WorldWide Markets with Simon Brown

JSEDirect 203: Budget 2016 and your investments

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Simon Shares
  • Woolies (JSE code: WHL) offering script of cash for dividend. Default is cash, I'm taking new shares.
  • Standard Bank (JSE code: SBK) trading update looks great, HEPS some 30% higher. But what of the R1,6bn write down for lost aluminium in China the previous year? The stock initially popped 8% higher but traded red by late morning.
    • Budget 2016, Simon's thoughts
    • Budget is R1.46tn vs R1.45tn in the October MTBPS.
    • Deficit R139bn, which we have to borrow and that cost is increasing as R186 government bond is 9.8% from 9.3%.
    • Budget deficit will fall from 3.2% in the 2016/2017 year to 2.4% in 2018/2019
    • Capital Gains Tax (CGT) gets increased from 33.3% or marginal rate to 40% while the amount of tax free CGT every year goes from R30k to R40k.
      • No change to Dividend Withholding Tax (DWT) or Securities Transfer Tax (STT).
      • Lots of small tax increases and some new ones;
        • Increased; fuel levy, bag levy, sin taxes, transfer duty on +R10m properties, etc.
        • New; sugar tax, globe tax and tyre tax.
        • Social grants on the up, R11.5bn over next three years.
        • Fiscal drag coupled with increased inflation and interest rates going to hurt consumers.
        • 150,000 TFSA accounts opened and R1bn deposited. But no changes to the limits.
        • Was it enough taxing and enough slashing to avoid a downgrade later this year?
        • Bottom line, can he stop the junk status looming over SA?
          • We Get Mail
          • Marcia
            • Are you selling your Woolies after the results?
            • Stef
              • I see the PLD and PLT ETFs have 'partial delisting'. What's this about? Should I worry if I hold them?

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                JSEDirect is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.

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