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Finweek - English

Finweek - English 2/4/2021

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Finweek is South Africa’s leading financial weekly magazine focusing on investment. With its brisk, creative and authoritative analysis of business and investment issues, it’s an essential business tool in the daily battle for competitive advantage. Today's business decision-makers have to cope with increased pressure on their time and are expected, more than ever before, to succeed in the face of stiffer competition. Finweek provides relevant information in quick bytes, along with award-winning investment advice.

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25 Issues

in this issue

2 min.
from the editor

the birthplace of capitalism – if one were to see this as the place where the first shares were issued – has used the coronavirus to start testing a new type of economy. I read that Amsterdam – and other places in the Netherlands too – has started implementing the so-called “doughnut” economic model. This idea, which is the brainchild of the British economist Kate Raworth, purports that humankind should fulfil its basic needs within the limitations set by the planet. These basic needs of people include a roof over your head, food on your table, access to healthcare and education, a political voice and a few more. These needs should therefore be met in, among others, a stable climate, fertile soil and a protective ozone layer (the planet’s limitations).…

4 min.
quants and the future of finance

finance is not the same as it was a few years ago. Whereas The Wolf of Wall Street epitomised the traits of the successful trader in the 20th century, today things look very different. Computer scientists in sweatpants – quants – design and implement complex mathematical and statistical models that more efficiently price securities, reduce risk and generate profits. One of these relatively new statistical applications is machine learning. A 2020 paper in the Review of Financial Studies by Shihao Gu, Bryan Kelly and Dacheng Xiu uses the Sharpe ratio, a measure of the risk-adjusted return of a financial portfolio, to show the benefits of machine learning: “A portfolio strategy that times the S&P 500 with neural network forecasts enjoys an annualized out-of-sample Sharpe ratio of 0.77 versus the 0.51 Sharpe…

4 min.
in brief

“I will fire you on the spot.” – US President Joe Biden’s tenure as head of state began with a stern warning to 1 000 presidential appointees who will help him steer the federal bureaucracy. In an video conference Biden said he will fire them “on the spot” if he hears that they have shown “disrespect” to people in their professional conduct. He kicked off his administration with sweeping orders on immigration (reversing several hard-line immigration policies put in place by former president Donald Trump), Covid-19 (a requirement to wear masks and social distance in federal buildings), racial justice and climate change (rejoining the Paris Agreement). “WE BELIEVE THERE IS ROOM FOR FURTHER EASING.” – Mamello Matikinca-Ngwenya, chief economist at FNB, said while the South African Reserve Bank may have decided to keep…

2 min.
double take

THE GOOD Santam announced in a statement it will start processing business interruption claims for all commercial policies that were affected by Covid-19 lockdowns in April 2020 beyond those of its hospitality and leisure division. It will cover a total base of Santam’s 4 000 commercial clients who’ve claimed interruption to their business due to lockdown. SA insurers have refused to honour claims by companies shuttered due to the national lockdown, arguing these claims are not covered under their business interruption policies. A court ruling in December overturned an appeal by insurer Guardrisk, forcing other insurers to start processing some claims. THE BAD South African Breweries (SAB), a division of Anheuser-Busch InBev (AB InBev), has suspended indefinitely and with immediate effect the contracts of 550 temporary workers due to the latest ban on…

3 min.
a welcome boost for zim’s economy?

david Brown’s association with Zimbabwe’s mining sector dates to his six years as CEO of Impala Platinum (Implats), which ended in 2012. During that time, he met with then president Robert Mugabe to end a dispute between the government and Implats regarding certain mineral rights. Brown is now back in the country as non-executive chairman of Great Dyke Investments (GDI), a company backed by private Russian interests that is hoping to raise $550m for a platinum group metals (PGM) mine, Darwendale. His day job, however, is with another entity, an emergent gold miner, Kuvimba Mining House, a rather grandiloquent-sounding company that has the support of Zimbabwean President Emmerson Mnangagwa. Mnangagwa’s hope is that companies like Kuvimba can breathe life back into the country’s crisis-hit economy. Mnangagwa hasn’t many economic levers to pull, but…

3 min.
hard decisions ahead for gold fields’ new ceo

it is characteristic of Chris Griffith, the incoming CEO of Gold Fields, that he takes up duties at the gold company the day after his 12-month “gardening leave” expires, which is end-March. When Gold Fields last year announced the impending departure of Nick Holland, on the basis the CEO of 13 years would turn the mandatory age of retirement in 2021 of 63, the plan was for “a handover” period, possibly of up to six months. Now, however, Holland has agreed to leave earlier than planned. There doesn’t appear to be any objection to this, it’s just typical of Griffith that he would immediately want to imprint his own ideas on Gold Fields – even though Holland has had executive duties there for nearly two decades. Griffith was previously CEO of Anglo…