Dear Investor,

Our view of the month is a collage of some of the best places to visit in South Africa. This after our tourism industry took another devastating blow due to unfair, nonsensical, and arguably racist travel bans imposed on Southern Africa by advanced economies over the potential high contagion of the new variant of the coronavirus.

The Omicron variant was first detected by South African scientists through our advanced COVID-19 screening programs. Within 36 hours of discovering the new strain, scientists in the government lab in Durban alerted the world and began testing current vaccines against it. But instead of being applauded, we are being punished for our excellent work and scientists. To add insult to injury, subsequent reports confirmed that the strain was observed in Europe as early as mid-November’21 and that these cases had no links to South Africa.

We feel the cartoon below by Daily Maverick cartoonist Rico, sums it up the best:

But the damage was done, and our tourism industry has received cancellations in a mass. We are acutely aware that due to the pandemic the last 2 years, many South Africans may not be able to afford a holiday over the upcoming festive period. For those lucky enough to be able to go on a well-deserved holiday, we would like to request that you support local.

In this month’s newsletter we cover the following topics:

1.   Omicron and South Africa
2.   Disability vs Dread Disease insurance
3.   Capital protected investment opportunities
4.   Rand forecasts
5.   Fuel Prices
6.   Chart of the month
7.   Interesting stats for the month
8.   Market stats summary
9.   Financial indicators as at 30 November 2021
10. Disclaimer
11. Thank you!


1. Omicron and South Africa

Dr. Coetzee, chair of The South African Medical Association and a member of the Ministerial Advisory Committee on Vaccine, is reported to have noted very mild symptoms so far with the new variant “which did not fit in the clinical picture” of the delta variant. “The most predominant clinical complaint is severe fatigue for one or two days. With them, the headache and the body aches and pain.” The Omicron variant is currently seen as potentially much milder than the delta variant, with patients able to be treated at home.

While early indications appear to show that the Omicron variant has less severe symptoms than the delta variant, there is still uncertainty as more people are now vaccinated compared to during the third wave driven by the delta variant.

In South Africa, the President’s speech confirmed that “41% of the adult population have received at least one vaccine dose, and 35.6% of adult South Africans are fully vaccinated against COVID-19.”

“57% of people 60 years old and above …, and 53% of people aged between 50 and 60 are fully vaccinated. Government has set up a task team that will undertake broad consultations on making vaccination mandatory for specific activities and locations.”

“We also know that the coronavirus will be with us for the long term. We must therefore find ways of managing the pandemic while limiting disruptions to the economy and ensuring continuity.”

“However, this approach will not be sustainable if we do not increase the vaccination rate, if we do not wear masks, or if we fail to adhere to basic health precautions.” “Until everyone is vaccinated, we should expect that more variants will emerge.”

“These variants may well be more transmissible, may cause more severe disease, and may be more resistant to the current vaccines.” However, many viruses have been shown to weaken over the years as they become entrenched globally, often proving seasonal.

*Credit to Investec for much of the above content


2. Disability vs. Dread Disease insurance

There are multiple types of insurance that are designed to protect one of your biggest assets: Yourself. Think health insurance, life insurance, disability as well as dread disease insurance.

Whilst most individuals understand the concept of disability and dread disease which have similarities because it assists you and your family in difficult unexpected personal events, they have many important differences and provide solutions to different financial protection needs.


Disability insurance (Comprehensive range)

  • Income range – Benefit provides a monthly payment that replaces up to 100% of your after-tax income if you can’t work due to an injury or illness. Your income is covered if you suffer a temporary or permanent inability to work or suffer a permanent impairment
  • Lump sum range – Benefit provides a lump sum pay-out should you be permanently disabled and unable to do your specified occupation or if you are impaired it will pay-out according to severity percentage


Dread Disease insurance

  • This benefit provides a lump-sum payment (if standalone – multiple claims for unrelated causes) that you can use as you wish, if you experience one of the serious conditions as defined by your protection, such as cancer, heart attack or stroke. We do know, that if one of these illnesses or events were to happen to you, there will be an impact on your lifestyle. The lifestyle you have worked so hard to achieve. What’s more, your recovery may require costly assistive devices, or even travel expenses – things disability insurance may not cover


Disability insurance Dread Disease insurance
Why should I get it?
Life happens – Most individuals live pay-cheque to pay-cheque. If you are unable to work due to injury or illness, disability insurance can help you keep your desired lifestyle by replacing up to 100% of your after-tax income.  

Getting sick is expensive – A critical illness can be expensive. Lost income if you can’t work, medication, treatment costs. With Dread Disease insurance, you could have the money you need to get the most advanced treatment.


What would I use the money for?
Income range – The money you get is supposed to cover costs normally covered by your income. This could include your utilities, bond, or rent, groceries, schooling, and other household expenses.
Lump sum range – Settle debt or adaptation costs around the house or custom-made prosthetics
  • Cover higher-than-expected medication costs
  • Home modifications and custom-made prosthetics
  • Private nursing
  • Employ a housekeeper so you and your family can spend less time doing chores and more time together
  • Get away from it all – go on a trip with your family while you recover
  • Basically anything you want…
How long does it take to pay out?
Income range – Your monthly payments typically start after you’ve been off work with a covered disability for between 30-120 days, depending on the benefit selected/granted.
Lump Sum – Pay-out as soon as permanence is established
Most insurers have a 14-day survival period on standalone benefit and some pay-out as soon as you are diagnosed with a listed condition and meet the claims criteria


Who can apply?
Employed people – Disability insurance covers you for an amount based on your salary Anyone – Parents, grandparents, even children (through their parents or grandparents)

Should you wish to review your current benefits or would like to add this to your existing policy, please send Michelle an email at


3.  Capital protected Investment opportunities

With interest rates currently at historical lows and equity market uncertainty, capital protected investments might be a solution for savers or conservative investors with a low-risk appetite.

Capital protected investments are investments that offer full to partial capital guarantee (expressed as a percentage) on the initial invested amount. The percentage of capital protected usually depends on the underlying investment’s performance.

Capital protected investments are usually scarce at end of year and as a result we only have one opportunity in this newsletter. To keep it interesting, we thought we’ll compare the Liberty Global Performer ESG V1 Portfolio to the latest Investec autocall structure which we promoted during November’21.

It is important to note the Investec Autocall has already closed and the Liberty opportunity is closing on Friday 3 December’21:

Issuer Liberty Investec
Structure name Global Performer ESG V1 Portfolio Euro Stoxx 50 Autocall
Underlying index MSCI Global Diversified ESG
100 Decrement 5% index
Euro Stoxx 50
Term 5 years Minimum 3Y and max 5Y
After tax return if index positive 12% pa for individuals

10,85% pa for companies

11.89% pa for individuals (assuming 45% marginal tax rate)

11.25% pa for companies

Share in growth above return Yes No
Capital protected First 30% drop First 40% drop
Risk Index drops more than 30% Index drops more than 40%
Fees Priced in Priced in
Enhanced allocation >R1m = 1% enhanced allocation
>R3m = 2% enhanced allocation
ZAR depreciation protection / Fluctuating currency No No
Minimum R250k R100k
Closing date Friday 3 December’21 Closed

*Characteristics highlighted in bold are better

Conclusion: It is clear that the above capital protected investments compare very well. Investors that were therefore not able to participate in the Investec opportunity, can invest in the Liberty opportunity with a clear conscience.


4. Rand forecasts

The rand strengthened to R15.85/USD today, from R16.37/USD on Friday 26 November’21 as news of the Omicron variant broke widely and travel bans were instituted against SA. In Sunday night’s address to the nation, President Ramaphosa confirmed that “if cases continue to climb, we can expect to enter a fourth wave of infections within the next few weeks, if not sooner.” Overall, he took a sensible approach, without any increase in lockdown levels.

The rand gained some cheer from the speech, with the President emphasizing that “we already have the tools that we need to protect ourselves against the new Omicron variant of COVID-19”. The Rand however remains at risk and will remain highly volatile. Non-farm payrolls data out on Friday 3 December’21 and a strong number will boost market expectations of quicker Quantitative Easing (QE) tapering, although the global increase in COVID-19 infections, particularly in the US, will be a concern for the Federal Open Market Committee (FOMC)

With the next FOMC meeting statement on 15th December, the Rand could weaken over the coming weekend and into next week if the US posts robust jobs data. The US dollar has seen marked strength, and this would be set to persist on a quicker US QE taper.

While the rand typically sees substantial strength over the turn of the year, it is being impeded this year by the first phase of the normalisation of US monetary policy, and so the domestic currency will be vulnerable to weakness over next year as well.

Lastly, it is worth mentioning the Rand has strengthened by the largest margin since Friday out of the Bloomberg basket of emerging market currencies, despite some US dollar recovery. However, risk aversion remains elevated and as a result, emerging market (EM) currencies remains vulnerable.

Below Investec’s “expected case” exchange rate forecasts as published on 29 November’21:

*Data summarised from Investec Rand Note


5.  Fuel prices

At the start of November’21, petrol prices were hiked by R1.21, while diesel increased by R1.48. Now in December’21, the petrol price went up another 75c per litre and diesel went up 72.5c a litre (0.05% sulphur) and 74.5c (0.005% sulphur).

Local fuel prices are determined by international oil prices – as well as the dollar-rand value, as South Africa buys oil in dollars. The latest fuel price hikes are due in large partly to a sharp fall in the rand against the dollar, which averaged at R15.85/$ over the past month, compared to R14.72 the previous month. The average oil price also increased from $82.50 a barrel to $83.

The latest fuel price hike comes ahead of South Africa’s key travel season. Rising fuel prices, electricity price increases, and the fact that retailers typically hike their prices in the festive season, creates a bleak outlook for Christmas in South Africa.


6.  Chart of the month

The chart shows producer price inflation (PPI) for the US, China and Eurozone since 1995. PPI measures inflationary pressures at an earlier stage in the production process. Changes in commodity prices will directly affect this number. As shown, PPIs have been soaring globally to their highest levels in decades. In the US, PPI rose to 8.6% year-on-year in September, with larger increases in China (+13.5%) at a 26-year high, and the Euro Area (+16.0%), the highest on record.

For almost all of 2020, PPI in these regions was in negative territory as the pandemic-induced lockdowns suppressed consumer demand. More recently, price pressures have been building as a sharp recovery in demand from consumers has coincided with supply chain disruptions, commodity price increases and shortages of labour that have pushed up costs for businesses. Some of these rises in producer prices are inevitably finding their way into consumer prices: CPI in the US rose by 6.2% over the 12 months to October, and as with PPI, a key driver of the sharp rise was the energy component, up 25% over the past year, during which the crude oil price was up by 125% to October end. There is no doubt that the rise in inflation is proving to be steeper and more persistent than expected, testing the resolve of central banks to stick to their ‘transitory’ view of inflation.

*Credit to Momentum Global Investment Management for the chart of the month


7. Interesting stats for the month

  • $8.5bn – the amount that partner countries (US, UK, France and Germany) will mobilise to assist SA move to a low-carbon economy
  • 12.3 million (of 26.1 million registered voters) – the number of South Africans who voted in the local government elections
    16% – the % by which the number of listings on the JSE has fallen over the past decade (down to 331 listings from a peak in the ‘90s of 850!)
  • $1 trillion – the value of companies that went public this year through IPOs
  • 1 of 4 IPOs in 1999 are blue chips today – Bank of America Merrill Lynch advice to investors is to be selective
  • 57m tons CO2 annually, emitted by Bitcoin mining (115 million transactions p.a.) – more than double Ethereum’s – or half a ton of CO2 every time you tap the app to buy a latte
  • $176 in electricity, per single Bitcoin transaction—even buying a latte— consumes 1,173kw hours of electricity. The volume of energy that could “power the typical American home for six weeks”
  • 300m new trees – needed to offset the massive carbon footprint generated by Bitcoin mining, by far the biggest expansion of the world’s forests
  • 30% (yoy) increase in global food prices – To the highest level in over 10 years (UN Food and Agriculture Organization)
    10 million – the amount of Pfizer Covid treatment pills the US has ordered.
  • 43% – the percentage of Americans aged 18 to 29 living with their parents.
  • Today’s PE only makes sense if the S&P 500 falls 40% or EPS grows 70% – According to Bank of America Merrill Lynch

*Credit to Kim Litter from Ninety-One for the above interesting stats


8. Market stats summary

The red block shows the market stats for the month of November 2021. In short, the JSE All Share Total Return index was up ↑4.5% for the month (up ↑28.5% for the last 12 months). The Resources sector was the best performing sector for the month, up ↑6.5% for the month. The Industrial sector also performed well up ↑5.7%, while the Listed Property sector was also up ↑2.2%. The Financial sector was the only sector negative for the month, down ↓2.6% while increased interest rates will be good for this sector.


9. Financial indicators as at 30 November 2021

Global indices:

*NB! Returns are measured in Rand percentage points. For example, the S&P 500 was up 3.55% for the month as measured in Rands

JSE Sectors:


*NB! Positive indicates ZAR has weakened for the period, vice versa

Interest Rates:


10. Disclaimer

The information contained in this e-mail is of a general nature and is not a substitute for professional advice. We recommended that you obtain specific professional advice before you take any action. Vista Wealth Management takes all reasonable steps to ensure that the content of this e-mail is accurate and up to date, however, errors and omissions may occur. The accuracy of the information contained should therefore not be relied upon as a statement of fact.


11. Thank you

Even though we will only be closing for the festive period on 15 December’21, our cellphones will remain on. We would like to take this opportunity to wish you and your loved ones a peaceful, safe, and blessed festive season. Many thanks for all your support during 2021



Call me!