Welcome to Matters of Mind (MM)
August 2024 First Edition
“The world needs amazing leaders, and unfortunately, there are not enough of those. It would be a major victory to find that more leaders are touched by this book who are now conscious of the importance of investing in themselves so that they can then lead others.” Dana Maor co-author of the book Journey of Leadership launching 10 September 2024.
Read or listen to the interview with the authors of Journey of Leadership (About YOU section) encouraging leaders to be human centric, self-reflect, give themselves time and change their habits incrementally. However, this book is not only for leaders but for anyone who wants to lead meaningfully.
The advancement of technology and what that means for society is a theme in this edition. In addition the macro-economic impact of the two-pot system is explored and we bring you recent industry news.
Pass the MM newsletter on to others and enjoy!
MM Editorial Team
Economic Matters
How the two-pot system may impact household income and inflation
Retirement fund withdrawals could boost household’s disposable income this year and in 2025, but they may also contribute to higher inflation, resulting in repo rate hikes, according to research published by the South African Reserve Bank (SARB) this month.
This is “must read” which illustrates two potential scenarios, no pun intended. 10 min read.
If you would like more detail read the SARB research paper: Likely near-term macroeconomic impact of the implementation of the two-pot retirement saving system
South Africa has a huge gap between the rich and poor – 4 urgent reasons to tackle inequality
While South Africa is somewhat exceptional, income inequality within countries has been growing across the world.
3min read
283 | Daron Acemoglu on Technology, Inequality, and Power
Daron Acemoglu, is a political economist who has long thought about the relationship between economics and political institutions. In his most recent book (with Simon Johnson), Power and Progress: Our Thousand-Year Struggle Over Technology and Prosperity, he looks at how technological innovations affect the economic lives of ordinary people.
This is an interesting interview reminding us that technology is disruptive and can exacerbate poverty and inequality despite advancing society broadly. One hour’s listening.
Financial Services Industry
Podcast: SA fighting a losing battle against financial crime
In this compelling episode of Money Markets and Masterminds, we delve into the complexities of white-collar crime in South Africa. Particularly, its profound economic impacts, the ongoing struggle to restore investor confidence, and the urgent need for a multifaceted approach to address crimes.
19:32 min podcast
Sygnia wins appeal over advert’s claims about RA fees
Sygnia Asset Management’s advertisement claiming that investors could be losing up to 60% of their retirement savings to fees is not misleading, the Advertising Regulatory Board’s appeals committee has ruled.
An enlightening and entertaining 4min read.
Diversity and Inclusion
Sanlam Foundation empowers women entrepreneurs with funding boost
Women face significant barriers in the realm of entrepreneurship, including access to finance, networking opportunities, societal norms, and mentorship.
A boost to budding women entrepreneurs. 2min read
Mukuru’s efforts to drive financial inclusion are a vital step in journey to gender parity
African fintech platform, Mukuru is at the forefront of driving financial inclusion and economic inclusivity among African women, while itself enjoying 56% female representation across its entire business that spans multiple countries, with 28% of its technology team, which is led by a woman, comprising female staff.
Encouraging 3min read.
#WomensMonth: Candice Stevens – where finance meets passion for conservation
With her BCom and LLB (specialising in tax) from Stellenbosch University, Stevens embarked on a journey to marry the legal, finance and tax sectors with environmental sustainability – and so, in 2019, the Sustainable Finance Coalition was born.
Inspiring 3.5min read.
Life Insurance
This is where SA’s 63-million inhabitants live
SA’s population has surpassed the 63-million mark, and life expectancy in the country has improved significantly to 66.5 years, according to figures released by Stats SA.
An industry relevant 2min read.
Evolved life cover products stand out in a staid market
The Covid-19 pandemic highlighted the need for the life insurance industry to change. It pushed us to expand our services to better meet our clients’ needs by adapting to societal changes and finding ways to cover more risks and provide more value to our clients through tailored solutions.
Read about how small changes in products can make a huge difference to loved ones. 2.5min read
General Insurance
Insurer flags AI as an increasing risk
Despite the innumerable opportunities and efficiencies that AI is introducing to business, it is expected to have a medium to high impact on the risk landscape soon.
This is according to Nikita Naicker, PI tech and cyber underwriter at insurer SHA Risk Specialists in a company release. SHA is a division of Santam. 3min read
African university explores data-driven smart farming
The future of farming may lie in the effective fusion of data science and agricultural practices, potentially ushering in an era of smarter, more efficient, and sustainable agriculture.
An informative article with examples of how smart farming is being conducted and researched. These practices will in time feed into the underwriting of insuring crops. 5min read
Technology’s Grip on Modern Life Pushing Us Down a Path of Digital Land Mines
The worldwide technology meltdown caused by a flawed update installed 19 July 2024 on computers running on Microsoft’s dominant Windows software by cybersecurity specialist CrowdStrike was so serious that some affected businesses such as Delta Air Lines were still recovering from it days later.
Experts weigh in on how fragile the world has become in parallel with technological advancements. 3min read.
RAF dealt a heavy blow in R4.9m claim
The Road Accident Fund (RAF) has been ordered to pay a Lavender Hill teenager nearly R5 million for severe injuries he sustained in a bicycle accident about seven years ago.
Read the manner in which this amount was calculated. 2.5min read
High court puts brakes on R11m RAF claim – cuts it down to R800,000
Although this is a victory for the fund, which says it is beset with inflated claims, it still faces an uphill battle. Another three cases heard in the Limpopo High Court in July alone saw the RAF ordered to pay a total of R9.65-million to claimants.
3min read
Health Insurance
Now medical professionals say they will not sign Ramaphosa’s health compact
Health professionals in their thousands will not sign the president’s health compact, adding impetus to the flurry of objections that are reducing the credibility of the document.
2.5min read
KPMG to probe Sizwe Hosmed R162m claims gap
Sizwe Hosmed medical scheme has appointed KPMG to conduct an independent investigation into a massive R162m under provision for claims from Hosmed members when it merged with Sizwe in late 2021.
2min read
Regulator appeals for ‘reasonable’ medical aid hike
SA’s medical schemes regulator has appealed to the industry to limit 2025 contribution increases to the SA Reserve Bank (SARB’s) inflation forecast of 4.4% plus “reasonable estimates of benefit utilisation” so people can retain their cover, but financial experts believe this might be unrealistic.
3min read
Banking
Nedbank achieves 8% earnings growth amid economic turmoil
Nedbank’s strong H1 2024 performance, with headline earnings up 8% to R7.9bn, reflects tight cost control and robust digital growth amid challenging economic conditions.
3min read
Mobile money: Sub-Saharan Africa leads banking revolution with nearly half the world’s accounts
About 1.4-billion people worldwide do not have a bank account, according to GSM Association estimates. When people are excluded from formal financial services such as banks, the ability to be able to transact by using a mobile phone offer them a secure way to send money across borders, save and, in some cases, apply for micro-loans and insurance.
An illuminating article and one which also distinguishes mobile money from mobile banking. 3min read
Investments
A behavioural finance lens on the question: Are women really better investors?
Barber and Odean, published a paper in 2001 entitled Boys will be boys that ruffled a few feathers.
Not only did they find a statistically significant difference in favour of women, but they also found that men had better investment performance in the mere presence of women. However, single men under-performed significantly more. It doesn’t stop there.
Entertaining and illuminating 2.5min read.
Foord’s Nancy Hossack explains why SA is a harbour in current global market storm
With stock markets tanking around the world, including a 12% plunge in Japan yesterday (5 August), things are relatively calm on the Johannesburg Stock Exchange. At times like these, a house like Foord Asset Management is a go-to source, given its top priority is “don’t lose money”. Portfolio manager Nancy Hossack explains how the firm protected its clients from the wealth wipeout sweeping the globe.
22min interview recorded live 6 August with an edited transcript which can be read in 4min.
Analysis: South Africa is net exporter of FDI
Research firm Codera Analytics believes that the country’s positive net international investment position isn’t all bad news.
This article unpacks the nuances of foreign direct investment (FDI) and how important context is to each financial headline. 3min read
Government seems to back away from prescribed assets
A pronouncement this week by the Deputy Minister of Finance seems to indicate that the government is backing away from plans to introduce prescribed assets for retirement funds.
3min read
Retirement / Pensions
South Africa is changing its retirement rules to help boost country savings: how it will work
For many the two-pot system is just about retirement, but it is also about saving. This article highlights and compares the SA features with other countries who have set up similar structures. A worthwhile 5min read.
Members of R26bn pension fund are concerned about its ‘liquidity problems’
One hundred thirteen members of the R26bn Municipal Employees Pension Fund (MEPF) have expressed grave concerns about the fund’s alleged ‘lack of governance, transparency, and accountability’, as well as its ‘liquidity problems’.
3min read
About YOU
The Turing Test and our shifting conceptions of intelligence
I believe that you will value this piece of writing as it takes us into the last century when computers were just beginning to develop in ways that led Turing to question what intelligence we would ascribe to them. It then moves on to the question of what is regarded as intelligence now and whether AI, GenAI and the latest Chat GPT4 have surpassed the iconic Turing test.
What do you think intelligence is? Do you think “intelligence” is worth more than deriving meaning from what you do?
10min read
The Journey of Leadership
A transformational approach to leadership
This is an interview with the authors of the book The Journey of Leadership and they emphasize human-centric leadership. They are not striving for a best seller but habits that leaders will embrace to bring about change in themselves and in turn leadership across the world. In a subtle way they are saying that there is a dearth of good leadership globally but this can change, if habits change.
An important read or watch for anyone in leadership or aspiring to be a leader. 23min interview or 15 min read.