Sanlam & Ninety One cement strategic deal and Treasury gives FIC power to conduct lifestyle audits

Episode Transcript
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Speaker 1 (00:01):
And now The Money Show with Stephen Cribbits on seven
o two. Let's walk little.

Speaker 2 (00:07):
The Money Show with Stephen Curtis is brought to you
by ABS of corporate and investment banking, balancing economic growth
with ecosystems. That's how they're invested in your story. Good evening,
seven minutes after six. I'm Stephen Crotis. Welcome to the
Money Show. So much to come tonight, and I mean
keep talking about the good news. The fuel price dropping,
the announcement coming through today, finally from Wednesday morning. Call

(00:30):
it the stroke of midnight on Tuesday. If you like
fuel costs coming down quite dramatically actually, and as a
result of that, in some cases, depending on where you are,
you'll be able to get a leader for under twenty
round again, they'll be their lowest I think in about
four years, so that would have probably been doing the
pandemic there were anything like where they are now. I
don't know how much of a difference it makes to

(00:51):
your life. It might make a huge difference if you
run a transport company, if you move things around, or
if you're moving children around all the time. For many
other people, probably not that big a difference, but even
so just does show how things are trending. And of
course it's got very little to do with us, except
that our currency is improving and that has played a factor.

(01:12):
Fascinated by this new deal with ninety one and a
sun Lum. We'll speak to the CEO at ninety one,
Hendrick de toy in just a moment and sort of
ask him how that's all going to work. It did
close today. Finally, I'll also slip in a question about
what he would like to hear from the President next week.
How do we keep the sort of optimism that everyone's
talking about going. Lots of talk at the moment about

(01:34):
the electricity industry or fin twenty four more reporting about it.
There'll be a big meeting with government and lenders and
all the rest. I think there's already been one in fact,
then try to sort that out. It does look like
that's getting more and more complicated. Also numbers today the
abs A PMI, the Purchasing Managers Index, showing that more
people are sort of a bit optimistic about the future. Essentially,

(01:55):
we're seeing that business activity is rising and what that
I think means for the future. We will speak to
the Financial Intelligence Center. They're acting director as Peter Smith.
It's a little technical, but as I understand it, at
the moment, only SARS has the ability to conduct a
lifestyle order on you. So if, for example, they I

(02:17):
put on on Instagram or somewhere that I am driving
a new Lamborghinian and I've put pictures of that, they're
adible to say, hmm, we don't think he gets paid
quite that amount of money. Let's go and have a
look at his bank account. So we're going, you know,
and the go and investigate from there. The Financial Intelligence
Center going to get the same kind of power. But interestingly,

(02:39):
the process would seem to start with any organ of government.
So for example, the mayor of Johannesburg could decide, I
want to know what Stephen Critis's finances are and ask
the if I see to do that, can you imagine
how that could complicated? That could get Now I can
understand the argument, Steven's a contractor with Joe Berg. We
want to know if he's getting kickbacks or paying kickbacks.

(03:00):
But what if they use it for other means. We'll
talk to the Financial Intelligence Center about that. I think
that's going to be important. Have you ever wondered why
you feel at home when you go into some places
and not when you go into others. And why it
is that you'll see a brand and just sort of
feel a little bit better. And let me just say,
every time I see Jamie Oliver, I feel worse because

(03:20):
I really am not a fan of Jamie Oliver. But
we'll speak to someone who's actually spent her life looking
up the science of that loyalty, Amanda Cromote as a
founder and CEO of Truth from seven thirty. If you
miss it tonight might well be worth going back and
listening to the podcast. When do you think the Financial
Intelligence Center should be able to look at your finances?
What would trigger that? In your view? Would it be

(03:42):
you doing a deal with government, as we've seen so
many sort of crooked deals it seems with all of
the inquiries. Would it be something else? O double one
double A three oh seven two two one four four six,
O five six seven and O seven two seven oh
two one seven oh two. When do you believe someone
should be able to conduct a lifestyle? I'll audit on
you tonight eleven after six.

Speaker 3 (04:03):
The Laney Show with Stephen Krudis Live on ninety two
point seven and one six FM streaming on the Prime
Media Plus.

Speaker 1 (04:11):
NAP and DStv channel eight five six.

Speaker 2 (04:14):
Well, the completion today of that massive transaction between ninety
one and Sunlam Investment Management, ninety one Limited now owns
all the shares and Sunlam Investment Management Proprietary Limited. The
move also means ninety one will be the primary active
investment manager for Sunlam's local and global product Sunlam appoints
ninety one as a permanent manager for Sunlam's investments UK.

(04:36):
There's a lot to it. Hendrick De toy is the
founder and CEO at ninety one. Hendrick, Good evening. I
do appreciate the time. I'm sure it's been a long
day and it's been a long road to get here.
You must be breathing a sigh of relief that it's
finally all done.

Speaker 4 (04:50):
Good evening, Stephen and listeners. Of course, it's been a
long road. I think this started in late twenty in
twenty twenty three, actually first discussion, and we've reached it
now late twenty twenty three, an hour in the beginning
of and on the second of February, and many people
who listen will remember the importance of the second of February.

(05:13):
Second of February nineteen ninety was when FW Mclark made
his famous speech which changed our country for the better.

Speaker 2 (05:21):
That's an interesting date to tire to enric so your
strategy from here, you actually have another I think four
hundred billion rounds worth of assets to manage.

Speaker 4 (05:32):
Are you approximately four hundred approximately?

Speaker 2 (05:34):
I mean at that point, you know, give or take.

Speaker 4 (05:37):
Maybe a little more with the market lately, but roughly yes.

Speaker 2 (05:41):
Are you expecting to make any major change in strategy?
I mean I presume they won't be much change at first.

Speaker 4 (05:48):
Steven, We've had a long time to prepare and therefore
everything that had to be done in a sense has
been done, and we had lots of negotiation with the
Commission as well. All our commitments have been made. So
for us, for the clients of Somelm Investment Management, the
perstwhile clients of Somelm Investment Management, this is business as usual,

(06:10):
except supported by a far stronger platform, and therefore they
should expect to benefit.

Speaker 5 (06:18):
We have.

Speaker 4 (06:19):
Ninety one, on the other hand, has gained some very
good people from the sun Lum Investment Management team. We're
all very motivated. I walked past their desk today motivated
to do great new things with us, and in particular
where the platform the two platforms are, the combined platform
is much stronger is on the fixed income side because

(06:41):
they had some different skills from us, and we're very
excited to take some offerings not only to the sun
On client base, but also to the market, the third
party market out there.

Speaker 2 (06:54):
I mean, I presume you've had no one who's been
a client of some them for years saying I'm taking
my money out. I don't like ninety one. I mean,
people are going to keep it there and they're going
to hope to reap the benefit.

Speaker 4 (07:05):
In fact, we've had support additional support from certain clients.
There were one or two areas where there was an
overweight issue i e. Where they were too exposed to
both firms, where one understands that people could prepare to downweight,
but nothing quickly. And of course the soul of investment
management team business was predominantly funded by either the Sun

(07:30):
and balance sheet or the sub distribution network, so of
course that comes along. There's a great deal of commitment
from the Slalom management team and leadership team to support
they now preferred active investment manager which is ninety one.
So we've felt we have good support, but we think

(07:51):
the real story is about what happens over the next
a decade or two, because it's a fifteen year deal,
but we see it as a as a partnership for
a very very long term, as we see all our partnerships.

Speaker 2 (08:06):
So I was going to say, I mean, the deal
goes for fifteen years, what happens after that? You would
prefer what do the EU call it? Closer and ever
closer union?

Speaker 4 (08:16):
Now, I think in this case, as with many of
our clients, you know, it's also the day at which
ninety one term thirty five years old. Second of February
nineteen ninety one we formally kicked off. So we've been
around for thirty five years and I've been privileged to
be around since the beginning, and I can tell you

(08:36):
we have very very long client relationships. We always built
for the long term. We work with our clients for
the long term, and we hope that in fifteen years
that's on our management say this was the best thing
we've ever done. They've already made good money. They received
shares in ninety one which have gone up substantially since
the deal was announced and the terms were agreed, but

(08:58):
that they say our business is stronger and that we
have a better active investment offering to give our clients,
and therefore we want to continue working this way as
opposed to the way we previously work by trying to
own a business like that one hundred percent and maybe
not achieve all our objectives. So we hope this partnership works.

(09:21):
And of course SANDOM has always been a large, clear
client of ninety one's and now it's just a bigger client,
and we hope to grow with them as they should
grow with us.

Speaker 2 (09:34):
I realized you won't want to focus on the negative,
but I mean it would be I imagine after fifteen years
quite difficult to unwind it.

Speaker 4 (09:43):
That's not a negative, that's a great positive for ninety
one because we want to keep our client. So exactly,
you've hit it, you've hit the nail on the head.

Speaker 2 (09:52):
Okay, well then they're be stuck with you one way
or another, by the sounds of it, but happily so hap.

Speaker 4 (10:00):
Happily partnered as is our other should be our other
large relationships, because in the end, what's happening in the
South African market, I think that's important to understand because
we haven't been creating as many jobs as we should
have been. The formal what we call the institutional industry

(10:23):
i e. Pension funds have not been growing as fast
as possible, but individual savings and discretionary savings have been.
This is a way for ninety one to participate in
another sector where individual savings are growing. We tend to
operate at the up end at the wealth management end,

(10:43):
but not as strongly at the insurance end, and therefore
this is a big opportunity for us.

Speaker 2 (10:49):
Hendrik, I'm glad you talk about jobs because I didn't
want to ask you. The President is giving a State
of the Nation address next week. We've seen a lot
of optimism about South Africa. I mean, apart from today,
the JC really speaking has been doing very nicely. What
would you like to hear from President Samopause the next week?
To keep this optimism going? Where does government, the coalition,

(11:10):
all of the people involve need to focus next.

Speaker 4 (11:14):
Stephen What we'd like to hear which I've been encouraging
our leaders to talk about for the rest of the year.
Not long list of objectives. It's a small number of
things that we have to write to get right. What
are the must win battles? I mean, clearly, the mud
Longer Commission is giving us enormous food for thought, and

(11:37):
the must win battle is we need to get corruption
under control. We need to get our security services and
our law enforcement agencies working properly, and very importantly, we
need to make sure the country's business friendly and ultimately
the citizens can live and go about their business safely.

(12:00):
If we start doing that, we can think about foreign
affairs where we have huge room for improvement. We can
think about more ambitious projects. But interestingly, there is a
scenario planning exercise coming out which in nineteen ninety one
there was a scenario planning exercise done in Montfleur which
guided the incoming government. There's another one coming which will

(12:24):
driven by the Bureau of Economic Research, which I think
will give our political leaders very very clear guidance on
what they should not do and what they must do,
but for Heaven's sake, we should do.

Speaker 2 (12:38):
Do you buy all the optimism hend record? Do you
have a little bit of cynicism about it now?

Speaker 4 (12:43):
I mean the optimism was largely driven's by two things. Firstly,
the international markets completely ignored South African assets that become
too cheap. And then I think the man at the
moment last year as a governor of our central bank,
it's getting a bit of flat that he didn't cut
this week, but Lesta drove Gonyago drove interest rates or

(13:06):
inflation down. With my setting new expectations, that stability is
attracting foreign capital in the debt markets, that has strengthened
the rand, that has created interest in the equity markets,
along with a commodity boom boom we've seen. I think
all of those are good things, but we didn't create

(13:26):
that wave as a as a as a as a government,
or as a nation. We must now jump on this
wave where price stability is expected, where macro stability is appreciated,
and start doing the things that create profit growth and
jobs growth that will ultimately sustain the government, the fiscus

(13:50):
and will sustain employment to allow people to move ahead.
So I think I would like to see very few actions,
but clear action in the sonar that we can deliver.
And let's let's let's aim for some simple wins rather
than lofty goals of five percent of growth. We're we're
at under two percent growth. We need to just get

(14:12):
ourselves back to three percent and then life will be
It'll be easier to plan from there, and I'm confident
that that is possible, particularly if our G and U
starts functioning as it sude as it should.

Speaker 2 (14:24):
Henrik to Toy really appreciate the time on that, Thank
you very much. Indeed, Hendrik to Tooy is the founder
and CEO at ninety one The Money Show.

Speaker 1 (14:33):
With Steven on seven O two seven.

Speaker 2 (14:36):
Two twenty one minutes after six. Well, let's pick up
on the story. Optimism. Business conditions appear to be improving,
the abs of Purchasing Managers Index rising to forty eight
point seven points in January from just forty point five
in December. Still below the fifty mark, but still a
lot better. Selo so kele Listney economist that abscess cib

(14:57):
or absume economists, I should say so, all good evening,
Still below the magic fifty mark, but still the big
jump in the index.

Speaker 5 (15:05):
Thanks for having me, David, always a pleasure speaking to
you and your listeners. Yeah. So we had a very
positive start today, especially given where we come from from
the end of the last year where we saw the
PMI really declining by a lot so when you look

(15:25):
at the Genuary data, the PMI increased by eight point
two points to fully eight point seven points. Yes, it's
still below the fifteen years old mark, but we take
easy wings where we can. And when you look at
the bean drivers, the increase was was quite broad based.

(15:49):
So actually one of the induses went about fifty, which
is the index that tracks output, so that basically says
that out would growth accelerated at the start of the year.

Speaker 2 (16:03):
I mean, as you say, the business activity index, I
mean that clearly tells us that something seems to be
moving in the economy. He says, hopefully.

Speaker 5 (16:12):
Yeah, looks as I normally say, it's just one fold
we'd like to see, you know, sustainable improvement before we
can infer any sort of strength to the sector. But
look at the start today is good, and we are
expecting a good year in terms of economic growth. I mean,

(16:35):
we have a very strong at least compared to CONCERNSUS
forecasts for growth. They say, we have one point nine,
which is growth that we haven't seen I think since
around twenty fifth, twenty to fifteen. And this compares to
the one point four that we saw last year.

Speaker 2 (16:56):
It does seem according to your survey, it's some problems
with exports. So I mean, what's happening there. I mean
six months ago would have said, is that Trump terras?
I don't know if Trump terrors are having that big
an impact on us now.

Speaker 5 (17:08):
Yeah, So in terms of experts, the story, yeah, seems
to be more on the rand strengthening. So because the
rand strengthened by a lot since the end of last year. Now,
in terms of innings, I have had expert expert in US,
but at the same time you have importers that are

(17:32):
sharing right because the rend has improved, improved a bid
and also for inflation peoples. Is you know, although we
saw a bit of a tick up in the index
that measures input costs in the manusacturing sector, I mean
it remains quite quite subjute thanks to the stronger range.

(17:53):
So you know, this end is hating experts US, but
you know benefiting as an inflation.

Speaker 2 (18:01):
So I mean, do you think that a stronger rand
is maybe improving optimism? I mean they expected business conditions
in six months time. How's that looking?

Speaker 6 (18:12):
Yeah?

Speaker 5 (18:12):
So that's star Ran. The story is quite interesting obviously
to your previous speaker here, uh, and I want to
say that let's not underestimate the role that a weaker
dollar has played here. Yes, essays fundamentals have improved. I
mean we're seeing reforms moving the right direction, and one

(18:36):
of the notable reforms that has pushed the rent in
the right direction is one where we move to a
lower inflation target, as your previous speaker noted. So that's
that in terms of the rent. And then in terms
of what manufacturers expecting in about six months time, yes,

(18:58):
we saw a bit of with decline, but in level terms,
so we're looking at the levels that are stronger than
what we saw on average in twenty twenty five. So
expectations are still quite positive.

Speaker 2 (19:12):
And sellos K, thank you so much. Really appreciate it.
The absoure economists there, just interesting to see the optimism. Saiddle,
thank you. Twenty six minutes after six the Money Show,
Sanamonga's portfolio manager from old Mutual Investment Group Tana. What
were you and I always talking about precious metals at
the moment, but certainly this morning disaster and then quite

(19:35):
a long day of recovery.

Speaker 7 (19:37):
Hi, Stephen, and then good evening to your listeners. I mean,
this disaster started on Friday when we saw you know,
the all the games that we saw in the precious
metals you today just wiped out. And you know, there
was the key question, is this the beginning of the end?
And I suppose there's been a few jitterism in the
in the market that could have driven some of these

(20:00):
you know, precious metals declines and you know those chat
there's chat about Kevin Walsh been nominated as as the
next fit chair. He is more hawkish, so you know,
the markets believing the user is going to have a
tightest dance on inflation. Hence tariffs could have been a driver.
But I think what we saw in SOO Friday is
actually the CME changing the mechanism around the margin calls

(20:23):
from a six dollar margin call to a t more
of a flexible or floating mechanism, and that created a
liquidity event because you know, as prices rise, the margin
call required increases with that. And I think we just
saw you know, speculators in the market trying to cover
their positions, and also saw some regulatory intervention within China,
particularly in the silver market. But I think all of

(20:45):
this sort of just created once again an opportunity for
investors who who want to get into the precious metals
for the more longer term structural underlying demand drivers.

Speaker 2 (20:58):
Yeah, I see what you mean, shop right. They I
mean in their six month update today up until December
an interesting comment about how they're keeping prices down, and
I mean, I think their inflation over the six months
was two point seven percent install inflation, I mean, and
that's working for them, right, I mean, it must be
putting so much pressure on their supplies, but people are

(21:18):
going back to check us.

Speaker 5 (21:19):
In shop right.

Speaker 7 (21:21):
I think. I think that's also part of the reason
why in that update the mission that they've grown two
point three times ahead of a head of the market.
It's this promotional activity that they can do to sort
of maintain that revenue growth. But I think another way
to look at it is just you know, unpacking everything
against client to see what's actually happening with volumes, especially

(21:42):
when you compare it to the release release update. I
actually thought it was more of a mixed of a
mixed update given the deflection towards the back end of
the year. But you know who we've I was listening
to your previous qualers. Now it's been a tough it's
been a tough environment for the South Afrin consume and
we've seen it with the with the retail updates and recently,

(22:05):
but we're hoping for you know, again the wind for
from the precious metals to help alleviate that. From this
good point of view.

Speaker 2 (22:12):
Yes, and then Pepcoll today also quite a strong result
from them, and we've sort of come to expect that.

Speaker 7 (22:18):
We've come to expect that, but I mean it's also
a little bit of a slowdown and really new growth
given the high base of last year.

Speaker 5 (22:25):
But I mean it's it's a this is a very
very strong company.

Speaker 7 (22:27):
They've had lots of the quisitions last year, but they're
still showing quite decent like for like growth, but particularly
within the centic division where we saw increasing in credit
sales and that model seems to be doing quite well
for them.

Speaker 2 (22:42):
Indeed. Tona Mangay, thank you so much. Really appreciate the
time portfolio manager from old mutual investment groups so much
to say about some of what's happening in CHOPWRIGHTE and Pepcorf.
You consider the really big role they play in our
society nowadays. See with the money show, it's just one
six point.

Speaker 1 (22:56):
Thirty seven to seven two one.

Speaker 2 (23:02):
Twenty one minutes to seven the time. So I was
thinking and just going through some of the results from
a Shop Right today, and we all know kind of
how well they've done. This is what they say about
their liquor sales. So they've got two sets of liquor shops.
One is from Shopright, one is from Checkers. The Shop
Right liquor shop increased their sales by ten point one percent,

(23:24):
and six months to the end of December, the Checkers
liquor shop, we're up by twelve point seven percent. Now
here's my question. If you're moving booze at the rate
that Shop Right is moving booze right now, and then
you increase it by let's just call it ten twelve percent,
where's it all going? Who's drinking it? And And I

(23:44):
realize that there's several things I think happening in the
alcohol industry all at once. The one is that where
they can, some people are trying to keep the price
of things like some beers really quite low basically to
keep people drinking. Proposes what you do if you of
moving a sort of fast moving consumer good or whatever
you want to call it. I think something else is

(24:05):
happening too, which is everything I read tells me. And
you see this if you go into into bottle stores
or so I'm told that certain whiskys and sort of
more expensive liquors like that, there's a whiskey oversupply at
the moment. Whiskey and oil, what do they have in common?
There's too much of them, and that's why you see
some incredible value for money specials. Things that people wouldn't

(24:25):
normally be able to buy suddenly are much cheaper. So
I don't know if that's pushing up volumes. I do
have a couple of other questions, though, So people are
clearly buying it, clearly they are drinking it. Are we
seeing increases in the amount of alcohol that people are drinking?
There was a time it was believed in South Africa
that only about a third of the population actually had

(24:46):
ever drunk alcohol, and so one third was drinking an
awful lot. But I think that's been sort of disabused now.
The second thing is that around the world and many
other markets, people are drinking less alcohol per person, and
yet that doesn't seem to be happening here. And I'm
not sure, but it is very interesting to see what's

(25:06):
going on it their messages while I'm talking about this,
saying there's a sort of class of people that are
buying very expensive oldcol So it's not more alcohol being sold,
but it's the type of alcohol at premium. Hey, maybe
you're onto something there, especially if something that you thought
was out of out of your price range suddenly is
within your price range even though it's still quite expensive,

(25:27):
maybe you will buy it there. But what is driving
this huge increase in what's happening to the smaller local
liquor stores? Are they just going to the wall because
of shopwright, checkers and others? There are many of others
that can pay as well. Of course, your faults please No.
Seven two seven two one eighteen minutes to seven.

Speaker 3 (25:44):
The Money Show with Stephen Kruti's Live on ninety two
point seven and one o six f M streaming on
the Prime Media Plus NAP.

Speaker 1 (25:53):
And DStv channel eight five six.

Speaker 2 (25:56):
Well, just waiting to hear your views on the situation
around what happened. Of course, when you look at how
much alcohol is being sold from some of the bigger
outlets now, does seem that their numbers are increasing? Oh
seven two seven oh two one, seven oh two. I
had a situation the other day, so I recently had
a puncher and this is one of those things that's irritating.

(26:19):
It's not as irritating as it used to be because
instead of having to stop on the side of the
road forever and ever and ever what you were, what
I was able to do is just sort of get
myself to a petrol station, pump it up, and they
very helpfully put in a plug and it costs you know,
one hundred hundred and fifty round nothing like. It's not
a huge drama. But at the end of the operation,
the person who did it, and they've done a very

(26:41):
good job, said to me, you can't pay for it
with your card, so for me it means I can't
pay for it with my phone. They required cash, and
I had no cash on me. The ATM at the
petrol station for some reason wouldn't give me cash. And
we had a long discussion because you want to give
the person cash and you want to sort of sort
it out. And then the end we agreed on e

(27:01):
Wallatt and everyone walked away happy. Was probably happier because
it had saved my day. That certainly we were all
very happy. Well, how often you come across a situation
like that nowadays where you can't pay in the way
that you would normally expect, and for something that really
does have to be paid for now can't be paid
for tomorrow. What's happened in that situation? How did it end?

(27:22):
Seven to two at one seven two or seven two
seven oh two one seven o two.

Speaker 1 (27:28):
Seven oh two with Stephen Kritis Email him on Stephen
at seven o two dot co dot z.

Speaker 2 (27:36):
We're more reporting today suggesting the Financial Intelligence Center is
going to get the power to learn a lot more
about your personal finances. At the moment, the only organization
that can really conduct a lifestyle audit on you is SARS.
You'll have heard of the amusing instagram to see is
driving a Lamborghinea. Their investigations will then go from there.
Now under the General Laws Amendment bill that's going through

(27:57):
the public consultation process, the Financial Intelligence Center, which already
monitors money flowing into and out of bank accounts, would
get the same kind of power. Peter Smith is the
acting director of the Financial Intelligence Center. Peter, good evening,
thank you for your time. You already have some useful powers.
What kind of power would this give you, Peter Smith,

(28:21):
I don't know if you're there or if perhaps you're
not able to hear us. I understand was there a
moment ago. It seems to have disappeared. Now this does
happened sometimes in zoom. We'll try and get him back
in just a moment and just see if we're able
to see if we're able to get him back in

(28:41):
the meantime, let's hear from the head of forensic at
EANs Evehn good evening. From what I can see, this
would basically mean that the Financial Intelligence Center could be
asked by any organ of government to conduct a financial
audit on me and go from there. Is that the
right interpretation of the proposal.

Speaker 8 (29:00):
Is the right interpretation, Stephen. And what it gives the
state is the powers to proactively investigate suspicions of money laundering.
And you'll recall from the gray list in one of
the criticisms by the FCTF was that South Africa is
not doing enough proactively to identify and investigate money laundering.

(29:20):
So this essentially is designed to cure that criticism. And
there's a spate of changes that have been introduced by
the new legislation.

Speaker 2 (29:29):
Okay, would they be able to just decide, well, that
was unexpected. I have to tell you, Steve, and I
gather that didn't come from you.

Speaker 8 (29:40):
No, absolutely not.

Speaker 6 (29:43):
You know, it would have been surprised, but it would
have made things more interesting. Okay, we are trying to
get hold of another guest on this channel who's supposed
to join us from the Financial Intelligence Center. There's something
that's probably gone wrong there. Let's get back to our
boring subject. Are we compared to that? So what would
it mean that the Financial Intelligence Center would be able
to just decide we want to investigate Stephen Curtus for

(30:07):
the purposes of clarity or could they have to be
asked by someone to investigate. I think they would need
to be asked by a government entity, and this includes municipalities,
government departments, and when asked, they will then provide this
information to whatever investigating authority requires this information to pursue

(30:31):
a potential investigation where someone's lifestyle is not commensurate to
the cleared income. And what we must always remember is
that the lifestyle audit is a red flag audit. It's
not evidence before a court of law. It just signifies
that someone is potentially living beyond their means, and then

(30:52):
those bodies will have to do some investigation.

Speaker 8 (30:55):
Nobody is going to be prosecuted by then a disciplinary
process when the criminal court, unless the state has the
ability to prove whatever concerns they are that emanate from
the lifestyle audit. So what it does give the state
is the ability to proactively investigate suspicious lifestyles unexplained. Well,

(31:17):
so you know, if you've been driving a Ferrari for
the last few years and you're declared income to SARS
is less than half a million a year, those are
the types of things those individuals need to be very
nervous because this is going to give the power to
state to take these further. It is something that SARS
has been using for quite some time, so it's not

(31:38):
novel in that respect, but it just goes a lot broader. Now, Stephen, Stephen,
I'm going to ask you to just stay with us
for a moment because I do want your view and
I want to continue this. But we are joined now
by the acting Director of the Financial Intelligence Center, Peter Smith.
A Peter, good evening. I'm glad you've been able to
join us. Sorry about the technical difficulties we've heard from
Stephen Powell how the important this could be for you,

(32:02):
the ability to conduct a financial audit on someone. If
someone is being investigated, if there is an order being
conducted on them, would you have to tell them first?

Speaker 7 (32:14):
Good?

Speaker 9 (32:14):
Often INSTI myropologies that I could enjoy a bit earlier. No,
I think just a bit clear at the moment as
the law stands now, if I see is within its
powers to conduct a lifestyle audit, if it's done in
following up a suspicious trail of money flows, or for instance,

(32:35):
where we've had reports of suspicious activity and as part
of our analysis and following the money, we could also
include doing the lifestyle audit in respect of that person,
and that information would be made available for further investigation
to our investigating authorities. What we cannot do at the
moment is do a lifestyle audit. For instance, where an

(33:00):
entity wants to employ a person, they first want to
do a background check, so there's nothing suspicious about the person.
But for other reasons, an authority they want to have
more information about either people in their service or people
that they may want to employ, et cetera. And in
those instances we cannot currently do a lifestyle audit, but

(33:22):
the proposed amendments allow of the FOC in such instances
also to conduct a lifestyle ordit.

Speaker 2 (33:30):
Okay, So, if for example, I was going to work
for the City of Johannesburg, they can conduct They could
ask you to conduct a lifestyle and audit into me.
Could it also mean they could investigate that you would
be able to investigate my partner, or my brother or
someone connected to me.

Speaker 9 (33:49):
They would first have to obtain your consent for that,
and they would have to obtain the relevant information from
the person who will be the same trick of the
lifestyle order that I would be made available to there.
If I see that, we would then be able to
compare with other information at our disposal to as mister

(34:09):
Ballat say, just earlier, to see whether the person's ostensible
income supports the lifestyle that they lead, and that information
can then lead provided to the entity that requests from us.
We would not inform the person that we're doing a
lifestyle order. We would leave that to the entity that

(34:32):
requests the lifestyle orders from us and to be the
incumbent on them to inform such a person that this
is being done, because that they would have to have
at least a person's cooperation and if not consent for that.

Speaker 2 (34:44):
We have seen situations in South Africa where there's a
judicial process and there is a sitting judge who basically
monitors the eavesdropping by police, right, And we've had situations
where people have gone to the judge and said we
need this number, we need to be able to hear
this person's conversations and they have given a particular person's ID,

(35:06):
but it actually turned out that the phone number they
gave them was that of an investigative journalist. And the
reason that I say this is that there are lots
of ways that people can abuse the authority that such
an intrusive power could give them. What safeguards are there
to make sure something like that doesn't happen. And yes,
you wouldn't with financial documents necessarily be able to give

(35:28):
wrong ID numbers because then it wouldn't work, But you
would be able to. I mean, I can just imagine
someone in a council and we've all seen what's been
happening in the SAPs recently, someone in any government agency
deciding they want more information about someone and finding a
way to get you to do their dirty work for them.

Speaker 9 (35:50):
Well, firstly, we would have to be convinced that the
entity that's requesting the orders from us as a legitimate,
legitimate interest in doing a lifestyle that interestinct of that person,
So they would have to be a prior relationship that
they would have to demonstrate before we will go to
the to the extent of carrying out a lifestyle order

(36:12):
if it's not in the context of us working on
something that is suspicious and we're we're following flow of funds,
so we would have to apply our judgment is there
if I see on a case by case basis and
ensure that in every case that we are requested to
do so that the entity that is making that request
of us legitimately has an interesting in carrying outter life

(36:34):
stole order. We would also want to have confirmation that
the person is aware that the lifestyle order is being
done and that the information that we are working with
was obtained from that person, and that those are privacy
issues that we would have to respect and that could
apply in terms of the protection of person information actual instance.

Speaker 2 (36:53):
Peter Smith, thank you. Acting Director of the Financial Intelligence Center,
Stephen Powell had a forensic still on the course head
of forensic at ns. So much money nowadays is flowing
around through other means, is there a risk that this
kind of power will result in people leaving the formal
banking system and moving their money around crypto or moving

(37:15):
their money around through tether or as something else. Even
if it's not that I'm a bit concerned about the
law of unintended consequences.

Speaker 8 (37:24):
Absolutely right, Stephen, and you're right to be concerned. And
I think a lot of the criminals that we investigate
as forensic units already make an extensive use of crypto
and other platforms to try and evade scrutiny. But one
of the areas where the fight, if we're also very
concerned and concerned not only with South Africa but globally,

(37:47):
was the way that crypto was being abused to facilitate
money laundry and for drug cotails to move money across
borders with absolute ease and limited control. So what we
have seen over the last number of years has been
extensive regulation of crypto itself and you'll see that some
of the mainstream banks, that the traditional banks, are starting

(38:10):
to embrace crypto as a mechanism for payment. And I
think we've seen massive regulation to try and control those abuses,
So you're right, there is a risk that the criminals
will move to those types of platforms. But at the
same time, regulators across the board are clamping down on
the abuse of crypto So I think it is something

(38:32):
that the authorities will are aware of and they will
be taking steps to try and monitor and make sure
that they address the money lau drend risk. Remember that
what has been proposed in terms of the General Laws
Amendment Act was critically needed because we see that it
changes things like the Nonprofit Organizations Act and NPOs have

(38:54):
been abused. We can see that there is evidence which
reflects that terrorist organizations cartels, we're using nonprofit organizations with
limited supervision, limited disclosure of beneficial ownership. So a lot
of these amendments that have been introduced by the changes
in that are proposed in the bill are designed to

(39:15):
address these very weaknesses that fight IF had identified, and
we are about to be reassessed by fight IF later
this year they'll conduct another peer review. So we've got
to make sure that we don't rest on our laurels
and we ensure that we are implementing everything that we
promised the fight if we would be doing and the

(39:36):
proactive identification of fraud, corruption, money laundering was one of
those promises, and I think it's quite useful that we
passed the bull and we are going to be able
to demonstrate to fight if implementation of some of these initiatives.

Speaker 2 (39:51):
Stephen, thank you. Stephen paralhead of Forensic at NS. Peter
Smith is the acting director of the Financial Intelligence Center.
Your View seven two one, seven oh two.

Speaker 1 (40:03):
And now The Money Show with Stephen credits on seven
oh two, next Walk litt All.

Speaker 2 (40:09):
The Money Show with Stephen Curtis is brought to you
by ABS of Corporate and Investment Banking, Balancing economic growth
with ecosystems. That's how they're invested in your story. Eight
minutes after seven, Well, in a moment, I was struck
by the way when I was going through my email
this morning and I saw an email from Currency News.
They're one of the many news services I've subscribed to.

(40:32):
You ready must subscribe to as many as you can,
And there was confirmation of the deal they've struck with
Apex Publishing, and essentially this means that now several groups
will be working together, so Currency News, Financial mail and
Mining MX altogether. Speak to Rob Rose. He is the
co founder of Currency News. I'm not sure if he

(40:53):
keeps that title or not. We'll have to ask him
in just a moment. He's been involved in plenty of
other things through the years of We will also hear
from Ian man our book reviewer, looking at the book
Money by David McWilliams. The thesis of a design understand
it is that humans are humans because of currency. And
if you think about it, you come across a stranger,

(41:16):
stranger wants to give you something, you want to give
them something. Without the invention of money, there's really no
way to do it. Bartering, yes, but it's so limited.
And currency, whether it's seashells or whatever, it is, the
ability to exchange something for something to something else. All
of those things really did create kind of humanity as

(41:39):
we know it. And then from seven point thirty I
don't know if you do this, but if you feel
loyal to particular brands and not to others and the
science of that. Amanda Cromhertz mand it a sort of
life mission done very very well in it, try and
sort of work out how and why that is. Find

(42:00):
it really very interesting good year from you double one
A three oh seven oh two two one four four,
six oh five six seven, and of course voice notes
this evening on seven two seven oh two one seven
oh two. Very interested in your view and that conversation
with the Financial Intelligence Center. But when do you think
they should be able to look at your money? And
would it just be I mean, I am deeply I

(42:21):
always get worried about these things because we've seen how
often they can be abused, these powers, and look what
was happening in the police and the SAPs and all
sorts of things. And I believe the Financial Intelligence Center.
I have no reason to question any of the people
there or the work they've done. I just think we
kind of need a future proof. That's really what worries me.
We need to make it, actually, we need we need

(42:43):
to make sure that we can understand who can access
our money and who can't in our financial information. Eleven
after seven, The Money Show.

Speaker 3 (42:51):
With Stephen krudis live on ninety two point seven and
one o six FM, streaming on the Prime Media Plus NAP.

Speaker 1 (42:59):
And DSTVA channel eight five six.

Speaker 2 (43:01):
Well confirmation Now several of the bigger brands and financial
journalism in South Africa under one roof Apex Publisher. Apex
Publishing Enterprises has purchased Financial Mail, Currency News, and Mining MX.
In other words, they're all going to be owned by
one company. Rob Rose is the co founder of Currency News.
Rob good evening. You are part of the group that

(43:22):
formed Currency News my sense of news. You quite like
the independence. Why were you happy to be bought in
this way to join this group?

Speaker 8 (43:31):
Yive?

Speaker 10 (43:31):
Nick Stephen, Well, I mean, I think it's a good
deal in that. What it does is it gives you
the power of living up existing brands like Financial Mail,
which is, you know, sixty five, sixty six years old.
I mean it's been around since nineteen fifty nine, has
a good, formidable reputation, and we know the people there,
we work there, and essentially it allows you to punch
above your weight. I think, I mean, if the power

(43:51):
of a whole lot of media brands coming together, you
can do bigger things.

Speaker 2 (43:56):
I hope you are the editor there for a long time.
They've had a new there for a while. You're going
to be all right in the same newsroom together.

Speaker 10 (44:03):
We got on really well. I mean Mark Custinson has
been aired to Financial Mail. He's fantastic. Yeah, we work.
We've spoken a lot, you know, the last couple of
years frequently, so it's a you know, it's a cultural fit.
I mean, we work well together. And I think that's
fundamentally the vision that Apex had was to build you know,
excellence in journalism, excellence in business journalism. And I think

(44:24):
that that's a that's a difficult world. Costs have been
cut dramatically and advertising spend is reduced. So if you
have somebody who believes in funding this vision, putting it
together and take it to the next level, and I
think that's a that's a compelling strategic fit. I think
between these titles, how.

Speaker 2 (44:42):
Is it going to work? Is there going to be
one sort of newsroom, physical or virtual? Are you going
to keep your different identities? I mean you've put time
and money into building currency news at David mckaye's put
time and money and pretty much a whole career into
mining MX. He's done incredibly well with Financial Mail. Is
the brand that is Financial Mail obviously the brand stay.
But how are they gonna ho Are they gonna run
under the hood?

Speaker 10 (45:04):
Yeah, I mean I think that's something that's going to
be worked out, especially with regard to digital strategy. You
have to decide how you're going to do it for
three of them. But in a sense they are all
financial media outlets, but they have distinct identities. Currency is
primarily a digital daily news offering it you know, writes
daily news every single day. We have podcasts and that
sort of thing. Financial Mail is a weekly magazine primarily

(45:25):
that has done I wrote today, that's done remarkably well
over a decade. It actually increased its its circulation, which
is unheard of in the print landscape. And mining ems
covers mining news better than I think anyone does. So
you found sort of three pockets of excellence that are
that are varied enough I think to make it so
that you're not replicating each other's work, but they have

(45:46):
enough enough overlap to allow you to work well with
each other. You know, we can use we Mark write
something on you know, a company he likes, we can
use it. If it's a daily story. When we write
something he likes, they can use it In Financial Mail.
I mean, there's a lot of ways to do things
better and more optimally. I think to maximize the output,
and I also think what you need to do with
these brands in a world of massive social media presence

(46:09):
is you need to maximize the impact. So it allows
us to kind of put the story out there and
I think make a bigger impact with what we're doing.

Speaker 2 (46:16):
Are you then, as the head of Currency News and
you know's David McKay at mining MX and all the rest,
are they going to are you going to be paid
employees or is it going to be a different relationship
in some way?

Speaker 10 (46:29):
Well, I think the brands at this point are going
to stay distinct. Are they going to you know that
Apex's vision is that all the brands stay their own way,
and I think the individuals stay as well. And you
kind of, you know, you keep doing what you currently do,
you will be paid employees. I mean, it's back to
doing what we did before we started currency. So it's
a I suppose it's a world that we all started

(46:52):
in and we all kind of know how it works.
But yeah, I mean, I think, you know, Stephen, you know,
media is a difficult space and I think somebody who
who is willing to put the kind of the name
and the wallet behind something that can take it to
the next level is very rare in the world. Of media,
and I think it's an optinuy. We just couldn't turn

(47:13):
it on.

Speaker 2 (47:14):
I mean I kind of need to ask, you know,
do you believe it'll be possible for APEX to make
money out of this? And you automatically have to say yes, Rob,
because this is a position you found yourself in. But
I sometimes wonder about the position of financial journalism in particular.
I mean, you know, the great example, of course, is
the Financial Times. It seems to be doing incredibly well.

(47:35):
The same it is true of the economists in the
New York Times, but that's because they've kind of hoovered
up everything. If you like, you could argue, I would say,
and I'll get into trouble for saying this in some
quarters that News twenty four is playing a similar role here.
It's the kind of big winner. I should declare at
this moment that I work for Daily a meverick and
say they're excellent. But News twenty four has done just

(47:59):
the most amazing job. So the question becomes, then, is
it possible for other players to do well as well?

Speaker 10 (48:07):
I mean, I totally believe it is. I mean it's
not just example the Financial Times. It proves you can
make a success of business media. But you know, you
look in a micro sense, you look at David McKay's
organization mining e X. Now, David has been basically profitable
from you know, it's in the first year currency news.
We had our first cash positive month last September. So
I absolutely believe it's possible to do it. APEX believes

(48:29):
that the media hasn't been run optimally with a great
commercial sense about it, and there's ways to do it
much better. And I think that there's huge truth in that.
I think that I've seen and you've seen media houses
do things very badly from a commercial sense over the
past twenty years, and you've often thought, well, they didn't
do that, they didn't focus on this, they could have
sold this better. I think there's massive scode to do

(48:49):
things better. And I do think absolutely the fact that
David has been able to make his operational success and
others have done it shows you can do it now.
You know, you can make a thousand mistakes long way,
but there are really positive signs. The fact that News
twenty four has you know, more than one hundred and
ten thousand subscribers paying subscribers shows that people want to
pay for news. They're willing to do it. The fact

(49:12):
that that Dali Marrick has such a such an immense
online audience shows people are interested in it. So these
are gems that you can collect from all over the
place and say, yes, we can do something. But I
do think you need to deliver real value to society.
You can't just put out a news product and you know,
I hope people will just arrive and just produce press releases.
I think you have to demonstrate the value adding so

(49:33):
that people do, you know, do come and read your
product and build respect and trust that.

Speaker 2 (49:38):
Way you and I don't know how you'll answer this,
but you went from paid employee as editor of Financial
Mail too with a group of other very significant figures
starting currency news, that transition to actually having to run something.
I mean, journalists famously are hard to manage, but I
think often one of the problems with a media oranizations

(50:00):
that journalists are also not necessarily good managers. And I've
sometimes felt that I'll include myself in this, we need
a business person to run us. Is there something in that?

Speaker 5 (50:12):
Yes?

Speaker 10 (50:13):
I think absolutely that's true. I mean I think that
you know, we do this because we didn't really have
another option. So we kind of made it work at
Currency News, but I think that I do think somebody
has a strong commercial sense of it in a handle
on where it's going and what needs to be done
in terms of the bank account every month is a
vital necessity at at any media organization, and Daily Maverick,

(50:33):
for example. You know Stilly has done that at Daily
Merrick and that's been fundamental to the fact that it's
now How old is Deni Merrick eighteen years old, twenty years.

Speaker 2 (50:40):
Old, two thousand and nine, he says, off the top
of it said very quickly.

Speaker 10 (50:45):
But that's I mean, you need somebody like that. And
I think that you know, we did it because we
have to, but I think you absolutely need to and
I think it can, actually it can. It can make
the companies way more successful. As journalists though you do
have an insight into what's actually happening on the ground
in the newsrooms, you can say this decision was made
that wasn't a commercially great one. We can do this better.
So you have insights sort of valuable. But I think

(51:05):
you absolutely need to tell a sense of managing a business,
and that isn't famously what journalists are are great at
I mean they can always, you know, say in retrospect
this is badly done, But in terms of running it's
a different story.

Speaker 2 (51:16):
Rob Rose, good to hear from you, good to talk
to you, Thank you very much. Indeed, a co founder
of Currency News. As a fellow journalist, I have to
issue all the very best of luck. And obviously, as
you know, the Money Show is financial journalism too, so
we all wanted to succeed. One of the reasons I
thought it was important to hear from Rob or one
of the people involved in what's happening there. I'm fascinated

(51:37):
by the kind of journalism journey in it and to
how you turn information into money, particularly when information is
sort of all over the place. And of course the
answer is obvious. It's the insight, it's the ability to
put it together. And it's not journalism. It isn't about facts.
It's not stenography. I mean, I get irritated when people
say you must just report the facts. That's being a snograph.

(52:01):
And my argument to that was always to say, in
situations where people have pushed me on it is to say,
it's not my job to say this person says, it's
raining and this person says, it's not as to go
outside and look. And I think when you go and
do the looking yourself, that's really where you start to
make some money. And financial journalism is absolutely key and

(52:22):
vital to that, absolutely and to the success of many companies.
By the way, I mean, how on earth are you
going to know which share price to buy, which chare
to buy based just on the stock exchange news service? Okay,
good luck? Twenty minutes after seven.

Speaker 1 (52:36):
Show business books.

Speaker 2 (52:38):
It's been a little while since we've seen you. Ian Man,
good evening. You're gonna have to move the microphone to
your to your mouth. Ian Man, of course, is the
managing director of Gateways Business Consultants. How you doing, good, good, good,
good to have you back. The book this week is
Money by David McWilliams. And let me just confess the
very beginning. I started it, but I haven't finished it.

(53:00):
You will not be able to put down with going
of it. It's probably the most extraordinary book I've read.
I cannot remember since when it's written by an economists.
That's not his fault. Most economists are really very dry.

Speaker 8 (53:13):
He is.

Speaker 11 (53:14):
He can't write a paragraph without being entertaining. What he's
done is he's taken the history of money from from
the from the very beginning when hunter gatherers, we're using
grains as as a medium of establishing value which they
could share with other people because it had a value.
We know that two handfuls of this can be equal
to one of that. And then we saw He leads

(53:36):
that right through up to where we are now with cryptocurrencies.
And his book is built on simply giving you insights
and the most extraordinary things that happened long the way,
and I like to share some of them with you.
So he goes back to the very very oldest. If
you take the some Marians in two thousand BC, they were,

(53:59):
they had a civilization and where they were writing and
writing in that accounting that the legal system that sophisticated
financial architecture. And they were, but the whole thing was
anchored by interest rates. There was a clear interst rate.
Everybody in you were trading was because that was interest rate.
But was the Lydians that developed a coin. Now before them,
the Babylonians always loved gold jewelry. But to say that

(54:21):
this is worth an ounce of gold means that you've
got to be sure that the ounce that your weights
are correct. That's fine. The problem with this is you
can also put a stone in the middle, or something
was dirty in the middle. But once you start putting
in printing, printing a coin that's regulated by some major
authority like a country, you know that that's tradable. All
of a sudden, trade completely completely changed. And that's what

(54:44):
happened with the Lidians. And there they stamped, they stamped,
validated piece of gold was really worth what they said
it was.

Speaker 9 (54:52):
The Greeks go.

Speaker 11 (54:53):
Then he gets into it takes everything in between that.
Then you get to the Greeks, and the Greeks had
an enormous empire. The only problem was that they they
couldn't feed themselves, so they really needed to trade. And
what they started doing was they they had to import
three courts and it's amazing, had to import three courts
of their food. So they had to have some way

(55:14):
of trading. And they developed a coin and which the Drama,
which lasted for seven hundred years as the basic as
a basic form of trade. And that made that made
them completely different to anybody else. But that that that
coin actually had other effects. And what he does he
shows the effects on humanity and human beings, effect on

(55:35):
on on money, and how the world evolves from that.
The the in in in in Athens, if you had
two drama and you were a lowly level person, you
could buy exactly the same amount of goods as a
princess with two drama. That was very democratic and very
very unusual. Then it wasn't like that. Then you move

(55:57):
into places like Florence, and everything in material get to
Florence's most incredible city. Even though it's incredible, there was
an incredible trading city, was probably the greatest trading hub
of its time, and they were structured the way the
structure was unusual. Firstly, they set up guilds, which meant
groups of people got together and by getting together they

(56:18):
could get better prices, they could sell better and their
trade routes literally around the world, and these guilds facilitated
this trade. But more interestingly, the wealthy people there were
very civic minded, and the wealthy people were all built parks,
but not for themselves, huge houses with big parks. They
bought parks for the people. And so he had a

(56:39):
city where which attracted intellectuals, which attracted open thought, and
which actually became an extraordinary, extraordinary city until the Black
Plague there was an extraordinary, amazing, amazing achievement.

Speaker 2 (56:51):
So the idea really is that money currency brings people
together and brings people together who would not otherwise be together.

Speaker 11 (56:59):
Absolutely it has It has all sorts of effects. One
that brings people to get also allows them to trade
with each other in ways that they couldn't have done otherwise.
And he weaves all sorts of lovely stories together. One
of the stories I enjoyed most was his story about Gutenburg.
We always think of him as printing the Bible, but
Gutenburg was down and out. He was a goldsmith, saying

(57:21):
you had craft things, and he realized that I could
make a printing press. And he didn't make a printing
press for books.

Speaker 2 (57:27):
He went.

Speaker 11 (57:28):
The best person to be employed by at the time
was the church because the church had the real money.
I think they still have enormous amount, and they they
were the one to really work for, and they were
had a really nice scheme. You could get get out
of hell free. All that you could get out of
hell if you if you bought your way out indulgences.

(57:49):
But they were printing, writing out indulgences by hand that
took too much time.

Speaker 2 (57:54):
So he went in and help you guys out.

Speaker 11 (57:57):
I can print these things in mass and it made
was made a huge amount of money for the church.
Bolso made a huge amount of money for him. And
you have all these incredible stories the thew how money
led to something else, and you can see the effect
of the Protestant Revolution was the result of him having
going to business, building in printing press and going on.

(58:18):
But the idea of money was used for all sorts
of things. When when the states after the War of Independence,
you had a whole bunch of states who were separate,
the South and the North, and they couldn't come together.
They used money to get people together in a very
very interesting way. They had one the first they said
the central government will take care of all the war

(58:39):
debts for the site. The problem was that they said,
we've just left the Brits. We don't want to we
don't want to be governed by anybody else. They said,
we'll give you, we'll take care of all your debts,
but we're going to have only one currency called the dollar.
And all of a sudden, every time you took your
money out of your pocket. You remember there was the
United States America and they had a dollar. It was

(59:02):
things like that. The money had impact in the ways
that you couldn't have expected it. But we've also had
We've also had we meant to fear the currencies where
money was based on who said it was and in
the American dollars is in God we trust, but it's
really in the Fed that we trust. And the money
is a very interesting way of just developing and growing

(59:24):
at extraordinary rates.

Speaker 2 (59:27):
So I said I hadn't finished the book. You said
that that was strange because it's written so well, and certainly,
I mean all of the reviews make that point about
this book too. That's something you would recommend very strongly.

Speaker 11 (59:40):
I would definitely recommend it very strongly. I think that
it leads you not only into what money has done
and what money can do, but it allows you to
understand what money is, how it moved from from dollar
asset based like gold, to where we can have money
that was delinked from gold and it was just based

(01:00:02):
on the economy. And then we move further and he
ends the book by he was in the Bank of Ireland.
He understands national banks and he asks whether banks control
the money or money controls the central bank. I'll just
give you a quick example. If you want to buy
a house, this asset called a house. I come and

(01:00:25):
I go to the bank and I borrow money. They
give me money, So now I have money, but the
bank has an asset called the house. All of a sudden,
the value we've just put the value of our house,
just because they're nothing structured, into the economy, and it
grows like that. We get some wonderful insights into business
and the economy and into money.

Speaker 2 (01:00:45):
I found the fascinating yan Man. Thank you so much.
Our regular book reviewer MD at Gateways Business Consultants. The
book is Money by David McWilliams. It's twenty nine after seven.

Speaker 1 (01:00:57):
Her Money Show, How I Make My Money.

Speaker 2 (01:01:00):
Twenty two minutes now to eight the time. Well, have
you ever wondered why it is that you prefer one
particular retail chain over another? I mean, I don't know
if you've done the research and looked at everything they sell,
or if you just feel better in one, or you
don't like the color, or you just don't feel as
comfortable going into another one. The secret of this is

(01:01:20):
actually loyalty and what makes you feel this way or
that way is very much a science nowadays. I think
there might be some art in it as well. Someone
who's made their living, their career out of this in
this kind of science is Amanda Cromhoche. She's the founder
and CEO of the organization called Truth Amanda. Good evening,

(01:01:41):
Thanks so much for green to spend half an hour
with us tonight.

Speaker 12 (01:01:45):
Hie Stephen, nice to be with you.

Speaker 2 (01:01:47):
You talk about loyalty, and I mean, in my head,
I'm thinking a frequent shopper program, God discount on this
or whatever. You will have a very different understanding to
me about So how would you define loyalty in the
kind of commercial sense to get people to come and
spend money in your store.

Speaker 13 (01:02:10):
Well, I think you're right in the sense of as
a consumer, that's exactly what you think of, Like what
is this going to do for me?

Speaker 12 (01:02:16):
Shall I swipe my card? Is it worth it?

Speaker 13 (01:02:19):
And at the end of the day, all the brands
that we work with in the loyalty industry have to
make sure that that's the first and foremost criteria to
make sure that customers are happy and that it's worthwhile
for them, because if it makes sense for their business
but doesn't make sense for the customer, then ultimately it's
not going to survive. So we spend a lot of
our time helping the brands in South Africa or around

(01:02:40):
the world who we assist in loyalty programs and so forth,
getting the balance right between what is fabulous for the consumer,
what's going to make a difference for the consumer, and
also then equally, what is commercially viable for the brands
who are operating these loyalty programs, Because if one is
great for the consumer but actually is sinking the brand,

(01:03:02):
it's not going to last. But if it's great for
the brand and not good for the consumer, it's equally
not going to last. So it's a balance, And I
think that's where you said the science and the soul.
It's very scientific from an economic point of view, from
a mathematical returnal investment point of view, but it's also
there is a there is a soul to it in
terms of is this going to work, is the consumer

(01:03:24):
going to like this, is it going to really make
a difference versus the competitors, Because virtually every brand out
there now has a loyalty program of sorts, so you
have to differentiate somehow, and that's a little bit of
the soul coming through. So it's very scientific, though, don't
you know not to not to let that loose.

Speaker 2 (01:03:43):
I'm going to come back to that because I find
the interesting, but I do want to just focus on
the soul for a second. I mean, what is the soul?
I mean you look at a retail chain and you
think it doesn't have soul, and yet people will walk
into it or speak to the workers, interact with people,
kind of know where the counter is, and I think
they come out of that shopping experience. They do come

(01:04:05):
out of it moved in some way. I mean, shopping
has become so much less frustrating than it was twenty
years ago.

Speaker 13 (01:04:13):
Yeah, So, I mean, I've had the luxury of working
as a retailer within the retail industry, and I always
that I've heard the best retailers in the world refer
to the retail industry as science and soul, and I
think that's exactly right. There's a very scientific approach to
merchandising and pricing and so forth, but there's a very
the soul of a retailer. So I had the privilege

(01:04:37):
of working for Wallworst South Africa for three years and
we used to you know, the Simon Susman was the
CEO at the time, and he used to talk about
the soul of retailing, like the smell of the strawberries
or the feel of the fabric in woman's fashion and
so on. And it's true, right, like, if you smell
a beautiful strawberry in the grocery store, you're more likely

(01:04:58):
to say I want that rather than just if it's
based on price and more scientific methods. So and I've
just I mean, a lot of the work that we
do at Truth is working with brands around the world,
and I've just had the privilege of working not working
so much so, but visiting a retailer in Australia who

(01:05:18):
really excelled at the soul of getting getting close to
their customers and making them getting their customs to love, love,
love their brand.

Speaker 12 (01:05:27):
And that's that's something.

Speaker 13 (01:05:28):
That's you know, just data alone or scientific analysis can't create.

Speaker 12 (01:05:33):
There's a soult.

Speaker 13 (01:05:34):
There's a soul behind that approach, without without doubt.

Speaker 2 (01:05:39):
It's so interesting to sort of think about how it
works because I sometimes wonder can a brand with a soul.
Make a mistake that affects the soul but not the science.
And I'll give you an example. There's a particular British
shift that I cannot stand. I haven't been able to
stand and I couldn't stand Jamie Onovano when I lived
in the UK thirty year ago. I can't stand him

(01:06:01):
now now I might be the only one, but I think, frankly,
that's a huge mistake. And sending me a WhatsApp thing
with him actually saying my name before hitting the drums.
I tell you what I wanted to do with the
drama sticks, Amanda. But can you get the soul wrong?

Speaker 1 (01:06:18):
Yeah?

Speaker 13 (01:06:19):
No, you're making me laugh because I've used that's a
good example of where you're picking up on the soul,
but I pick up on the science, because the science
of that is very much that they pick up on
how loyal you are to the brand and that we're
talking about the famous Checkers sixty sixty and their Simple
Truth brand, and they've used that campaign very cleverly from

(01:06:43):
a science point of view in terms of understanding what
I shop and talking to me about what I shop.
And I am a simple truth, you know, I do
buy the Simple truth brand. So they're getting it right
from a science point of view without question. Here in
your case, maybe they're just a lucky that you don't
like the Oliver. But you're right, you know that's a

(01:07:04):
brand preference, but that is a soul and if it
completely missed the mark for you, but for me, that's
a great example of a scientific approach. But the execution
maybe is missed the mark for some consumers and how
they would predict that. I have no idea. I don't
know why you don't like them, but that's your.

Speaker 2 (01:07:21):
Personal There's a long list of reasons, but we don't
need to go into that now. I mean, I'm sure
he's sure, he's perfectly nice to do all of this.
To make it work. To make the science work, you
would need to have data, and I would imagine a
ton of it, and you would need to know who
your shoppers are. You would need to know how they
came across you. They would need to know if they

(01:07:42):
grew up coming to your stores. I mean, if you
look at our big retailers, most of them will have
customers who grew up going to them in some way.
You need to know who you're aiming for. The data
must be key to the whole thing.

Speaker 13 (01:07:57):
It is, of course, but I'll correct you maybe on
one thing is you actually don't need heaps and heaps
of data. So obviously a big national retailer like a
Wallvers sort of Checkers or one of the big retail
banks and so forth, they have gogantuum amounts of data
and do amazing things with it with permission obviously from
the customer. With and that's the best news is in

(01:08:20):
the last five years or more. Globally but also here
in South Africa, the legislation really does protect the consumer.
So it's if they're not then they're absolutely incomplete breach.
But it's not just the big boys that can can
use the data effectively. We've you know, we're starting to
see and help brands that are tiny organizations that may

(01:08:42):
just be a corner florist for example. They can collect
data very simply from whether it's signing up for email receipts,
whether it's signing up for a newsletter, and can effectively
as well hopefully change how customers feel about their brand
because they're starting to create this relationship. But obviously with
the big global players or the big national players, they

(01:09:03):
are collecting rows and rows and rows and rows of
data against millions and millions of customers. And we've seen
the South African loyalty players be recognized globally for the
work they're doing in loyalty and with the use of
their data. So brands such as F and B, E Bucks, TFG, Shoprite,

(01:09:24):
they've all been recognized globally for the work they're doing.
And that doesn't just come because they're good brands and
they sell nice merchandise. To be recognized on the global
stage for their data analytics capability. They're doing so responsibly,
so the consumer is always protected, and so they're adding
value to the customer's life and obviously they'n a commercial

(01:09:46):
return for themselves. And that's what I started off by saying.
It's got to have almost like a seesaw effect, that
it's got to be a balanced seesaw that the consumer
benefits whilst the brand benefits. It can't be heavily weighted
against the other otherwise it has no sustainability.

Speaker 2 (01:10:03):
When you're trying to start one of these systems. Let
me go back a little bit to get the customer loyalty.
Does it all boil down to price in the end.
So I mean, if you look at the two big
pharmaceutical chains that we have, they both have massive loyalty programs.
Does it boil down to who is getting their goods

(01:10:24):
for cheaper at the end? Or is there more to
it than that? Is that like the be all and
end or is it just one of the factors.

Speaker 13 (01:10:33):
Steven, I think you're raising a very good point here
around price sensitivity in the role loyalty place. So we
issue every annual white paper for South Africa. It's called
the Truth and Brand Map white Paper. It's based off
data that is called a Brand Map study, and we're
about to we're literally writing now and creating the new

(01:10:53):
white paper for twenty twenty six. So in twenty twenty
five's white paper, we saw the mergence of the power
of loyalty to help the consumer get through month end.
So there were three main concerns raised in this data
by the South African consumer saying, my biggest concerns in

(01:11:15):
life are one crime, corruption and money. I don't have
enough money. Cost of living. So the third reason for
people stay awake at night was cost of living. And
then this study asked, well, what helps you get through
the cost of living crisis, and they said, number one,

(01:11:37):
I cut back on clothing clothing spend. Number two, I
cut back on going out to restaurants, and number three,
I use loyalty programs. So loyalty programs have become not
so much a luxury or sort of add on to
how consumers survived, but part of their every day, every

(01:11:57):
day method of shopping and making ends meet. So the
data last year was eighty two percent of South Africans
use loyalty programs. And that's not just eighty two percent
might think about it, eighty two percent might have a
loyalty card, but eighty two percent actively use loyalty programs.
And without giving away the data for this year's white paper,

(01:12:21):
that number definitely hasn't gone down, is all I can
say at this stage. So South Africans, it's one of
the most mature markets in the world, and the South
African consumer is one of the most engaged consumer in
loyalty programs, probably because they need it, and also it's
a combination of needing it and wanting it and enjoying it.

Speaker 12 (01:12:42):
But the needing it is a real big thing here.

Speaker 13 (01:12:45):
We do see that globally as well, but we see
it a lot more here, And I've done interviews with
Clicks or FM B, E Bucks, Clicks club Card, F
and B E Bucks who all confirm the same. They
can see how consumers are using their points, whether it's Kapitech,
whether it's Ebucks, whether it's Clicks, whether it's disc, all

(01:13:06):
of the big loyalty players. They can all see by
the way customers are using it that it's helping them
make ends meet, I mean, clicks go. Milani, Doctor Milani
Van Roy gave a wonderful example of how maybe a
decade ago, customers used to use their Clicks club card
points on luxuries like perfume or lipstick or you know,

(01:13:28):
a treat, whereas now it's being used on basics like
soap or toothpaste or toilet roll.

Speaker 12 (01:13:35):
So there's a shift and that we see in the data,
you know, and E Bucks.

Speaker 13 (01:13:42):
I've got on record an interview I did with EBU,
with F and B E Bucks where they say, you
know that our.

Speaker 12 (01:13:47):
Redemption rate is one of the highest.

Speaker 13 (01:13:50):
It's definitely one of the highest in South Africa, like
over ninety percent of all e bucks issued or used,
and that's enormously high and a lot of the time
on essentials like utilities or just getting through month ends.

Speaker 2 (01:14:04):
Sure. Speaking to Amanda chrom Hot Tonight, founder and CEO
of Truth on How I make my money on the
Money Show. It's eight minute state.

Speaker 14 (01:14:14):
The Money Show is still encluted. Is brought to you
by Absolve Corporate and Investment Banking, balancing economic growth with ecosystems.
That's how they've invested in your.

Speaker 1 (01:14:24):
Story Her Money Show, How I Make My Money.

Speaker 2 (01:14:30):
Speaking to Amanda Cromhoat, founder and CEO of Truth. She's
an expert in consumer loyalty. Amanda, I have a couple
of questions about about the level of engagement that you
talk about and how engaged South Africans AA with loyalty programs.
Are they differences among along gender lines? Do you find
on one side is more one side? Are women more

(01:14:54):
engaged by men? There I've spat out what I'm really asking.

Speaker 4 (01:14:59):
Lo.

Speaker 13 (01:15:00):
If you'd asked me four years ago, I'd just said absolutely,
and I think the predictable answer would have been women's shoppers,
female shoppers or consumers are more engaged in using lorty
programs more.

Speaker 12 (01:15:13):
But the very.

Speaker 13 (01:15:14):
Interesting thing is now it's marginally it's either the same
or just marginally different, and we saw that shift after COVID.
So during COVID, I think with the balance of folks
working from home and then probably more of a balance
of the everyday chores like buying groceries or popping out

(01:15:34):
by nappies or whatever, we saw the shift change and
male consumers becoming much more engaged. So female consumers didn't
drop their engagement, but male consumers have caught up. We
do see a slight difference if you take it category
by category. So typically fashion shopping is more female dominated

(01:15:56):
by females. In the lorty engagement or fuel per purchases
and retail banking is more male consumers are engaged. But
if you take overall in across all South African lorty
programs at South African consumers.

Speaker 12 (01:16:10):
It is pretty much like for like in an age.

Speaker 13 (01:16:13):
If you look at age differences, we see a younger consumer.
By younger we say between eighteen and twenty five, they
are very much less engaged, and I think it's a
reflection of their ability to spend. You know that either
just starting out in life or they're still students or unemployed,

(01:16:33):
so they have less disposable income, less need of using
Lorty programs, but that catches up. We're not seeing that
gap get bigger every year, but we're not seeing them
catch up to the average South African consumer.

Speaker 2 (01:16:49):
You talk, I know, you speak internationally and you've spoken
in many places and very big events too. Are our
consumer programs different to what happens in other countries? I mean,
I mean, I would think the Americans must have sort
of built this. I mean maybe they didn't have no idea,
but that's just my presumption. I mean our program is
different to other places.

Speaker 12 (01:17:10):
So I'm going to absolutely correct you there. So we
are one.

Speaker 13 (01:17:14):
I really am saying this without any bias. And I'm
originally I'm British, so I'm originally from the UK. So
I love the South African market not just because I
love living here, but because I feel that this market
is very advanced and mature in the loyalty industry. Now,
why is that it wasn't necessarily I'd say ten years ago,

(01:17:36):
I'd say they're still catching up to do, but it's
been this huge explosion and there's no way, you know,
if I look if I look at just from my
experience and talking to brands and working with brands around
the world and then working with the South African brands,
we are most definitely one of the best markets. But
that is also proven by I'm a judge on the

(01:17:57):
International Loyalty Awards. I'm also the chair of the South
African and African Lawty Awards, and we see the South
African brands on the global stage outperforming.

Speaker 12 (01:18:07):
The other countries.

Speaker 13 (01:18:10):
So other retailers are the financial services brands.

Speaker 12 (01:18:13):
So it's not just me saying it. It's not just
a bias.

Speaker 13 (01:18:16):
There's a judging panel of I think there's about thirty
judges of which I'm one of them on the International awards,
and last year the South African brands as a country,
we took home more awards than anywhere else, USA, UK
and so on. Now there's still elements where I feel
we could catch up in terms of delivery in the marketplace.

(01:18:41):
But if I look at what some of the brands
are doing, and some of them we've mentioned already tonight,
they are definitely ahead or on a par with international progress.

Speaker 2 (01:18:49):
Amanda. We've got literally thirty seconds, which is going to
be unfair because I kind of wonder how this is
going to evolve from. Yet it gets hugely competitive there
was an important report out I think it was from
Consumer Intelligence a couple of weeks ago, suggesting that this
was in some cases erring on the wrong side. The
balance was wrong, it was costing companies too much money.
It's only going to get more intense, I think so.

Speaker 13 (01:19:12):
But I think brands will get smarter at doing it better, quicker, lower,
lower cost, and better return for customers.

Speaker 12 (01:19:20):
Hopefully the end of the day, it's going to be
good for the customer.

Speaker 13 (01:19:22):
Otherwise, maybe consumer intelligences onto something, but I think the
brands will out smart that and with the use of AI,
with the use of data and personalization, we'll get it right.

Speaker 2 (01:19:35):
Amanda, I thoroughly enjoyed talking to you. I found that
really very interesting. Thank you very much. Indeed, Amanda Cromhote
is the founder and CEO of Truth. The next time
you feel loyalty to a brand, you can blame her.

Speaker 14 (01:19:49):
The Money Show, Stephen Croute, is brought to you by
Absolute Corporate and Investment Banking, balancing economic growth with ecosystems.
That's how they've invested in your story.

Speaker 2 (01:20:02):
Well, looking at the US markets, despite how things started
here this morning, things looking a lot better now. The
Dow Jones up a full percent, and as the cup
point seven seven s and P five hundred up point
sixty six percent at the moment. And of course, one
of the big questions is what's happening around gold and platinum.
We've seen the bitcoin continuing to decline below eighty one

(01:20:24):
thousand dollars at the moment per bitcoin, was it one
hundred thousand dollars. You'll remember the high gold, the recovery
sort of stalling. It's at four thousand, seven hundred and
sixty dollars at the moment, so far off where it
was last week. We'll be back with you tomorrow. Good evening,
it's eight o'clock

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