Africa Bank 13%

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Allison 501D13H
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Africa Bank 13%

Unread post by Allison 501D13H » Wed Sep 11, 2019 9:48 pm

Good evening Gentlemen,

This offer from African Bank seems good. May I ask you folk, what am I missing? Yes, I understand simple interest Vs compounded interest. Yes, it’s a 5 year maturity date, and a lot can change between now and then. (I suspect it will). What’s the consensus out there? At the current climate ; Hypothetically a 1 million rand ‘flat’ will be less of an investment and possibly suffer capital gain loss.

Thoughts?
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Re: Africa Bank 13%

Unread post by Peblehead » Wed Sep 11, 2019 9:57 pm

It's all in the name....
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Re: Africa Bank 13%

Unread post by cx45338 » Thu Sep 12, 2019 12:30 am

Your money will be safer with VBS :roll:
Life is so tough, I've yet to come accross anybody who has come out alive on the other side.
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Re: Africa Bank 13%

Unread post by Falafel » Thu Sep 12, 2019 8:47 am

Allison 501D13H wrote:
Wed Sep 11, 2019 9:48 pm
Good evening Gentlemen,

This offer from African Bank seems good. May I ask you folk, what am I missing? Yes, I understand simple interest Vs compounded interest. Yes, it’s a 5 year maturity date, and a lot can change between now and then. (I suspect it will). What’s the consensus out there? At the current climate ; Hypothetically a 1 million rand ‘flat’ will be less of an investment and possibly suffer capital gain loss.

Thoughts?
A couple of things:

1. Dont forget to factor in tax - interest is taxable
2. Restrictive - 5 years is as you say a long time
3. Real purchasing power of R1m at 13% I suspect will likely be eroded with tax and potential inflation also

Rather look at splitting it around... if you dont like offshore then at least put 50% overseas in a fund, the remainder put into Satrix or something similar... make sure you dont need it though because there are costs associated with putting in and taking out too soon...

Regardless do your own homework and if you invest it watch the fees, especially from advisors and worst IMHO bank brokers... they are real hit and run artists taking up to 5% of your money and most often leave and go elsewhere leaving you with underperforming funds...

If it were me...

I would take R500k, drip feed it into a conservative global fund over 3 months, the remaining R250k I would put into a Satrix related fund also over a few months and the remaining R250k put in a bank (that way you have flexibility if the Rand strengthens or the stock market tanks to buy again albeit at a lower rate)... if Rand strengthens then put it into your offshore fund, if JSE drops massively then buy in, and your averaging will help you going forward...

Remember beware the advisor... do your homework...

NOTE: I am not a financial advisor and suggest that you approach one to get the best advice on any financial products or services, and this does not constitute advice only my opinion :) :) :) :) :) :) :) :)
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Re: Africa Bank 13%

Unread post by JCA » Thu Sep 12, 2019 4:34 pm

Falafel wrote:
Thu Sep 12, 2019 8:47 am
Allison 501D13H wrote:
Wed Sep 11, 2019 9:48 pm
Good evening Gentlemen,

This offer from African Bank seems good. May I ask you folk, what am I missing? Yes, I understand simple interest Vs compounded interest. Yes, it’s a 5 year maturity date, and a lot can change between now and then. (I suspect it will). What’s the consensus out there? At the current climate ; Hypothetically a 1 million rand ‘flat’ will be less of an investment and possibly suffer capital gain loss.

Thoughts?
A couple of things:

1. Dont forget to factor in tax - interest is taxable
2. Restrictive - 5 years is as you say a long time
3. Real purchasing power of R1m at 13% I suspect will likely be eroded with tax and potential inflation also

Rather look at splitting it around... if you dont like offshore then at least put 50% overseas in a fund, the remainder put into Satrix or something similar... make sure you dont need it though because there are costs associated with putting in and taking out too soon...

Regardless do your own homework and if you invest it watch the fees, especially from advisors and worst IMHO bank brokers... they are real hit and run artists taking up to 5% of your money and most often leave and go elsewhere leaving you with underperforming funds...

If it were me...

I would take R500k, drip feed it into a conservative global fund over 3 months, the remaining R250k I would put into a Satrix related fund also over a few months and the remaining R250k put in a bank (that way you have flexibility if the Rand strengthens or the stock market tanks to buy again albeit at a lower rate)... if Rand strengthens then put it into your offshore fund, if JSE drops massively then buy in, and your averaging will help you going forward...

Remember beware the advisor... do your homework...

NOTE: I am not a financial advisor and suggest that you approach one to get the best advice on any financial products or services, and this does not constitute advice only my opinion :) :) :) :) :) :) :) :)
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Re: Africa Bank 13%

Unread post by HJK 414 » Thu Sep 12, 2019 4:48 pm

Allison 501D13H wrote:
Wed Sep 11, 2019 9:48 pm
Good evening Gentlemen,

This offer from African Bank seems good. May I ask you folk, what am I missing? Yes, I understand simple interest Vs compounded interest. Yes, it’s a 5 year maturity date, and a lot can change between now and then. (I suspect it will). What’s the consensus out there? At the current climate ; Hypothetically a 1 million rand ‘flat’ will be less of an investment and possibly suffer capital gain loss.

Thoughts?

Thoughts ……..

You are asked to place your money in a fixed deposit for 5 years - you can not withdraw it.

There is no Deposit Insurance Scheme in South Africa for banks - if the bank fails (or is folded) - you loose it all.

The SARB has announced that it may wish to sell it's 50% stake in Africa Bank / and it looks like the Public Investment Corporation want to snap it up. (that same PIC is the entity that is looking at investing a.o the pension money they manage in SOE's to support SA...…)

You decide how safe you think the time span of 5 years is.

JK
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Re: Africa Bank 13%

Unread post by Jack Welles » Thu Sep 12, 2019 6:48 pm

HJK 414 wrote:
Thu Sep 12, 2019 4:48 pm
Allison 501D13H wrote:
Wed Sep 11, 2019 9:48 pm
Good evening Gentlemen,

This offer from African Bank seems good. May I ask you folk, what am I missing? Yes, I understand simple interest Vs compounded interest. Yes, it’s a 5 year maturity date, and a lot can change between now and then. (I suspect it will). What’s the consensus out there? At the current climate ; Hypothetically a 1 million rand ‘flat’ will be less of an investment and possibly suffer capital gain loss.

Thoughts?
Thoughts …….. You are asked to place your money in a fixed deposit for 5 years - you can not withdraw it.

There is no Deposit Insurance Scheme in South Africa for banks - if the bank fails (or is folded) - you loose it all.

The SARB has announced that it may wish to sell it's 50% stake in Africa Bank / and it looks like the Public Investment Corporation want to snap it up. (that same PIC is the entity that is looking at investing a.o the pension money they manage in SOE's to support SA...…)

You decide how safe you think the time span of 5 years is. JK
A small heads-up. While I agree with everything you just wrote except that the PIC is looking at investing in "prescribed assets". The govt is looking at forcing all pension fund entities to invest +-3% of their assets in SOE's. So it's the other way around. This initiative is not coming from the PIC.
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Re: Africa Bank 13%

Unread post by HJK 414 » Thu Sep 12, 2019 7:26 pm

Jack Welles wrote:
Thu Sep 12, 2019 6:48 pm

A small heads-up.
While I agree with everything you just wrote except that the PIC is looking at investing in "prescribed assets".
The govt is looking at forcing all pension fund entities to invest +-3% of their assets in SOE's. So it's the other way around. This initiative is not coming from the PIC.

Eddie,

I did not know that actually - I based my comments on the fact that the PIC already has a 183 Billion Rand exposure to the SOE's without it being "prescribed", (of which 94 Billion to Eskom - iinm) and some of their Board proclaiming they will keep doing so...… that in my view was a concern.

https://www.businesslive.co.za/bd/natio ... r-the-pic/

https://www.obilesky.com/2018/12/13/pic ... tails.html

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Re: Africa Bank 13%

Unread post by V5 - LEO » Thu Sep 26, 2019 1:22 pm

....maybe a free tip to the investors playing the market, me thinks that the rand is going to be volatile and with good timing, a few bucks can be made? What says the rest of you?
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