Absa’s Christine Wu on sustainable finance in Africa at Davos and Eskom explains solar household registration and connection fees.

Episode Transcript
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Speaker 1 (00:01):
And now The Money Show with Stephen Scridits on seven
oh two net's walk Little.

Speaker 2 (00:07):
The Money Show with Stephen Curtis is brought to you
by ABS of Corporate and Investment Banking, a Pan African
bank that's invested in your story because your story matters.
Good evening, Welcome to the program. Eight minutes after six
times Stephen and Curtis. A but of corporate news out
today are both from Clicks, a late update from True
Earth's as well, both perhaps slightly disappointing as it happens,

(00:27):
and updates too from Sasol. They had a Aurora of
a day, a very strong update from them, and that
did have a big impact on their share price, but
proof I think that things are sort of getting back
to normal in terms of the final end of the
holiday period. We should start to get some more figures
next week as well from other retail groups and just
getting understanding of how the fist of season went for them.

(00:49):
Lots of talk still around Davos and all the conversations
that have been happening there. We've seen the taco trade,
Trump Boys chickens out today as US markets continue their
recovery because Trump said yesterday he would not use force
to take Greenland. Of course, we're always back to the
same question with him, which is how much can we
trust him? Well, we'll talk a bit more about that

(01:10):
and go to Davos. We'll speak to Christine Wu, the
interim Chief Executive for Personal and Private Banking at ABSA.
Are particularly interested for me in whether or not they're
still getting as much interest in a funding and projects
for green renewable energy. I think that's going to be
quite interesting because you know, the Trump administration going very
much the other way. Netbank's announcement late yesterday that they're

(01:34):
going to spend around fourteen billion Rand buying a controlling
stake in Kenya's NCBA group. It's a banking group, just
understanding of how there are opportunities there. Cocky Kyman, as
you know, is a banking expert and looking forward to
that conversation. One of the big stories that's rarely sort
of exercising the middle classes at the moment is around
ESKAM and solar installations, and I think they are two things.

(01:58):
The one is why should you register your own electricity
generation with ESKIM. You kind of got it because ESKAM
haven't been able to get it for you, and then
the second one. And I think this is going to
be a big issue. I wouldn't be surprised if this
court action on it is whether ESKIM and councils can
force you to go on to post paid if you're
currently on prepaid. My argument would go like this. For years,

(02:20):
ESKIM has been saying, we want to make sure people
pay to do that, We're forcing large areas onto pre paid.
You pay before you use it, like you do for
most things, and as a result, we get a more
accurate billing structure. Now they're saying if you're on solo,
you must go post paid. Now. I live in a
city of Joeburg area for electricity, and like many people,

(02:41):
I'm a veteran of wondering scratching my head, how on
earth do they come to that electricity bill. I eventually
ended up on prepaid. I do have a solar installation,
and I'm very happy to do things that way. I
must just make this point. I don't mind going on
prepaid and paying a network fee. I don't mind staying
on prepaid and helping provide and subsidize other people in

(03:05):
the city with electricity. I'll see that. That's just the
way life is. That's what we do with our tax anyway.
I've made my peace with that many years ago. It's
the right thing to do anyway, I'm happy to do it.
I do mind having to put my financial health in
a system. And I'm talking not so much about Eskom,
but City Power now that has shown in the past
and not be able to conduct a billing system properly.

(03:26):
That I don't know if I would accept that. I
don't know if you would oh seven two seven oh
two one seven oh two. I'm looking for a case
to say that I'm wrong. Please, but if you agree
with me, I'd also like to know, are you happy
to go post paid because you have solar? Oh seven
two seven oh two one seven o two. And then
also what's happening with board members at the moment? An
interesting pole suggesting in fact, most CEOs don't turn to

(03:49):
the chair of the board for advice or help or
just to discuss issues. They actually go elsewhere. I thought
that was very interesting. Whole point of having a chair
of a board is often there the most person in
the room, the sort of chair of wisdom. If you like,
why wouldn't you go there. We'll speak to Andrew Woodburn
about that in the next little while as well. Good
to hear from you. O double one douba three oh

(04:11):
seven oh two two one four four six, five sixty seven.

Speaker 3 (04:15):
The Loly Show with Stephen krutis live on ninety two
point seven and one O six FM, streaming on the
Prime Media Plus.

Speaker 4 (04:23):
NAP and DStv channel eight five six.

Speaker 2 (04:26):
Well after the drama of yesterday's speech by the US
President Donald Trump at Davos confirmation today, South Africa will
be hosting a meeting of the World Economic Forum in
Cape Town next year, the Forum's Africa meetings resuming after
a break of about six years. At the same time,
our ministers and our business leaders still making the case
for investment in South Africa and in Africa. One of

(04:48):
them is Christine Wu. She's the interim Chief Executive for
Personal and Private Banking at Absent. She's on the line
now from Davos. Christine. Good evening and thanks for your time.
I know investors have their hands full with everything.

Speaker 5 (04:59):
At the moment.

Speaker 2 (05:00):
In the middle of all of that, has it been
possible to make a case for investing in Africa.

Speaker 6 (05:07):
Good evening, Steven thank you so much for having me
on the show. So, of course, I think the South
Africa delegation has put on a very very strong investment case.
But needless to say, we have strong competition. Every single
country is definitely all putting their best foot forward.

Speaker 2 (05:25):
I mean, I would imagine to try and punch through that,
to try and stand out can be quite difficult. And
yet if you're looking for a growth market, if you're
looking in population growth, Africa is the place.

Speaker 4 (05:36):
Definitely.

Speaker 6 (05:37):
I think what we are seeing is that with and
Mark Couni has said it quite well that the world
order has come to a rupture point. And typically in
these situations there are always new opportunities. And South Africa,
by the virtue of our geographic location, by the virtue
of our resources, and also the abundance of people capital,

(06:00):
certainly it is a destination not to be ignored.

Speaker 2 (06:04):
Donald Trump has been sort of making this claim, and
he made it that that was yesterday, that renewable energy
was a scam. Are you seeing an appetite for green
energy projects? I mean, you've been looking in that space,
so you still see an appetite for that, despite what
the Trump administration now says.

Speaker 6 (06:21):
I think we shouldn't over index on just some of
these pronouncements. I think across the board in order conversation,
most of the participants have voiced very strong support for
green energy. To give an example, the most important conversation
actually is around the AI disruption, and with AI there's
going to be a huge search in energy demand. And

(06:43):
across the board, what we are seeing is that different
countries are all articulating very ambitious plans in terms of
energy generation, but most of those are actually around sustainable sources.
So for example, in China, they are actually talking about
fast tracking the technology development in nuclear fusion.

Speaker 2 (07:11):
We seem to be losing Christine Wo there optimistic that
that line will come back. It seemed to happen quite unexpectedly.
Maybe it's an anti green backlash. I'm not sure an
anti green energy backlash. I should say, let's just see
if Christine Wu is still with us. Christine, you were
talking about green energy and how they're still interest in
sustainable energy.

Speaker 6 (07:33):
Absolutely, I don't know if my line is a.

Speaker 4 (07:38):
Better, but.

Speaker 2 (07:41):
Yeah, I think we're going to have to abandon that
for the moment. Let's say, if we're able to re
establish contact with Christine Wu, and able to just continue
that conversation. There are other questions, of course, around opportunities
in Africa. So much space in the fintech area. Over
the last little while, we've seen so much growth there
and everyone sort of talking about whether or not they're

(08:03):
able to make money in that sector. Do want to
ask Christine Wu about that. We'll try and come back
to that. Christine Wu's the interim chief executive for Personal
and Private Banking for Abscess. She's on the line there
from Davos. We've seen so many people making pronouncements at
Davos recently. I'm also very interested in how the World
Economic Forums Africa meetings are coming back. They went until

(08:24):
twenty nineteen. I went to one or two. I remember
covering for EWN and for this show as it happens
back in twenty seventeen we were in Durban. Then I
remember going to Rewonder for another one as well and
covering that in twenty sixteen. The thing about those meetings
IOIL has always found was that you kept bumping into
people from all over the continent and you could see

(08:46):
the deals being done literally in front of you. It
really was quite extraordinary. So I think having the World
Economic Forum Africa meetings back again is going to be
a very important moment and I look forward to having
them back in South Africa. The one next year will
be in Cape Tanna. Imagine they might go back to
Nigeria or perhaps even Rwanda, maybe not Rwanda in the

(09:08):
next little while. So good news there. I will try
and resume that conversation with Christine who at some point
seventeen minutes after six.

Speaker 4 (09:15):
Stephen is gone at at at Stephen.

Speaker 2 (09:20):
Confirmation late yesterday from Nedbank they're planning to spend around
fourteen billion round for a controlling stake in the Kenyan
Bank NCBA. It's a move into East Africa, I suppose
after they abandoned their previous investment in West Africa. Koki
Koiman is an expert on banking. Koki, good evening. Does
this make strategic sense for Nedbank to go into West Africa,

(09:43):
to go into a Kenya buy an operation that's already
a successful business.

Speaker 7 (09:49):
It actually does about position Nedbank finds itself in in
I mean, just to go back to twelve years, net
Bank was always very much a corporate bank and not
so much retail and there's a history to that as well.

(10:10):
But let's go back that far. And whilst Standard Bank
had been growing in Africa and building a massive Africa
franchise and Access started going that which as well, Netbank
did not have much in Africa except obviously in the Libia.
Botswana was in London, and so Netbank made the decision

(10:31):
to buy a group of a stake in a group
of African banks, Echo Bank. That's about twelve years ago.
And that investment never really worked out because either didn't
have control. They only had a twenty two or plus
percent of that investment, so didn't have enough control. And

(10:56):
finally at the beginning when last year under new management,
when Mike Brown had stepped stepped out, retired new CEO decided,
you know, let's sell that. And I think it was
a good decision. But long story, Nedbank now sits without

(11:16):
anything in Africa and with a large cash amount which
will be coming their way. And that's where they've started
doing some acquisitions to bolster where they aren't deficient. And
this one is the first step, or not to be
more steps. So there's quite a big step to get
an African presence. By the way, the question is why

(11:39):
are so so African banks all growing in Africa and
are dominant in Africa. It's because really South Africa itself,
the growth rate has been quite poor and the countries
north of our borders have all been growing at a
much faster rate than South Africa. So you actually going

(12:00):
into growth countries Kenya, Brundi, et cetera, et cetera. And
that's really what is driving the decision.

Speaker 2 (12:10):
I mean, obviously there are also many people here a
bank accounts. There might be more unbanked people in other places.
There's that. There's also the sort of fintech space and
in fact ned Bank brought into Ecorcord just a few
months ago. I mean, you have to be able to
compete in that space I would imagine in Africa to
make a banking acquisition.

Speaker 7 (12:29):
Work quite correct. So the ECUCO actually acquisition can help
them now on on two fronts. And I'm not sure
if when they bought in corcor they are already news
they're going to do this transaction. But Equacor helps them
on the on the less affluent so called the sector,

(12:52):
and it's and it's quite an entrepreneurial, very good tick.
I think it's a good acquisition. Again, it's full in
the laps the or the short short folder head on
that consumer space. And so exactly as I said, Cook
was also in Africa going into Africa, so at will

(13:13):
really help them. Although NBC so far what I hear
the technical ability is also fairly good that I'm sure
that you can learn from each other.

Speaker 2 (13:23):
And obviously cocky. I mean, it would make sense for
Netbank to buy an operation or to buy a big
share in an operation that's already established to grow organically.
It would take a very long time, much better to
do it in this way, even though it'll cost you
more money.

Speaker 7 (13:38):
Quite correct, So you'll share this giving patients as suppose.
Then you can see that on the valuation of ned
Bank it is the lowest on pee and the lowest
on price to net as a value of all the
South African banks because it basically just got South African
corporate growth that's got not the same as the other
banks were excluding first trend. Come back to that just now.

(14:01):
But so Salema specifically, I've got the higher growth in
Africa and that's the frustration. So for Netbank to start
doing that greenfield as it's called, you know, slowly, we'll
just take ten twelve years and about the way. Obviously
acquisitions bring with it a big risk. As a film

(14:22):
with a prettle, that was a purchase where they they
had a stake but not control. This time they have
learned they've got control as well, and I'm sure they've
done their homework and to make sure that that is
a good match of cultures of the two businesses.

Speaker 2 (14:39):
Cooky, thank you so much. Cocky Kuoman is an expert
on banking. Twenty two minutes after six.

Speaker 4 (14:44):
The Money Show with Stephen on seven O two seven two.

Speaker 2 (14:49):
Being able to reestablish contact now with Christine, the interim
Chief Executive for Personal and Private Banking at ABSSIES at
DeVos at the World Economic Forum meeting. Christine, sorry all
of this trouble. You were talking about renewable energy. The
question I'd put to you was, is there still a
huge amount of interest in sustainable and renewable energy despite

(15:11):
the attitude of the Trump administration.

Speaker 6 (15:14):
Absolutely, Stephen, And first of all, I just want to
clarify that this connection was through no conspiracy of that kind.

Speaker 4 (15:25):
But what we are also.

Speaker 6 (15:26):
Hearing actually very encouraging the is with the AI boom,
there's going to be a huge surge in energy demand
and actually across the globe, a lot of the countries
are actually pledging very ambitious and aggressive plan to ramp
up renewable energy, you know, to cater for this demand.

Speaker 2 (15:45):
Everyone's talking about making money from fintech, particularly on our continent.
Are there still opportunities to do that? I mean, there
are some quite established players now, but do you see
that as a growth area for you, particularly throughout Africa?

Speaker 6 (16:01):
Definitely, I think we need to actually anchor the ambition
on the bigger set of financial inclusion. If we're only
in looking narrowly at the existing revenue pool, of course
it feels like we are all competing for a shrinking pie.
But the reality is Africa is underpenetrated when it comes
to a holistic set of financial services. If we look

(16:23):
at penetration of mortgages, if we're looking at penetration of insurance,
this all speaks to opportunity for us to leverage technology
to drastically improve everyone's financial inclusion.

Speaker 2 (16:36):
And as a bank at Christine, someone who works in banking,
you occupy a very senior position and a very big group.
And we look at what's happening around the world, all
of the geopolitical risk everyone's talking about the big changes
that we're seeing AI and all the rest. Do you
think that makes your life a lot harder? It must
make it more complex. But for business leaders like yourself,

(16:58):
for political leader in South Africa to make the right
decisions at this time, has that all just become a
lot harder?

Speaker 6 (17:08):
I think it actually makes it more exciting. This it
goes without saying that there will be a lot more
complexity that we need to navigate, but at the same time,
these are exciting changes that we can look forward to globally.
I think it's estimated that through AI we can unlock
fifteen trillion dollars of value globally by twenty thirty. So

(17:30):
that means the way we look at creating value in
AI has to go from being experimental to being systemic
and this actually places a huge amount of burden on
the leaders to think about how to unlock value at
an enterprise level, but also as a country, how do
we actually use this as an opportunity to pivot to

(17:52):
actually unlock a lot of the social issues. Because through
this process we can actually use AI to create financial inclusion.
I'm rather than creating more inequality.

Speaker 2 (18:03):
Christine, thank you Christine Wu, the interim chief executive for
Personal and Private Banking it Apps, are very glad we
were able to finish that conversation twenty six minutes now
after six o'clock. The money show the market really fundament
is a portfolio manager at Advice works really good. Evening
a tough day for clicks that are trading updates. On
the face of it, the numbers all points in the

(18:23):
right direction. Underneath that, though investors not impressed.

Speaker 8 (18:29):
Evening Steven, Yeah, they did have a trading update as
you as you mentioned talking about group revenue being of
about seven seven hours percent, retail sales up six percent,
performacy turn.

Speaker 5 (18:40):
Over about nine percent better.

Speaker 8 (18:43):
But you know, Clique has proven itself over many years
to be a consistent generator of earnings and as a
result of that, they've earned quite a premium rating. So
it's not a it's not a cheap company. Trades on
a very expensive, demanding pe multiple, which is all very
well well when content used to generate attractive levels of growth,

(19:03):
But just at the moment, I don't know that this
level of growth is going to be sufficient to maintain
the sort of rating that they've been on historically. Comparable
store cells is at three point seven percent, of which
two point four percent is inflation, so so barely moving,
barely moving the dial just at the moment. You know,
they do complain a little bit about competition, and I

(19:24):
think that you know, everybody is exposed to competition, but
also about product availability and also systems implementation issues and
the like. You know, these are things that are under
their control. It's not beyond their control. And at that
sort of rating that they've been trading on, I think
the market would would have expected them to deal with
its six point four percent of the day.

Speaker 2 (19:47):
So yeah, strongly, I mean, as SASA, we're up over
fourteen percent. I mean a strong update from them. They'll
make more money from fuel than they expected. They say
this year their destoning planters come on all and all
quite p it considering it as.

Speaker 8 (20:01):
All market certainly like the trading update or the production
update to business update, you are fourteen percent. As you said,
chemicals business seemed to have flopped flat volumes and revenues,
but some fuels does seem to be doing well six
percent above above their guidance by the look of it,

(20:21):
on volumes, and they've they've increased their the expectations revised
up the growth rates for for fuel cells to far
between five and ten percent from zero to three percent.
And yes, I think significant productivity gains being made in
the in the as a result of the distarting plants,

(20:42):
which which means that they need to or they're buying
less call so domestic coal production is done six percent
and purchases of offshore coal and from outside supplies at
least down nineteen percent, and a lot of that's coming
from the efficiency of the of the di starning plants.
And I think the market obviously is pleasantly surprised, and

(21:04):
I think that saw it comes from a relatively recent
history of quite significant underperformance. So there's probably an element
of people starting to bet that they're turning a corner
and the future starting to look brighter for them, which
I think contributed to the price move.

Speaker 2 (21:19):
We spoke to Benguela fund managers last night. They've gone
to the JAC. They're trying to basically put pressure on
mister Price to not go ahead with the purchase of
NKD the Central European retail chain. They say it's a
terrible move, it's going to destroy value. But Alan Gray
have increased their holdings of mister Price.

Speaker 8 (21:39):
Yeah, interesting that Stephen is the announcement today saying Alan
Gray is now Caldo I think just over ten percent
of mister Price, which is obviously a significant stake. You know,
there's been a lot of a lot of shelters have
been complaining about, certainly the lack of transparency about this acquisition,
saying they want more detail and want to know they're

(22:00):
spending so many so much money on a dilute of
what earnings the loot of acquisition.

Speaker 5 (22:06):
But you certainly all agrace taking the other side of
the trade.

Speaker 8 (22:09):
They clearly think that mister Press can continue to deliver
on the good capital allocation decisions of the past.

Speaker 2 (22:15):
And then US GDP figures coming out the US increasing
their economy growing at a revised four point four percent
on an annalyzed rate. That's the quickest in two years.
And we all know who's going to claim credit for it.

Speaker 5 (22:31):
Absolutely well.

Speaker 8 (22:32):
While while it's growing stronger, I think we're all happy.

Speaker 5 (22:35):
To see that.

Speaker 8 (22:36):
The better numbers, we'll have to just see how sustainable
it is and what the impact is on inflation going forward.
That might well negate some of the short term positivity.

Speaker 2 (22:47):
Thanks very much, indeed ready to appreciate it. Rudy Fundamvis
portfolio manager at Advice Works, Bringing the time to six
thirty The Lney.

Speaker 3 (22:55):
Show with Stephen Crudez Live on ninety two point seven
and one streaming on the Prime Media.

Speaker 4 (23:02):
Plus NAP and DStv channel eight five.

Speaker 2 (23:05):
Six eighteen minutes. Now to seven the time, good fruit
to hear from you tonight. We'll speak to ESKIM. Now
you may have a view on this on seven two,
seven oh two one seven oh two. And still I
think quite a few questions around Eskim's demand that everyone
who has a solar installation that it supplies directly with
the electricity must register the system with them, and that

(23:27):
it wants to move them from a prepaid system to
a post paid system. In other words, if you have
solar and you're supplied by ESKIM and you're currently on
the prepaid as I understand what ESKUM is saying, you
will have to be moved to a post paid system.
In other words, you'll get a bill and pay it.
Kevin Pillay is the general manager for the Central East

(23:48):
Cluster and engineer for ESKIM Distribution. Kevin good evening, and
thanks for your time. So I realize, just as a
starting point, that there's a safety consideration here that Eskim
would need to know for safety reasons if there is
another producer of electricity on the property. I have no
argument with that. I completely accept what you say about that.

(24:08):
But as I understand that you also want people to
register for other reasons, what are those other reasons?

Speaker 9 (24:16):
Good evening, Stephen, Thank you, trust are modible?

Speaker 5 (24:20):
You are all right.

Speaker 9 (24:21):
So the reasons essentially is around safety, which you've covered,
and safety is quite a large consideration. And the consideration
is safety of people working on the grid, safety of
other uses on the grid, and I think that's an
important aspect. And the ability for us is a utility

(24:46):
to ensure that we have the well we are capable
of providing electricity to the other users within the required standard.
So solar systems are able to generating purity is of
cause disturbances on the voltage wave forms that can sometimes

(25:06):
create an unsafe condition. So the intention is definitely around safety.
The reason we are marketing it so widely at this
point in time is largely around the campaign that we're running,
where we are waving a considerable amount of fees.

Speaker 2 (25:25):
Okay, so the fees is something I've never understood. There
was a requirement and this gets a bit complicated, and
it wasn't just with you, it was also nurser. But
there was a requirement that a civil engineer had to
sign this or that's gone. I understand the requirement that
a certivied electrician needs to sign it off. That's also fine,

(25:46):
But there shouldn't be any other fee. I don't know
what any other fee would be. So yes, Eskam says,
we're waiving it, but I don't understand what it would be.

Speaker 9 (25:54):
What there is to wave Okay, all right, so let's
start with the engineering requirement. So the civil engineer aspect
is not a utility requirement. I mean, if you're going
to put panels on your roof, that we're not considered
when your roof was designed. I'm sure you're insurance company

(26:16):
or a good homeowner would naturally want to get a
civil engineer to sign that off for load purposes in
the mechanical integrity of that structure.

Speaker 2 (26:25):
Okay, but that's not Eskum's problem. So what other fees
we need? We don't have that much time given, so
I need to understand what Russia. Now there would be
for you to charge a registration fee. That's what I
need to understand.

Speaker 9 (26:37):
Yeah, yeah, So for us to charge a fee, we
firstly the fees were waiving. The major portion of it
is the supply of a smart meter and the installation
of a smart meter, so that you would understand is
a natural requirement.

Speaker 2 (26:53):
There are fees.

Speaker 5 (26:54):
That go with us.

Speaker 4 (26:57):
Analyzing or.

Speaker 9 (27:00):
The veracity of that supplier integrity, and we need to
ensure that it complies with the grid, et cetera. So
you'll understand that there's imposed costs for site visits, et cetera,
and so that would be covered in the administrative and
connection fees, et cetera.

Speaker 2 (27:15):
Okay, the smart meter, is that a meter that goes
both ways? Or is that a smart meter that only
goes one way?

Speaker 9 (27:24):
So it's a bidirectional meter, and that gives the consumer
an opportunity to get credits from the utility for units
that it pushes back onto the grid.

Speaker 2 (27:36):
Here, Okay, if the consumer doesn't want to do that,
do they still have to may for it?

Speaker 9 (27:43):
They need to ensure that they have an installation that
meets the requirement of the grid. If the consumer doesn't
want a bidirectional meter, that is fine with the consumer,
but we need to ensure that the grid, the inverter
and the connection point meets the requirement and ends why

(28:06):
they need to provide this EGI report or a compliance
report signed off by an electrician.

Speaker 2 (28:14):
Kevin, I realize you don't make all of the policy,
but you're representing ESKIM here, so I have to put
this question to you. We've had solar installations on homes
in South Africa. For argument's sake, let's say seven years,
but probably longer, but let's just say seven years. In
all of that time, has there been any problem that
any of those installations from home home installations have caused

(28:37):
on the grid.

Speaker 9 (28:41):
There are, So we do struggle with managing voltage on
low voltage networks and I think we need to maybe
get a sense of appreciation for that. So on the
low voltage network, we don't have an online tap changer,
so we don't have an ability to automatically detect and
adjust the voltage. So managing voltage levels on the low

(29:03):
voltage network is a challenge and fortunately we have not
had an incident at this point in time. But the
numbers are stacked against us. I mean as they don't
have to correct, and you can go and have a
look at global studies. It happened in Australia, it happened
in the UK. The question is do we allow such
an unsafe condition to permeate or manifest without the utility

(29:27):
trying to create a safe cred for consumers.

Speaker 2 (29:31):
Okay, I'm sure there could be an argument that it's
not kind of your job, but for the moment, it
is asking this job.

Speaker 9 (29:36):
It is I mean grid interface. Grid interface is a
utility requirement. Just let's let's let's cover this. If you
have too many generators pausing over voltage on the low
voltage network, the people, including those that have these rooftop solos,

(29:57):
can have an over voltage condition. You can get a
clients burn off, you can get a fire started, many
many unsaved conditions. Now in South Africa we run a
peculiar overet system called a TNCs. If the neutral breaks off,
and this can come through an unbalanced system caused by
these generators, you get a very unsafe condition that is

(30:22):
really undesirable, desirable, and we don't want to get to
that point. So it is I think for the benefit
of all of the users on the grid. That we
are able to have line off sight of the systems
on the grid, we are able to ensure that they comply.
We're able to ensure that we can take grid interventions
to put in necessary equipment should we need to be

(30:45):
able to monitor voltages on the low voltage network and
act responsibly.

Speaker 2 (30:50):
So okay, now that makes sense to me. Thank you
for that. There's been an issue which I think is
going to become contentious. That's not necessarily about elect fisty,
but ESCAM public statements has been have said that if
people do not register their solar installations with you, you
are going to find them. And I'm not sure that
ESKIM has the legal power to impose a fine.

Speaker 9 (31:13):
Okay, So Eskham as a legal power to impose fines
for illegal connections, but at this point in time, we
are not rendering or deeming unregistered small scale em better
generators as illegal, so we are not intending imposing fines.
All we are doing is encouraging customers to come forward,

(31:35):
and more so because they get a cost benefit at
this point in time from the concessionary campaign.

Speaker 2 (31:41):
Okay, I'm very glad to hear that, because I thought
that was going to lead to all sorts of trouble
for Eskum down the line. Okay, the issue of when
you pay. So, as I understand it, Eskum wants to
convert everyone who has solar and is currently on prepaid
to be paying post paid. Why do you want to
do that?

Speaker 5 (32:00):
Okay?

Speaker 9 (32:00):
So the issue is not around prepaid and postpaid. The
issue is around how the tariffs were engineered initially. And
you would appreciate that previously the tariffs were designed around
volumetric consumption and it was not a proper time of

(32:22):
use sort of to men. And in the current setup,
the most representative tariff for metriing technology that we have
is the post paid setup that allows us to implement
the necessary fixed charge and time of use.

Speaker 5 (32:40):
Terriff.

Speaker 9 (32:40):
That's an important part in this.

Speaker 2 (32:43):
Yeah, I presume. I presume that would be the case.
Is that with prepaid at the moment, you can't take
into account time of use. If you are able to
resolve that with prepaid, if I understand, there will be
people working on this. If you're able to, I mean,
someone somewhere must have cracked this. We're not the only
country that has solo installa. If someone cracks that in
the next year, would people be able to stay on prepaid?

Speaker 10 (33:05):
Yeah?

Speaker 9 (33:05):
Most certainly. I think if we are able to resolve
the technology, be able to get the appropriate tariff on prepaid,
ensure that the you know, correct amount of fixed charges
are implementable through the prepaid solution, then most certainly, and
we are working on that.

Speaker 5 (33:25):
Yeah, definitely.

Speaker 2 (33:26):
So do people on postpaid pay more because they pay
a higher network fee than people on prepaid if they're
escum customers?

Speaker 9 (33:37):
Now it's a very wide question. So the tariffs are
designed to recover the cost of supply. It's not designed
to be punitive to any consumer, et cetera. So in
engineering the tariffs, many components are considered. So if you
look at the total recovery for a consumer on a

(33:59):
prepaid system versus that on a postped on a long run,
it's basically the same. However, when the consumption patterns change,
then you get a consumer who uses the grid for
one percent of the time but needs it to be
available one hundred percent of the time. That comes with

(34:20):
infrastructure upkeep all of that, and then you get another
consumer that uses the grid one hundred percent of the
time there's asymmetry in terms of contributions. So it's not
fair on your neighbor to be able to carry the
cost of providing this infrastructure, et cetera. So we need
to ensure that we have a tariff that's equitable, that's fair,

(34:41):
that shares not the cost of producing the electron, but
the cost of having the infrastructure, the wire there and
it being always on and available for you.

Speaker 2 (34:53):
Again, if someone comes up with a clever fee system
for prepaid, would that then allow people to stay on
prepaid and pay the ex they need to pay for
a network.

Speaker 9 (35:01):
Fee most definitely, and that someone would be ESCAM. We
are working on that solution and that should come to
fruition here.

Speaker 2 (35:10):
I do worry Kevin. You know, some of us, not
because of ESCIM, but because of the Joebic City Council
or others have very bad memories of getting estimates forever
never getting a proper bill, and some people might just
oppose going on to postpaid for that reason.

Speaker 9 (35:24):
So that's the beauty of the smart meter, Steven, I think,
and we're not talking about the benefits that the smart
meter comes with. So firstly, they are no longer me
to read. Being smart, we are able to get the
reading instantaneously as and when we require. That's first and
foremost being smart and bidirectional. The one thing we are

(35:47):
not talking about is the immense benefit to the customers.
So you would get a credit and by our calculation,
we would probably be a revenue neutral as a utility
or worse off once we start to pass credit and
we compare that to the offset from the fixed charges.
So customers, I think are approaching it emotionally. But if

(36:08):
you do the numbers what you're going to pay on
the fixed charges, you'll you will gain back from the
credits for the energy that you're putting on the grid.
So estimates should not be a problem. There's a smart
meter up and would the bi directional you stand again.

Speaker 2 (36:26):
Kevin, I really do appreciate the time and the very
clear explanation you've given us. Thank you have found that
very helpful. Kevin Palay is the general manager for the
Central East Customer engineer for Eskum Distribution.

Speaker 11 (36:37):
The Money Show with Stephen Quets is brought to you
by apps A cib A Pan African Bank invested in
your story and the potential it can unlock it because
your story matters as as a raised fsp.

Speaker 2 (36:50):
Your response to that Escue conversation oh seven two seven
O two one seven o two.

Speaker 9 (36:54):
Well.

Speaker 2 (36:54):
An interesting poll from the consultancy Egon Zender recently suggesting
that many see when they need advice, when they need
to talk something through, aren't going to their board. They
aren't going to the chair. They are going to their
colleagues at executive level. Andrew Woodburn is the managing director
of Amrop Woodburn Man, Andrew, good evening. I would have
thought a chair of a company is a huge asset

(37:16):
for a CEO, the sort of voice of wisdom, if
you like, the voice of experience, And yet it doesn't
seem to be quite like that.

Speaker 12 (37:23):
Very good evening, Stephen. Now you've got it right. The
chair should be that in some cases not it should
be that. I mean, it's a fascinating survey. I know,
Eganzena most of their data's probably come from developed markets,
where of course in our world were slightly different as
you were discussing with ESCAM. But at the end of
the day, actually the way this works, it's much closer

(37:47):
to what the survey has shown than what people think.
People think the board run the company, they don't. The
board's role is really only to do three things. Ensure
that from a governance perspective, the egg executive are doing
things they should be doing in an ethical and moral way,
and that follows the company's act and the king corporate

(38:07):
governance guidelines and so on. So that's really what the
board does, as stewarded by the chair. They then perform
advisory services where required. In the old days, and for example,
in soees, board members may have thought they were giving
the CEO and the executive instructions. In the modern era,
it's the executive that proposes strategy or proposes solutions to

(38:32):
problems or shares with the board how are they going
to do something, And in their advisory and governance role,
the board stress tests those proposals, checks them for pragmatism, governance, behaviors, robustness,
probability of success, and then the executive may respond to
their challenge by modifying those solutions. So actually, in most

(38:56):
cases the board is not providing the solutions, and therefore
survey might be presenting this in a slightly different way
than what most of us in the public think is
going on. But actually the modern era with governance and
advisory services from the board and execution they called the
executive for a reason they execute is it is working

(39:18):
like this, except though in good practice the chairman and
the CEO should have a very close working relationship but
not compromise the chairman's independence. So top I've explained it
a little bit.

Speaker 2 (39:30):
No, absolutely, I mean I keep coming back to the
example of ESCUM where I'm Tetunyati. He's the chair but
he's been playing in public at least quite an active
role and clearly has supported the CEO and to the hilt,
and it's worked.

Speaker 12 (39:43):
Direct and that is the very that's the best practice,
that's the modern way of doing it. And that is why,
for example, in some soees during the era we've come
through where board members thoughts they could dictate which supplier
got a tender or how they were going to do something,
or even dictate strategy to the executive. You saw executives

(40:07):
number one not staying long because really they couldn't take
the decisions. You saw the service delivery fail because the
executive was unable to execute because they are the ones
that go to work every day. And then in some
cases you even saw board members stepping across the line
and been caught for doing things that compromised their governance position.

Speaker 2 (40:28):
Andrew Woodbin, thank you so much. Managing Director of Amrob
woodburn Man. Just after seven o'clock.

Speaker 1 (40:34):
And now The Money Show with seven on seven o
two network, All The Money Show with Stephen Curtis has
brought to you by Absent Corporate and Investment Banking, a
Pan African bank that's invested in your story because your
story matters.

Speaker 2 (40:50):
Good to have you along with us for the second
hour of the program. Plenty to come. We've got some response,
of course to that conversation with esk him what's and
what's up? Voice notes, you'll hear those in just a moment.
We'll speak to see pumel Le Zondi Arteca expert. Would
you believe there are now apps in Denmark that help
you to avoid doing business with American companies? Now, why

(41:11):
do you think that would be? What do you think
could have happened that might create that market. We'll speak
to Blani Balabala, the from the Township Entrepreneurs Agency about
how you sort of keep your business sustainable in twenty
twenty six and then in Investments School tonight with Governor
and Stefan Englbrecht. We're looking at how you survive, how

(41:34):
you make money in these volatile times, so many different
ways to look at it. Good to hear from you
tonight on double one, double A three oh seven oh
two and two one four four six o five sixty seven.

Speaker 4 (41:45):
What appened Stephen on seven two seven oh two one
seven oh two.

Speaker 2 (41:50):
Well, voice notes coming through. As you can imagine after
that conversation with Esquim about solar installations.

Speaker 13 (41:57):
Stephen, there's no feedback at the moment from solar systems
back into es COM or city power, So how can
you claim that there can be any danger whatsoever to
their technicians. Their technicians are in no way affected. So
we don't believe that story at all.

Speaker 14 (42:17):
Well, if they're going to be worse off, why does
it make any business sense to move everyone off the
meters to both paid. I mean, that's the biggest lie
right there.

Speaker 5 (42:28):
Hi, Stephen, thanks again for the es COM interview.

Speaker 15 (42:31):
I'm wondering why AS doesn't give you an option with
the smart meter that if you have a stable network,
that you can use your own personal network to get
the smart meter online rather than paying them. And that's
like a double cost, because if there smart meter is
that smart, then it should or it should have an
option to connecting on your network to communicate with the system.

Speaker 5 (42:55):
Thank you.

Speaker 2 (42:56):
Yeah, that's a very interesting idea, some interesting responses to
that conversation. Let me just make this bigger point, which
is that ESKIM is coming at this I think completely
the wrong way, and I'm talking specifically about the messaging
around this. For a start, they keep referring to an SSEG.
I wouldn't know an SSEG if it slapped me through
the face. It's a solar system, okay, can we please

(43:17):
call it what it is? And I'm not interested in
the technical explanation. Nobody I know calls the thing on
their roof an SSEG. It's a solar system. Let's be
done with that. The second thing is that when you're
ESKIM and you've created a situation which has forced most
people to spend money they didn't want to spend on
a solar system, well, you're already on the backfoot from

(43:39):
a messaging point of view. So first I think you
would need to say we made this situation difficult for you.
Now we're ready to work with you, and this is
how we're going to do it. And then the third
thing is you can't. You can't now demand a fee
and then appear generous when you wave it. There shouldn't
be a fee in the first place. Should be a
simple thing. Go onto the ESKIM website. Stephen Curtis, bloody blah.

(44:02):
Where do I live? What do I have?

Speaker 5 (44:05):
This is what it is?

Speaker 2 (44:06):
Technical details, electrician that's signed it off, doff, their number
or whatever it is. I'm sure they have a compliance number,
of certificate number or something like that. Full stop, end
of story, Fina. What else would you need? You can
and there wouldn't need to be anything else, but to
say I need to charge a fee or this or that, well,
that's where people get a bit sicky. I do think

(44:28):
that ESKIM is right to really start to actually it
just remind us of what a bi directional meter can
do for you, and actually that it might just help
you make some money. Bear in mind, you're always going
to be putting electricity into the grid when everybody else
is and when the costs are low, and you're always

(44:49):
going to be buying when nobody has any solar power
and the costs are high. So just remember that I
don't know how much money you'll make, but anyway, my
thoughts for the moment. If I ask him, I'll start
the communication around this from scratch frankly thirteen minutes after.

Speaker 4 (45:06):
Seven how money so takes Thursday.

Speaker 2 (45:10):
One of the wonderful things about human beings is that
whenever you do something, they will react. And so President
Donald trump interest in buying, stealing, owning, purchasing and nexing
whatever Greenland has now led to a situation where people
in Denmark have worked out ways to to boycott American products.

(45:32):
Seles artake experts, good evening. We should have probably expected this, hellos.

Speaker 16 (45:40):
And yes, it should have been expected that people in
Denmark where are not happy with the way Trump has
been doing things, especially when it comes to him saying
he wants to own Greenland in whichever more way that's
going to happen. So yeah, So now they are creating
and downloading app that are guiding them, and they're guiding

(46:03):
each other through these apps and how to boilcotts American
products at which American products of boilcotts, but the alternatives
for those products as well.

Speaker 2 (46:11):
And I mean I presume that in Denmark having these
apps is a mark of pride. They must be doing
very well. Well, yes it is.

Speaker 16 (46:20):
And also what's to be happening now is that these
are now the best performing apps on the apps store
in Denmark, which interestingly enough, so I think of any
app that you do know, well, these new apps that
are helping Danish people guide each other on how to
boilcott American products and what the alternatives of those products are. Well,

(46:44):
they've become the best, the most downloaded apps in Denmark
and actually the most used apps in Denmark.

Speaker 2 (46:52):
It's so interesting to sort of track the progress of
the Trump administration. I mean when Trump took over, he
was going on about big texts they own of ex
and Tesla. You know, Musk was his sort of first
body that seems to have fallen by the wayside. TikTok
was a target of the US government. Things have really changed.

Speaker 16 (47:11):
It has, and it's just quite interesting that and now
he's had conversations with big tech. For example, they're going
to get certain incentives. You may say there was an
incentive with TikTok, when where now there's an an American
version of the app that's going to be run by Americans,
including one of his own sons, Donald Trump, that is,

(47:33):
and and and now it seems like he's calling big
tech in and he's like, hold on, well, the data
centers that you're going to be running, you've been getting
electricity incentives so you don't pay as much as you're
supposed to. Well, now you're going to need to start
paying for the electricity that the data centers are going

(47:55):
to be using in order to run all this technology
and all this AI that's going to be running through
these data sensors. So it doesn't seem like it's as
big of incentives that the text sectors. It would because
quite a number of these companies were actually funding Trump's
campaign leading up to him becoming president last year.

Speaker 2 (48:18):
The other thing that the Trump administration is going on
about and his tech advisor Michael Kratzios, is around EU regulation. Now,
I mean, I find it quite hard to believe because
they say eregulation stops freedom of speech. They just want
permission to be frankly racist. Why are the Trump people
so angry with EU regulation? EU regulation represents what people

(48:41):
in the EU want.

Speaker 16 (48:44):
Well, that's the same, but it's impacting on a lot
of these American companies because the latest one being x
for example, which has been hit with fines because of
the pornography that's been appearing on the platform. And I'm
also the AI AI companies as well that have been

(49:08):
found to have adult content and so also content that
seems to depict children in an adult fashion as well.
So that's basically what the Europeans have been worried about,
and that's why they are finding these American companies, but
also they want to guide what Europeans have access to.

(49:28):
But it's impacting on the on the companies that are Americans,
that are coming from America that are creating this technology,
because I mean, for the longest time, tech has been
created in Asia, not in China. And also the United
States of America and EU has been playing regulator, but
that regulation is now impacting on profits because you are

(49:51):
now limiting the number of people in the region that
have access to these technologies because I'm in the latest
one for example, and I lack the and Britain also
thinking of banning under sixteens from being on social media
as well. And again some of these social media companies
are coming from the United States of America.

Speaker 2 (50:14):
In my experience, it is a very bad idea to
say to parents, we must be allowed to harm you
your children, which I think is how this argument is
going to end up looking if they're not careful.

Speaker 16 (50:25):
Well, that's the thing, right because with all this regulation,
because we've had social media for almost two decades now,
so two decades on, it's changed, it's morphed into what
it is today. So I think what these regulators, especially
in Europe, and we've seen it elsewhere in the world
like Australia for example, they've realized the harm that it

(50:47):
can cause, especially two young minds that we've seen Denmark
as well, saying that they're not going to be technology
is no longer going to be allowed in the classroom.
They're going back to textbooks as in the older days
because of the impact that it has on learning and
how children develop as well. So there's that argument as well.

(51:09):
Beyond profits, it's the argument or the well being of
young people and the well being of the European region.
But Americans or the American government in this case of
saying no, but you're impacting on us, so stop regulating us.
Left for what we want with our technologies in your region.

Speaker 2 (51:28):
Super millenniare Zondie. Thanks so much, I'll take an expert. Well,
it's going to create a nice battle, isn't it. Nineteen
minutes after seven the.

Speaker 1 (51:35):
Money shows small business focus.

Speaker 2 (51:38):
Well, you know, of course, how difficult it can be
for a small business to start the year with a
clear plan, and entrepreneurs often you get the sense they're
rushing around doing things. They're sitting down and planning can
be quite difficult. Bililani Balabala is the founder of the
Township Entrepreneurs Agency. How's it, Bulolani, Good to see you man.
Why is it that entrepreneurs are not known for being
the world's best planners?

Speaker 17 (52:00):
No, I think, thank you so much, Stephen, and good
evening to all of your guests. It's purely because I
think we've gotten into the habit of being reactionary. I
think you sort of then see it, especially with things
like managing basic things like your compliance documents.

Speaker 5 (52:15):
We don't do.

Speaker 17 (52:15):
Them, so you're consistently spraying and praying, and then I
think what you then pick up often is that when
you start out, you start out bootstrapping and start out
with the Hassler's mentality, and houses mentality really is there's
no systemization. Whatever goes that day goes and you pray
for the best, but really truly for you to enter
into the next level of your growth and to scale
your businesses your business, you need to start planning, which

(52:38):
is then being you know, taking full asset inventory of
everything that you have and assets and this time is
your time, your knowledge, your team, their capabilities, your resources,
and then whatever resources.

Speaker 5 (52:49):
That are given to you by your clients.

Speaker 2 (52:51):
Now, when you need to do strategic goal setting, how
do you sort of do that?

Speaker 5 (52:55):
What does it?

Speaker 2 (52:55):
I mean, it sounds like a nice, wonderful phrase, but
what is it actually?

Speaker 5 (52:59):
I mean, it's strategic goal setting.

Speaker 17 (53:00):
I mean really sounds like a really nice phrase, but
I think for me to feel a simplified I mean,
it goes into it. The simplest form is strategic planning.
And I mean strategy planning is twofold number one is
the planning. When you plan, you are working on things
that you've got control, things that are within your periphery,
things assets and the assets and goods that are within

(53:21):
your disposal, so you've got full management of that. When
you talk about planning, we can't talk about planning first
and foremost without talking about optimizing, really understanding what you
actually have. So it's important that as a business owner
you understand what capabilities you have, but also the resources
and tools that you actually have. Take stock of your
business before you go out there, and then your outsource
whatever it is that you need. The second part is

(53:42):
when we sort of think about strategic planning. Strategy planning
is when we look at number one, we do a
myriad of different things. Look at what's happening in the environment,
in the economy, but political moves that have happened around us,
what our competitors are doing, what research we've done, and
then we then come up with the ethos that says
business like mine to play on this particular field because
of reasons one to three for five. And then the

(54:04):
tools that we'll use are one to three for five.
And because of that, we then anticipate or we assume
that the results is going to be this result. If
business that's strategic planning has got a much more better
chance of succeeding because you have number one than a
full inventory and optimize the costs. Number two, you are
now have sussed out what is in the market, and

(54:24):
you're gonna go out there and deliver most cases what
usually happens around January is that small businesses only plan,
but they do not strategically plan. That means that you
don't plan for your growth. And what that then does
is that it limits your growth because at the time
it's already January, competitors, sorry, but the time it's already February.
But the time it's already June, competitors are at your
feed Sometimes I even superseded during the market because you've

(54:46):
only worked around what you have and of ask you
the question, simple question, how much more roomor is there
in the market for us to grow?

Speaker 5 (54:52):
And how do we grow in the market?

Speaker 2 (54:55):
I suppose the thing about being a hustler is that
you think short term. Right, Yes, that must limit you
when your business gets to a certain size.

Speaker 17 (55:02):
Not definitely, because when you think about think about it
this way. I mean, in order for you to truly
grow and scale, you need to play the long game.
Sometimes it's working with a client who might not necessarily
have the amount of money to pay you, but it's
a strategy play because the market is looking at that customer.
They might not necessarily have the amount of money to
pay you because of they've made losses and they've had

(55:23):
to rechange, and they've had to sell assets to keep afloat.
But you understand that the strategic players that you are
now buying back the brand reputation that comes with the
association of working with that particular brand, that opens up
the door to you working with other organization. There are
many other plays for you to think about in playing
the long game. But I think when you then take
on the mindset to play in the long game, you

(55:45):
then need to ask yourself a couple of key question
what's in it for me, what's in it for them?
What if there's a long term win for us? What
do we then do in the immediate to then build
rapport so that we then work after what so that
we can build the how? And the how really is
the plosophical way. We've understood what your values are, what
my values are? That will build, But short term thinking

(56:05):
will always kill you, and a lot of small businesses
do this way. You've got that one lines, you haven't
delivered on the service, but you're still fighting them to
pay the balance of their amount. But they're frustrated with
the fact that the tent was ripped and their son's
birth there was a mark, So there's no empathy whatsoever.
You're not thinking about the long term, not thinking about
the fact that you will win the battle, but you
will lose the war. And that's what I always say

(56:26):
to my staff members and then small businesses that I
work with. Put yourself in the client's feet or the
client's shoes, think of the long term and let them
be your ambassadors. But there's only one way they'll be
your ambassadors, and you think long term. We operate from
an empathetic point of view, and you build up your
emotional intelligence.

Speaker 2 (56:41):
And I mean entrepreneurs also try and do everything. Yes,
I mean it's impossible eventually.

Speaker 5 (56:48):
I mean definitely it is.

Speaker 17 (56:49):
I mean jack of all trades, master of nine is
a very true is a very true one. And I
think for me, you know, oftentime I get the question
or you meet entrepreneurs, and especially when you look at
their business profile, and especially when the micro enterprises are small.
It ranges from we're a cleaning company, we're a videography company,
a production company. We also do maintenance, was to do construction,

(57:10):
and then we occasionally in the weekend will shuttle you around.
Then when you sort of ask this individual, you know
which one is your strengthen your focus to con't clearly
articulate where the strengthen focus is. And there's nothing wrong
with having other divisions within your organization. As long as
you've mastered the one division. You've got a very strong
management and operational team to execute on all the various
parts of the business. So the right way of building

(57:33):
it is to ask yourself what is the value chain,
what is the pipeline? How do I scale myself and growth?
So you then move from outsourcing to reselling, to building
up your own equipment of machinery, building your own teams, and.

Speaker 5 (57:42):
You grow within the value chain.

Speaker 17 (57:44):
That is how you diversify your income without losing your focus.

Speaker 2 (57:48):
Well, Alani, thanks so much, really do appreciate it. Good
to see. Bililani Balabala is the founder of the Township
Entrepreneurs Agency.

Speaker 4 (57:55):
The Money Show Investment School.

Speaker 2 (57:57):
Twenty two minutes now to eight o'clock time for Invest's School.
And this week US markets plunged as Donald Trump said
he was determined to take control of Greenland, and then
they jumped when he said he still was, but he
wasn't going to do it by force. And the feature
of the last year has been the huge volatility in market,
So how do you make money reliably and consistently through

(58:18):
investing in this moment. Stefan Engelbrecht's portfolio manager for Marzi
next Gen and VERV Govinda is the portfolio manager at
rand Switch. Gentlemen, thanks very much indeed for coming in. Stefan,
let me start with you. Is this a moment at
which we need to change our strategy? Do we need
to accept that we are not investing in normal times?

(58:38):
Or is this just hyper normal?

Speaker 18 (58:41):
Well, the question is always well, Fizzley, thank you very
much for having us. Stephen, I'm always a privilege to
be here.

Speaker 2 (58:48):
Yeah. The question is that if you try to time.

Speaker 18 (58:50):
The market and try to change your investment methodology, there
is so much research showing that that is just the
worst thing to do at any point time. So if
you're a growth investor, I think the best thing is
just to keep on using your growth strategy. If you're
a value investor, keep on doing your value then try
and switch from one to the other because you think

(59:11):
that the markets may be a little bit more volatile.
That is, of course, if you have a long term horizon.
If you are, however, closer to your retirement age, it's
a bit of a different discussion that you need to
perhaps be a little bit more protectionist going forward.

Speaker 2 (59:27):
If do you go along with that, I mean no,
I've always thought you have quite an appetite for risk.

Speaker 10 (59:32):
Look, I do have an uptet for risk if you
can afford the risk.

Speaker 5 (59:35):
Yeah, you know.

Speaker 10 (59:36):
And as we said that basically, if you look at,
for instance, the life cycle of an investor, if you're
twenty years old, take the risk, hold on, just buy
into any kind of you see out there. If you're
like fifty five, sixty sixty five, you know, waiting five
ten years with market for cover text from sixty five
to seventy five, that's a very different change in stage
in life. And so I mean look at capal protected instruments,

(59:59):
things that how like structure products, for instance, which may
kept the upside. So you're not going to get maybe
the fifty percent the market does in a good year
or a great year, but you won't get the negative
that the market does in a bad year. That might
make more sense to you than actually trying to go
out and just maximize long term returns. And I think
structure products for people that are approaching retirement that have
income needs or basically can't afford the time it might

(01:00:23):
take to recover, you know, from a downtown. The thing
I put to you is that you know, in two
thousand and one or two thousand, when this dot com
crash happened, it took the S and P thirteen years
to libly recover above the level it wasn't that pid
of time? Thirteen years is say what forty to fifty three?
That's a long time?

Speaker 5 (01:00:40):
Yeah?

Speaker 2 (01:00:41):
No, absolutely, okay, So in moments like this and then
and then the other question I suppose is is this
an extraordinary time stefan not just because of the geopolitics,
but also because of AI, because there's a there's from
from time to time you can almost sliff the markets
feeling uncertain like most of the time it's great by

(01:01:02):
as much in video as you can, and then suddenly
there's a whiff for a bad week or something. So
is this a little bit more complex than most times
of uncertainty?

Speaker 18 (01:01:13):
I listened to a brilliant podcast the other day by
one of my favorite authors.

Speaker 2 (01:01:23):
Sorry, sorry, not.

Speaker 18 (01:01:26):
Anyway, anyway, we said nostalgia or we we tend to
look back in nostalgia with nostalgia at historical markets. And
the reason for that is because we forget about all
the stuff that we were worried about when that when
the markets were doing going up or going down. We

(01:01:46):
always have something to worry about. Yes, now currently it's
it's a one tweet or truth after the other that
we have to be aware of. But in the past,
we had very similar concerns, and then we just look
at what the market tend to do over the past,
and we forget about all of those worries that that
we tend to have. I mean, so Africans have been

(01:02:07):
worried about this is that African market for how long?
And yet over the past decade, look where our market
is currently.

Speaker 2 (01:02:15):
I mean, I've always thought we we feel more comfortable
in the past because we've come to understand it, whereas
you don't actually understand the present, and we don't always
understand our past accurately either, But that's a different story.
So viv okay, you you would ask a question about
the what's worked for us in the past, the sort
of historical assumptions, but the historical assumptions have often worked,

(01:02:39):
and then that you know, in a way to build
on Stefan's point, if you're going to well, if you,
if you, if you've got a system now, don't change it.
But then you've got to try and compare where we
are now compared to some big historical moments and wonder
if things really have changed. So this takes us to
a much more complicated question which has something fundamentally shifted

(01:03:01):
and investing in the last three years.

Speaker 10 (01:03:04):
I think this fundamental in technology and one of the
few things that actually does change human like behavior, et cetera,
is technology. And the invention of the gun changed, you know,
the world eternally. The invention electricity changed the world. The
inst the print, you know, towards a printer's changed the world.
I do think that we are in one of those

(01:03:24):
kind of points, and this is not I would I
would say even the Internet probably was not as big
as AI, even cell phones on as big as AI.
This is something that you'd have to go and maybe
look at electricity, maybe the industrial revolution. In those scenarios,
the world does change in very fundamental ways. And the
thing with AI right now is that we don't know
for certainly if this technology is really going to take

(01:03:44):
off the way we think it might. If it does,
if we do how we are in a world in
five years time where you have an Einstein in your pocket.
I mean that world is literally inconceivable, and we don't
even know how to understand how that would work in
terms of labor markets, in productivity, in terms of a
variety of different factors. Already we are starting to see

(01:04:05):
things like points in self driving vehicles. I mean, I
think the Tesla insurance when it has self driving on
is cheaper than move doesn't have self driving on, showing
that the insurance is showing that actually it is a
less risky option. What happens when you have the number
one job in the world driver being replaced That is
not you know as before for stability. So we are
living in a very uncertain world from that point of view,

(01:04:27):
and I do think that you know, if you had
to look at it like ten twenty years in the future,
we'd look back to it like the invention of the
printing machine, like you know, the printer, and say, oh wow,
it's a wonderful invention, not realizing there was one hundred
fift years of war Europe after that because of the invention.
We might look back at the industrial evolution, not realizing
that the subba, you know, the sabotage staff, the alatt eites,
et cetera. We are living through one of those periods

(01:04:49):
in which things are going to be crazy. In twenty
thirty fifty years time they look back and say, Wow,
what a wonderful time to be alive. But now it
looks quite crazy and quite scary to be in the middle.

Speaker 2 (01:04:58):
Okay, so if it's crazy, step on, do we just
do whatever whatever Warren Buffett has done? Do we just
buy as much gold as we can? Then we have
to be more creative than that. Really, well, I.

Speaker 18 (01:05:13):
I would argue that we always feel as though we
are in a period where the technology is just changing.
I think when when people were discussing the Internet, they
were saying exactly what what we've just said about the internet,
what he's saying about AI. Perhaps we have now a
different view. We probably had the same opinion on social
media how that is going to change the world. So

(01:05:36):
I think that that we tend to overestimate the amount
of disruption or what disruption is going to cause. In
in the financial markets. The disruption is real, it's happening.
But financial markets are quite quite good at allocating capital
to where it's supposed to be reasonably efficient. Yes, we

(01:05:56):
do have a few bubbles in between. But if you
just keep on following your investment strategy, keep on investing
the way you have been, I think that is all
Like Warren Buffert, just keep on inveating the way he
has been for for the past sixty years, then then
that is probably the best way of trying to maximize
even during these volatile periods.

Speaker 2 (01:06:20):
If you look at what's happening, so many people are
looking for gold, They're looking for a safe haven. Is
there a problem with just saying I'm going to take
everything I have. Gold's going to go through five thousand,
It'll go through five thousand, five hundred. Look at where
the predictions were for the end of last year, much
lower than they actually were, and I know, whatever happens,

(01:06:40):
I'll know that it's it's money that is safe. Is
there Is that the wrong strategy?

Speaker 5 (01:06:45):
Yeah?

Speaker 10 (01:06:46):
Look, I mean gold has prolonged periods. Again, we look
at like over twenty years and say, wow, well for
twenty years look like a period like over like a
toy period. You look at a tenure pinion that thatt
your period, it looks look quite as attractive you know
what I mean. There's periods in which the market's really
to perform, even things like gold really and to perform.
I remember when gold fell dramatically in two thousand and eight,
people thought, what safe favor do you have here? You

(01:07:07):
know what I mean? When things foiled as much. I
think what you can do is that there are instruments
that you can create or can be bought that to
find what your outcomes look like. You say, I don't
want to lose money, but I'm willing to say anything
above say eighteen percent up per adam. I don't take
there's an instrument that you can buy that will do
that for you. Eighteen percent per anim is enough to

(01:07:28):
basically combat information, give you a litturn you can live off,
et cetera, et cetera, especially if you don't lose money.
And like modern Buffet says, the number one ruleers don't
lose money. Number two rollers look at number one.

Speaker 2 (01:07:40):
It's a very simple way of looking at it. I think, Stefan,
there must also be if you're young, like you know,
we are to say, okay, I'm going to take a
big bet on something like in video or an a
pick an ai stock and I'm gonna put as much
money as I can there, and I'm just gonna hope

(01:08:01):
for the best because there's the because that is how
you would make the most money, actually is you would
if you pick the right stock, particularly at this moment,
that is how you would make the most money. The risk,
of course is huge.

Speaker 18 (01:08:15):
Yeah, I mean you've just hit it on the head. Absolutely,
that's that is. That's what a lot of entrepreneurs, that's
that's basically their strategy. And we all only know about
the successful entrepreneurs or the successful investors who who did that.
We tend not to hear about the guys who made

(01:08:38):
bets like that and and then lost everything. And I
think they outnumber the guys who made the success out
of it significantly. So diversification is sill a fantastic strategy
to my mind, in a for for any portfolio. And
and just keep on diversifying that portfolio. Don't take these
big bets you never know what were gold.

Speaker 2 (01:09:00):
Or something like that.

Speaker 18 (01:09:01):
You never know perhaps tomorrow they I don't know what
could get gold down. At the moment, it looks like
everything is just pushing it up, but it can start
to move move against you.

Speaker 2 (01:09:11):
And if you've made two bigger bits.

Speaker 18 (01:09:13):
It's it's going to hurt your your portfolio massively well
divers well diversified portfolio is the way you sleep while
at night.

Speaker 2 (01:09:22):
Investment School on the Money Show. You speaking to Stefan Engelbreck,
portfolio manager for Marsie next Gen and they've governed the
portfolio manager at rand Swiss. How do you invest in
volatile times? We have this conversation again next week. It's
ten minute stage.

Speaker 11 (01:09:36):
The Money Show with Stephen Quets is brought to you
by abs as cib a Pan African bank invested in.

Speaker 4 (01:09:43):
Your story and the potential it can unlock because.

Speaker 11 (01:09:46):
Your story matters, as as the Rester, the FSP.

Speaker 4 (01:09:51):
The Money Show, Investment School.

Speaker 2 (01:09:53):
How do you survive these volatile markets? Stefan Engelbrech's portfolio
manager at Massie next Gen with governor's at Ramswiss. Okay,
so how would you protect against an extreme geopolitical event?
So yes, that President Trump says he's not going to
use force to take Greenland?

Speaker 5 (01:10:11):
What if he did?

Speaker 2 (01:10:12):
What if something happens in the Russia Ukraine conflict or
in the Middle East and Iran and oil? Are there
certain ways you can protect yourself against that.

Speaker 10 (01:10:22):
Yeah, look, I mean short of the prepper with the
you know, the bunker, etc. There are capital protected instruments
that will just rely on the fact that the issuer
stays liquid, you know, stay is a credit worthy Since
two thousand and eight, I think we've got to a point,
especially with the new rules coming around around you know lenders,
it's on that you can pretty much trust bank credit
to a large extent that you could have for quite

(01:10:43):
some time. And so if you have a thing backed
by a BBVA or a backed by one of the
major banks created like a rated banks in the world,
you can be pretty sure that you know they will
keep their promises. And if they basically give you a
capital guaranteed products or they give you a product that
will give you a certain outcome range of outcomes in
certa of circumstances. That's a way to basically protect yourself
and still get upside because the world does go you know,

(01:11:05):
like you say crazy like that, but in the bank
is not as valuable as it could be, especially if
inflation takes off, and if you know, AI stily takes
off as the way it does. Elon Musterday says stop
saving for the future of plast couple day says, stop
staying for the future, don't worry about retirement. It's all
going to be like, you know, free money into the future.

Speaker 5 (01:11:20):
Who knows.

Speaker 10 (01:11:21):
But I do think that there are instruments available that
if you just got to set your side, you set
up up your yourrec criteria, how much risk do you
want to take, what's your upside you want to get
up to get to reduce your resk of the level
there will be a product that fulfalls those needs if
you're sensible about it, and then invest in those things,
as opposed to just saying you know, I will invest
because historically the market does eventually rise after seven years

(01:11:44):
or thirteen years or fifteen years. The seven years, thirty
years of fifteen years is a long period of time
when a human life stefan.

Speaker 2 (01:11:51):
I mean, are there things you can sort of fields
you can go into to try and avoid that kind
of geopolitical risk? I mean, it seems to me that
the next ten years we will probably have more geopolitical
shots than we had in the previous ten almost certainly.

Speaker 18 (01:12:07):
Well, yeah, I mean that they have been monitoring these
geopolitical tensions over the past few years and yeah, I
think last year was a record since since the Second
World War or something like that. Yeah, I mean, once again,
I will just highlight diversification. And I knew you were
going to say that. I'm starting to sound like a
broken record a little bit. Yeah, but yes, I mean

(01:12:29):
it's it's don't pre empty these things. You don't you
don't know what is going to happen. You don't know
whether the market is going to actually just dismiss it entirely,
and it's it's just a good strategy to keep on
investing the way you have been. Time is the greatest

(01:12:50):
friend of the investor, even during times when politics is
it's causing a lot of havoc on the news screens.

Speaker 2 (01:13:00):
I'm going to put this to both of you, but
Viview first, It's this South Africa's moment because if you
look around the world, I mean, yes, okay, gold helps
things seem to be coming together. Capital has got to
go somewhere. This is a good moment for South Africa markets,
south African investing.

Speaker 10 (01:13:17):
Look, I think we've had a vibe shift since the election,
but we haven't had the actual underlying economic performance that
we need to see come through Unfortunately, we kind of live
in a world where the US is growing up three
times faster than we are. Yeah, it just doesn't make
sense from an economic point of view. We need to
see that economic growth come through. The danger I see
right now is the technologies that are occurring are both
very powerful and sickly. None of it is happening in

(01:13:39):
South Africa, and that is the real danger here. We
are in danger of if this thing does take off,
being left behind like we were in the Industrial Revolution,
and we know how that turned off for the Third World.
It didn't look very nice afterwards.

Speaker 2 (01:13:52):
Stefani, you may be a bit more optimistic. I mean,
I would say, but we have platinum and you're probably
going to need that, and we have ferrochrome and you're
probably going to need that, and we have you know, diamonds.
No one needs that.

Speaker 18 (01:14:03):
Yeah, I mean, listen, you can still think of very
negative things to say about South Africa, but if you
look at the trends in South Africa, it's actually looking
quite good. Our governmance, government's finances are actually improving. You
can't say that about a lot of governments anymore. We
have a central like my colleagues stated to joke that

(01:14:25):
South Africa is probably one of the few countries that
still has a proper monetary policy framework relative to the
rest of the world. It's funny to think about it
like that, but we have where we have raised interest
rates with inflation is too high and we'll cut it
when inflation is lower. We actually use monetary policies so
the way it should be doing So. There are a

(01:14:46):
lot of things that actually is stacking up for South
Africa and we are probably now the less ugly girl
at the Dods floor. It's there are a lot of issues,
but we're starting to look quite interesting. It's interesting now
people are starting to to not discuss when are we

(01:15:07):
going to be downgraded any further, it is when are
we being upgraded? Can we actually get investment grade again?
I mean, there's a big change from where we were
in the past, and the market is always about those
incremental changes. The second derivative of the of the trend,
and that is definitely in South Africa's favor. Yet I
do agree with whether there we do need to get

(01:15:28):
that growth and we do need to get unemployment under control.

Speaker 2 (01:15:33):
Whether we've got thirty seconds if you just buy the
index doesn't you know, pick one America's ours. You, despite
this period of unbelievable uncertainty, would still make quite a
lot of money.

Speaker 10 (01:15:44):
Yeah, I mean, look obviously dark edders that were the uncertainty.
Like I said, like in the early two thousands, thirteen years,
S and P flat to negative. If you think in indexes,
you think where to go, but you have the ability
or don't have the ability to check the risk by
a structure of that index capital protects you know, one
hundred percent and then say, okay, I'm going to take
the average market return of that thing over the lastly

(01:16:06):
ten years or something as my opside that's available, and
that's something you can do. It's not gonna make you
the fortunes that you will not get by buying the
single stuff that goes up one hundred and or two
hundred times, but it will make sure that you don't
have the chance of losing everything.

Speaker 2 (01:16:20):
Verve Governor, thank you so much. Portfolio manager at rand
Swis Stefan engl Brecht, good to see you again. Portfolio
manager for Mazzi next Gen at Maxi Acid. Thank you
both very much, indeed for coming in on Investment School tonight.

Speaker 11 (01:16:31):
The Money Show with Stephen Quetez is brought to you
by abs A cib a Pan African bank invested in
your story and the potential it can unlock it because
your story matters.

Speaker 4 (01:16:43):
APPS is the Rester FSP.

Speaker 2 (01:16:45):
Talking of volatility, The Dow Jones is up a full
percent one up one point zero five percent, the NASTEC
up one point one, the S and P five hundred
up point eight one. It's supper time time for attacker.
It's eight o'clock

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