An overview of the annual Nedgroup Investments Summit 2018
Nedgroup Investments recently hosted their annual Investment Summit which saw over 600 members of the financial and asset management industry converge on the Sandton Convention Centre. The title of the event was ‘Decoding the future’ and the overriding theme was that while 2018 has been a painful year for emerging markets – and South Africa in particular, there are signs of potential coming through.
The question is – can the country capitalise on this potential – a question that speaker and economist, David McWiliams urged the audience to ponder and act on.
It was so pleasing to see so many members of the industry come through and to engage with some of the really tough questions.
Nicky Weimar, Senior economist at Nedbank presented her picture of where we can expect South Africa to head from an economic point of view. She highlighted the fact that in spite of global economic growth, South Africa has failed to follow the trend. Citing reason for this, she pointed to the plight of South African businesses that are weighed down by low confidence, onerous legislation, inefficient infrastructure and the mounting costs of dealing with state capture.
She also stressed that the resultant lack of fixed investment is unlikely to be quickly addressed because the structural reforms required to address this will be highly unpopular in the short-term – an effect no one will want to trigger before the 2019 national elections. This means that in the medium term South Africa can expect economic growth to be very gradual and very modest. It will mainly be brought about by cyclical forces.
Other presentations included a political overview from JP Landman, an examination of corporate ethics in South Africa from Professor Piet Naude and a discussion on the potential impacts of further legislation like RDR on the financial planning industry in South Africa.
The overwhelming sense was one of cautious optimism. While investing against the backdrop of muted economic growth and high political and regulatory uncertainty, there are clear signs of potential coming through and there is definitely some value to be found.
A number of big trends for the future were identified. The impact of platforms and digital technology is undoubtedly one of the biggest drivers in the industry currently with the rise of robo-adviors and cloud-based platforms being highlighted. However, it is also clear that the human factor will remain hugely important and in fact a source of differentiation in the financial advice industry.
Nedgroup Investments Best of Breed™ fund managers also delivered brief updates commenting that valuations are looking quite reasonable but also stressing that in this environment – superficial analysis of value is likely to be detrimental. Investors need to rely on in-depth research and careful analysis.
But it all depends on what is going to happen – in terms of business confidence and consumer confidence in the next few years. One speaker possibly summed it up with his quote: “When living in South Africa - it’s never as great as you hoped but it’s also never as bad as you feared”.
Finally the keynote speaker, Professor Gerges Fawz brought this dramatically into perspective with his alarming assessment that the world has never been as close to an all-out war in the middle east as we are now – and that should this become a reality there will be very real economic and social consequences across the globe.