Gird your loins for a tough 2016

SUZANNE BELLING

Says Michael Bagraim, MP and veteran Jewish communal leader, “We ended 2015 on an incredibly difficult note where our president has almost singlehandedly destroyed our economy. 

“We go into the new secular year with the rand almost having collapsed and the rating agencies are just about to relegate us to junk status. We also enter 2016 where the majority of the business community see no reason to create jobs and much of the regulatory environment acts as a hand brake for job creation, which is the real elephant in the room.

“We will start almost immediately building up to the local elections which will be held in May. Service delivery will be one of the main issues and the government will try to do everything in its power to ensure that both electricity and water are kept on an even keel until just after the elections. Clearly 2016 and onwards will result in massive service delivery problems.”

Bagraim feels minority communities will be used as “wedge issues” in the run-up to the local elections. “It is absolutely clear that the ruling party is going to make a desperate bid to try and recapture the Cape Town Metropole. 

“One of the ways in which the ANC has run previous elections is to run a negative campaign and try and invoke a dispute between minority communities and the majority. “Negative campaigning often involves South African Jews and on a few occasions this does devolve into anti-Semitic comments during the heat of campaigning.

“We as a Jewish community need to understand that anti-Semitic comments will be reported to the South African Jewish Board of Deputies who will pick up the cudgels on our behalf. We also need to understand that despite the use of negative campaigning, it does not mean that the majority of that political party is anti-Semitic and that the country has become untenable. 

“Politically, 2016 will be stressful for us as a community, but if we understand the reasons behind this stress, it will be easier to cope.”

Brian Kantor, chief strategist and economist at Investec Wealth and Investment, says the South African economy will meander along at a slow pace in 2016.

There will be some growth, but no pick-up, although a recession is unlikely.

But the “Zuma episode” – the severe consequences of the firing of Finance Minister Nhlanhla Nene – has made us weaker.

“I feel much better now that Cabinet stood up to his [Jacob Zuma’s] selfish, authoritarian tendencies.”

Fiscal authority and skills are now in the right, competent hands, Kantor says, although the markets are not back to where they were before the dismissal of Finance Minister Nhlanhla Nene.

The weak oil price is helping the country. It is down in rand terms as well as in dollars – the weak local currency has not yet pushed up the rand price of oil.

“That is a plus – otherwise inflation would be rising,” he says.

“Hopefully the Reserve Bank doesn’t raise rates – it would be a big mistake. The Reserve Bank should just stand pat.”

The government should demonstrate a lot more respect for market forces, for businesses that work well.

Delegating many economic functions to private business would help, such as the SA Airways and the Post Office, but the government seems unwilling to do this.

On the labour front, Kantor says the national minimum wage is “a disaster waiting around the corner. That is something we should worry about.”

It will be a very tough year because of all the uncertainty around South Africa, according to Bryan Hirsch, director of investment advisers Bryan Hirsch and Colley.

“Markets will be very volatile. The reason for this is currency uncertainty, with the strength of the dollar and also concern about the possible weakness in the Chinese economy,” he says.

“However, many companies who have geared up and structured their businesses correctly are well positioned to compete, both nationally and internationally.”

Hirsch said that if overseas investment agencies downgrade South Africa’s investment rating further, “it could have a horrific impact in this country.

“Our Treasury is going to have to do some very fast talking to the rating agencies to satisfy them not to downgrade South Africa further.”

If this happens, interest rates will rise, which means higher inflation.

“The borrowings of many in South Africa who have debt will cost them so much more to finance.”

From an investment point of view, “if your portfolio is structured correctly, you’ve just got to sit tight and look to some good local and offshore opportunities”, he says.

Fashion guru Charlotte Resnekov, owner of Ten to 4 boutique, who was on the list of South Africa’s best-dressed women, foresees “Victorian flounces, pussycat bows, lace and sheer fabrics worn with slips and camisoles showing through, as the fashion trends for 2016.

“Soft and sensual suede from the ’70s, also fringing on shawls, kimonos, sleeves, the hems of dresses and on bags, is a definite trend.”

Hot colours for 2016 are peach, rose quartz pink, coffee, lilac, grey, blue and navy. The brights are red, green and a touch of yellow.

The winter look will incorporate greys and blacks, with lots of jerseys and slouchy pants.

“My advice for 2016 is to choose a trend that suits your age, lifestyle and of course body type.” There is plenty of choice, says Charlotte, who dresses her clients from top to toe, and keeps a selection of hats to lend them to complement her outfits for special occasions.

“Remember fashion is a lot of fun, but is transient… style is forever!” she says.