.4% while the global average is only 6% which bodes well for one of their Sustainable Development Goals which is to “promote sustained, inclusive and sustainable economic growth, full and productive employment and decent work for all”. The cannabis industry has the potential to create work opportunities for both low-skilled and high-skilled workers, it said, due to the fact that cannabis businesses will require management staff, administrative staff, manufacturing staff, agricultural operations and retail operations. In the United States, 321 744 jobs were created in the cannabis industry; and 35% were in retail operations.

So, with all the above in mind, the question at the forefront of every investors mind is whether or not to invest in the South African cannabis industry?

The collective word on the street is yes. If you’re looking to invest on the ground floor of one of the potentially largest markets globally, now’s the perfect time. Many companies are jumping on the cannabis bandwagon, one of which is CanbiGold, a South African holding company that has invested into several companies across the cannabis value chain and is offering early stage investors preferential share blocks at R500 000 per block. These are convertible at a 3 to 1 ratio once CanbiGold is listed. In Canada the listed cannabis sector has a market capitalisation of more than R500 billion. CanbiGold hopes to list on the Canadian Stock Exchange in the next 18 months to two years and possible a secondary listing on the ZAR X, a South African stock exchange. This is only one example of the investment opportunities that are budding across the sector.

Be wary of getting caught high and dry

As exciting as this whole new world of cannabis investment is, it’s important to not get caught up in the hype and invest without thinking. Right now, the buyers of cannabis shares are mesmerised by the potentially bright future that the landscape presents. Up until now, there hasn’t been any public cannabis related listing on the Johannesburg Stock Exchange (JSE), yet. But that is set to change any day now. One of the biggest companies on the JSE by market capitalisation, Anheuser Busch is invested in the marijuana industry, and just like alcohol, the odds are that cannabis will sell, sending shares skyrocketing. But we do believe in the old adage of what goes up must come down, so maybe it might be pertinent to keep an eye on the market and see what happens as the legislation around the product changes. After all, you wouldn’t want to see your investment going up in smoke, would you? 

OPINION PIECE FROM CM TRADINGCONTRIBUTOR: DANIEL KIBEL, FOUNDER AND DIRECTOR CM TRADING

Sources

• http://www.capetalk.co.za/articles/338910/how-dagga-could-become-a-cash-cow-for-south-africa-s-economy
• https://www.dailymaverick.co.za/article/2019-05-24-cannabis-can-create-jobs-and-grow-the-economy-new-report-argues/
• https://www.bizcommunity.com/Article/196/547/192479.html
• https://www.thesouthafrican.com/news/cannabis-industry-welcomed-with-open-arms-by-city-of-cape-town/
• https://businesstech.co.za/news/business/323689/south-africa-is-on-the-cusp-of-its-own-booming-and-legal-cannabis-industry/
• https://www.businessinsider.co.za/prohibition-partners-report-on-cannabis-in-africa-raises-irrigation-and-hydroponics-concerns-2019-3
• https://www.iol.co.za/business-report/economy/a-considered-approach-to-cannabis-investment-26708473

The South African political situation has stabilised since President Ramaphosa took over in February 2018, according to Leon Isaacson, Managing Director of Global Migration Group (South Africa).  

The company has successfully, for the last twelve years, been providing professional Immigration services to companies and people who wish to locate to South Africa for investment, work, retirement, study and other purposes. ” While the country has many challenges, both political and economic, there is an underlying determination in the South African culture to make things work and uplift peoples’ lives from a socio-economic perspective. We have had a steady stream of international companies investing in South Africa in a range of industries. South Africa offers good local business opportunities and well as opportunities in Africa, due to its location and ease of travel to other destinations,” says Isaacson. 

Investors who wish to start up a new business or buy into an existing business will have to prove that they have, after one year, invested an amount of five million ZAR and created jobs for South Africans.  There are designated investment areas which are considered to be in the National Interest. In certain cases incentives, financing and other support may be available once the initial investment has been made.

These areas are:  

• Agro-processing;Business process outsourcing and IT enabled services;
• Capital/Transport equipment, metals and electrical machinery apparatus;
• Electro Technical;Textile, clothing and leather;
• Consumer goods;Boatbuilding;
• Pulp, paper and furniture;Automotive and Components;
• Green economy industries;
• Advanced Manufacturing;Tourism infrastructure;
• Chemicals, plastic fabrication and pharmaceuticals;
• Creative and Design Industry;
• Oil and Gas;
• Mineral beneficiation;
• Infrastructure Development;
• Information and Communication Technology (ICT). 

Retirement: For retirement purposes, the main applicant must show proof of long term income (pension, savings other funds and assets) or have a net worth of R12m (ZAR) in order to support themselves and their family members.  

Work Visa- Critical Skills: Like many other countries, South Africa has a shortage of skills in specific areas and seeks to allow foreigners to have a work visa and apply for Permanent Residence in order for them to stay in the country on a long-term basis in order to grow the economy. The skills required are divided into 12 areas of qualification (educational background) which may qualify a person for a Critical Skills visa: 

• Agriculture, Agricultural Operations, and Related Sciences;
• Architecture and the Built Environment;
• Business, Economics, and Management Studies;
• Information Communication and Technology;
• Engineering;
• Health Professions and Related Clinical Sciences;
• Life and Earth Sciences;
• Professionals and Associate Professionals;
• Trades;
• Business Process Outsourcing(BPO);
• Academics and ResearchersPost-Graduate (PHD obtained locally or abroad).

Global Migration Group can assist with all of the visa, business registration and implementation services through our highly skilled staff and partners in all the major disciplines.

Please contact us at This email address is being protected from spambots. You need JavaScript enabled to view it. website www.globalimsa.com