We recently had the pleasure of attending SiGMA Malta where we had the chance to meet with some of the most prominent players in the eGaming field.
Capital International Bank (CIB) has long been supportive of an industry which plays such a critical part in the Isle of Man’s economic ecosystem and this trip was further reaffirmation of our commitment to providing banking services to gaming operators and the wider industry.
Attending the final eGaming show of the year was a great experience with SiGMA Malta proving to be a huge hit for everyone in attendance. It was fantastic to meet up with some familiar faces and to receive some excellent feedback on the banking services we provide to the industry.
It was also brilliant to see so many organisations with an Isle of Man connection, ranging from Digital IOM and the Isle of Man Gambling Supervision Commission, through to various Corporate Service Providers and licensing specialists.
SiGMA Malta also presented a huge opportunity to meet first class operators, software providers and industry experts, allowing us to understand the latest industry trends, whilst also showcasing CIB’s proposition to prospective clients.
During these conversations, one theme arose time and time again: the challenge of obtaining genuine banking for businesses in the industry.
We know that the process of opening a corporate bank account is typically protracted, operationally intensive and sometimes exasperating for corporate clients.
We have identified several common issues that clients often encounter:
Simply put, Capital International Bank has been designed to alleviate these issues.
First of all, we are a regulated bank holding a Class 1 (2) licence under the Isle of Man’s Alternative Banking Regime. This enables operators to obtain banking with a licensed bank as part of their own license conditions. Furthermore, we are subject to the full range of prudential regulation regarding capital, liquidity and market risk requirements that come with holding a banking license. This differentiates us from money transmission license holders who are not subject to the same requirements.
We also offer quick decision-making from our team headquartered in the Isle of Man and will let you know whether you are eligible for a bank account within just 24 hours. New accounts are then opened relatively quickly, not taking months like most other banks, avoiding the dreaded ‘slow no’ and protracted account opening process.
Once onboarded, our clients are then able to access our bespoke, purpose-built digital banking platform and our suite of interest-bearing solutions, including same-day access fiduciary accounts with competitive rates of interest.
Please note: Currently, we cannot accept direct player deposits or provide accounts for gaming operators in USD or crypto currencies directly. However, we have a money market fund solution for USD segregated player funds in the wider Capital International Group, which has been approved by the IOM GSC.
If you would like to know more, please do not hesitate to reach out to us at cib-bd@capital-iom.com
Disclaimer: The views, thoughts and opinions expressed within this article are those of the authors and not those of any company within the Capital International Group (CIG) and as such are neither given nor endorsed by CIG. Information in this article does not constitute investment advice or an offer or an invitation by or on behalf of any company within the Capital International Group of companies to buy or sell any product or security or to make a bank deposit
Capital International Bank Limited is a wholly owned subsidiary of Capital International Group Limited (www.capital-iom.com) a privately owned financial services group based in the Isle of Man. Capital International Bank Limited is licensed by the Isle of Man Financial Services Authority and operates as a non-retail, restricted deposit taker under a Class 1 (2) licence. Deposits are not covered by the Isle of Man Depositors’ Compensation Scheme and terms and conditions apply. Capital International Bank is the trading name of Capital International Bank Limited. Capital International Bank Limited is also licensed by the South African Reserve Bank Prudential Authority to conduct the business of a Representative Office in South Africa.
After saying our Goodbyes to the children and staff at the Orphanage, a few of us (Werner Alberts, Jamie Wade, Karen Le Moal, Leanne and John Venables) decided it would be a good idea to climb Kilimanjaro!
We also had Mike, a family friend of Werner’s join us for the Trek. Mike and his Mum had always dreamt of climbing Kilimanjaro together but sadly she passed away following a short illness a few months earlier. When Mike heard about our trip, he asked if he could join us and of course we were more than happy to help him follow a dream in his Mum’s memory.
Kilimanjaro is the highest mountain in Africa and the highest free-standing mountain above sea level in the world, standing at 5895m (19,340ft).
With high expectations, Werner enrolled us all on the shorter 5-day Marangu Route (Coca Cola route) which had the lowest success rate of them all at just 50%. On the plus side though, this route unlike the others, had wooden style dormitory huts to sleep in rather than camping.
Day 1 - We were picked up from the hotel on Monday morning where we were greeted by our guides and a bus full of porters. The Porters would be carrying our bags, all the food, water, cooking equipment and their own items all the way to the top base camp.
We had a 2-hour journey to Marangu Gate and it was amazing to see how the landscape changed from dry dusty roads and fields to lush green tropical plants and farms.
On arrival at the gate we were gifted with a delightful lunch box (we were now sick of these things) and once all the paperwork was sorted by our guide, we began our accent. We were walking approximately 5 miles heading for Mandara Hut which sits at 2700m high.
The walk was beautiful and we all felt it was like walking through Ballaglass Glen but with the addition of Monkeys.
Day 2 - Todays walk was around 7 miles and we were headed for the Horombo Hut which sat at 3720m. The landscape changed quite quickly once we set off from Rainforest to Moorland.
They even had fibre broadband all the way to Kibo Hut!
Day 3 - Today we walked around 6 miles to Kibo Hut at an altitude of 4700 meters.
The landscape was now alpine desert and it started to feel colder. Our guides would often quote the words “Pole Pole” which translates to ‘Slowly Slowly’. Going slowly allows your body more time to acclimatize to the higher altitude and lack of oxygen.
We arrived at Kibo in time for a late lunch and tried to get some sleep before leaving for the summit at midnight.
Day 4 - After trying unsuccessfully to get some sleep (excluding Karen who seemed to be able to sleep at any given point), we ate (excluding Leanne who didn’t seem to be able to eat at any given point) and set off at midnight to the summit.
We began walking very, very slowly in the pitch black with only our headtorches to light up the feet of the person in font. Altitude sickness had now set in with us all feeling some or all of the affects such as headaches, sickness, dizziness and low energy. Oxygen levels at this altitude are down to around 40% of that found at sea level making it feel like you are only working on one lung. You have no choice but to shuffle along, pole pole!
Hours passed by and every time you looked up you could just see lights from other walkers that appeared to be directly above you.
Eventually we finished climbing the worst of it and began to make our way around the volcanoes crater. Watching the sunrise from above the clouds at this altitude with the curvature of the earth was just amazing! We continued walking around the crater, past the ice glaciers and eventually, after 6.5 hours of climbing we reached Uhuru Peak, the summit!
Reaching the top was very emotional for some of us. Mike scattered some of his mother’s ashes and we all took a moment to appreciate what we had done.
The altitude was tough up here though, so we got a quick photo and began our descent back down to Kibo. We stopped at Kibo for a couple of hours, had some food and set off again to get down to our accommodation for the night at Horombo Huts.
Absolutely exhausted, we had some tea and got our heads down for the night! Refreshed and ready to the final leg.
Day 5 - We had a laugh on our way back down the mountain. Relieved it was done and shouting Good Luck to all the poor people just setting off. Werner even caught a lift in the mountain ambulance!
Once we arrived at the gate, we had a lovely lunch with all the porters and team who sang songs to us and presented us with our certificates. In total we had walked over 43 miles, climbing to a height of 5,895metres (19,340 ft).
There were so many funny moments on the trip, a strong team bond was formed and so many memories were made that we will all share forever.
The joy of a clean toilet will never be underestimated again.
Disclaimer: The views, thoughts and opinions expressed within this article are those of the authors and not those of any company within the Capital International Group (CIG) and as such are neither given nor endorsed by CIG. Information in this article does not constitute investment advice or an offer or an invitation by or on behalf of any company within the Capital International Group of companies to buy or sell any product or security or to make a bank deposit
The sands of time are fast running out on the current UK parliament. We have just witnessed what will almost certainly be the final set of Party Conferences before the next UK General Election.
In theory this might take place as late as January 2025 but Conservative Party strategists have already earmarked three potential dates next year - 2 May (to coincide with local elections), 20 June (to allow those local contests to test the political temperature) and 3 October (to enable the impact of any economic recovery to be maximised before going to the country).
The Conservatives have been in office since 2010 and the fifth consecutive term they are seeking would be unprecedented in the age of universal voting. Turbulence has been the new normal in British politics since the referendum of June 2016 when the UK people voted to leave the European Union. Remarkably it has been the Conservatives who have retained office throughout this period, winning two elections and holding office under five different Prime Ministers. However, the political and economic disruption caused by Brexit has been compounded by the adverse impact on the cost of living of the covid pandemic and the Russia-Ukraine war. Inflation is at a 40 year high and our national debt has almost tripled since the Conservatives came to office.
After all this upheaval there are now deep ideological and personality divisions within the Conservative Party. Privately most of its MPs expect the next election to be lost; the sense that it is 'time for a change' is now overwhelming. Indeed the current Prime Minister, Rishi Sunak, implicitly recognises this. His fresh pitch at last week's Conservative conference was a daring one - to position himself as the candidate of change, rejecting the short-termism of all of his recent predecessors. This has clear risks. For one it has antagonised former leaders - everyone understood that there was no love lost between Sunak and either Johnson or Truss, but in recent days David Cameron and Theresa May have also been publicly critical of him.
Sunak is a highly intelligent, diligent administrator never happier than analysing data and spread sheets. After the chaotic drama of recent years he offers competent, stable governance. But in truth he probably lacks the inspirational qualities that are also now needed to revive the Conservatives' fortunes. The opinion polls have been remarkably consistent since the beginning of the year and they all point to a crushing Conservative defeat. The events that are now playing out in Israel and Gaza may also pose a huge threat to short-term global economic confidence and growth. If history is any guide, a surge in oil and gas prices may drag Western economies into a recession over the next year or so, which is likely to be to the detriment of incumbent governments having to seek re-election.
Nevertheless it is worth remembering that one of the great charms of politics is its sheer unpredictability. It was only a little over two years ago (May 2021) that the Conservatives won the traditionally safe Labour seat of Hartlepool on a massive swing at a by-election. The confident talk then was that the 2020s would be the Boris Johnson decade and most commentators wrote off the prospects of Sir Keir Starmer, invariably predicting that he would end up as just another name in a lengthening list of former Leaders of the Opposition before Labour eventually made it back into office.
Today the self-same political experts are absolutely adamant that Starmer will win the next election. Perhaps he will - but to his credit he and his team are taking nothing for granted. The tide began to turn on his leadership not only as a consequence of unforced government errors, but when Starmer was able to persuade people of the calibre of Rachel Reeves (Shadow Chancellor) and Yvette Cooper (Shadow Home Secretary) to return to the front bench fold.
They have been followed more recently by a stream of high-flying civil servants in key back room roles. A further bloc of experienced operators from the Tony Blair and Gordon Brown foundations have also returned to the colours as Government office now appears within their grasp.
One of the reasons we have heard much in recent months about Labour's plans for constitutional change and blue sky thinking about reinventing the public sector is the implicit recognition that the state of the public finances will give any incoming Labour government very little room for manoeuvre on public spending.
Here is the strange paradox. Since the financial crisis of 2007-08 and the era of stagnant or diminishing living standards UK voters have moved well to the left on economic issues. Today a majority even of Tory voters support renationalising public utilities, such as water and the railways, and introducing wealth taxes for the super-rich. But this falling away of public support for free markets and capitalism has not resulted in people being persuaded to vote for Labour politicians espousing these values. This will lie at the heart of the Labour appeal over the next year which is likely to focus more on stability than radical change.
The strapline of Keir Starmer's speech at his Party's conference was a "decade of national renewal". This echoes recent interventions and interviews from his most prominent and trusted younger generation spokesmen from Rachel Reeves to Wes Streeting and Jonny Reynolds. It is an express call for at least two terms of government. In the first the offer is to stabilise the UK economy and public services; only in a second term will radical new centre-left investment and initiatives be possible. Ironically after 13 years of Opposition Labour's appeal is more one of security and stability rather than change. This mirrors the strategy in 1996-97, the last time Labour came into office (under Tony Blair) when the essential message was change the faces in government but not to do anything too radical in policy terms.
Many of Labour's most fervent supporters are looking for a much bolder approach. But they are unlikely to get their way. Instead the 'steady as she goes' strategy is playing out in two other ways. First in the ruthlessly tight grip that the leadership has taken over candidate selection. It is very wary of any internal dissent and wants only compliant centrists to make up the bulk of the incoming parliamentary party. This is a far cry, incidentally, from many new MPs in the 2017 and 2019 intakes who were left-wing activists in the image of the then party leader, Jeremy Corbyn. Many of these MPs have kept their own counsel in recent months, but they will remain a presence on the Labour benches for years to come.
Finally in the area of tax and spend, Starmer and Reeves are determined to take an orthodox approach and will likely emulate Blair/Brown in the run-up to 1997 by pledging to keep to the outgoing government's budgetary plans. We were then blind-sided by Gordon Brown rustling up some 'new' money, so to speak, by altering what appeared to be arcane rules by abolishing substantial tax relief on dividends that pension funds received on their investments. This £6 billion annual tax grab along with the 3G spectrum auction which brought in an unanticipated £20 billion windfall gave the incoming government something to invest. It is worth thinking now about equivalent opportunities that an incoming Labour Chancellor might pounce on to give herself some room for fresh initiatives.
Disclaimer: The views, thoughts and opinions expressed within this article are those of the authors and not those of any company within the Capital International Group (CIG) and as such are neither given nor endorsed by CIG. Information in this article does not constitute investment advice or an offer or an invitation by or on behalf of any company within the Capital International Group of companies to buy or sell any product or security or to make a bank deposit
Welcome to the Quarterly Investment Review for Q3 2023.
Our Investment team have put together a range of resources to update you on what has happened in the markets across the third quarter of 2023. Here you will find:
The graph below shows global equity performance across the quarter and plots world events along the performance line.
Relationship and Business Development Manager, Donald Beggs and Head of Funds, James Fitzpatrick, discuss important topics from across the quarter, including interest rates and the clean energy sector.
Business Development Consultant Tatenda Chikombero interviews Business Development Manager, Lerato Lebitsa on the current landscape for investors in South Africa and the role offshore investment plays.
Portfolio Manager Matthew Seaward explores the performance of Emerging Markets over Q3.
Global equity markets posted losses during the third quarter; with the US, EU, and Japan falling -3.7%, -5% and -5.6% respectively in home currency terms. The Chinese market fell over 3% while Hong Kong was also weak, down over 7%. The UK equity market proved to be more resilient owing to its ‘value’ tilt and high exposure to oil and financial stocks achieving a positive return of 0.8%. This also reflected the relative cheapness of UK valuations which have not become as stretched as US valuations on a year-to-date basis.
Market sentiment was overall positive in July especially in the US where the AI rally continued to gain momentum, driving markets higher. Chip maker Nvidia was a notable beneficiary, reporting Q2 revenues of $13.51 billion, up 101% from a year ago and 88% from the previous quarter. However, as central banks began signalling to markets that rates would likely remain high and indeed ‘higher for longer’, and that a pivot in policy expectations towards cuts was not imminent, equity and bond markets both began to suffer. The reality of potentially higher peak interest rates also led to global government debt selling off as yields rose. This was reflected most markedly in the US bond market, where the US 10-year Treasury yield touched 16 year highs of 4.6% in late September as Fed officials guided that ongoing inflationary pressures could see interest rates remaining on an upwards trajectory.
The prospect of higher interest rates becoming the new normal has hurt equity valuations as higher discount rates are factored in for longer periods. This has also put strain on company growth prospects for those companies previously reliant on cheap debt for financing. Such a background has resulted in a poor August and a notably painful September for markets.
In terms of macroeconomic figures, August CPI readings for the US came in at 3.7% YOY while UK CPI remained high at 6.4% YOY. US Q2 GDP grew at a healthy annualised rate of 2.1% while UK Q2 GBP grew at 0.2%. UK wages also grew 7.3% in May ahead of expectations, an indication that the labour market remains tight.
Markets were indecisive about a rate rise in September, but in the event UK and US central banks chose to pause, with the US Federal Reserve staying put at 5.5% and UK Bank of England also holding at 5.25%. However, the European Central Bank increased the Deposit Rate from 3.75% to 4%. Rates are likely to be held at or close to current levels until well into next year, and yield curves are still inverted, with US Treasury 2-year yields at 5.1% and the UK Gilt 2 year at 4.7% alongside 10-year yields at 4.4%. in conclusion, we are unlikely to see any material cuts to interest rates until it is clear to central banks that inflationary pressures are well under control. It was noteworthy that Fitch downgraded the US long-term Issuer Default Rating (IDR) from ‘AAA’ to ‘AA+’ in early August on concerns about growth in government debt and on the ability of Congress to control spending, though this had little effect on markets.
Asian markets were shaken in September by the news that embattled Chinese property giant Evergrande was plagued by further issues. The stock itself was again suspended only a month after it had resumed trading following a 17 month suspension. Another Chinese property giant, Country Garden, also narrowly avoided default after reporting record losses and debts of more than $150bn. This weakness is a material concern as the Chinese property sector accounts for around 25% of China’s GDP and the bursting of the Chinese property bubble raises contagion concerns. China Q2 GBP grew 6.3% year on year, below expectation, and growth fell 0.6% quarter on quarter. Consumer spending, investment and trade all remain on the weak side, and the economy is only expected to grow 4% over the year as a whole.
Though gold typically acts as an inflation hedge, gold was down -3.7% in USD terms to $1848 against the higher interest rate background. During the quarter we exited our gold position and redeployed the proceeds into Treasuries and high yield fixed interest to take advantage of the high yields available. In contrast oil rallied by 27.3% in USD terms over the quarter to $95 a barrel. The US Dollar also appreciated against most currencies, up by 4.1% against Sterling over the quarter.
We find ourselves in an uncertain environment as the pressures of growth, inflation, and monetary and fiscal policy vie against one another, increasing the range of potential forward macroeconomic outcomes. Most global equity markets remain positive in the year to date, but for now we must cautiously assess developments as they take place, keeping an eye on valuations, the economic backdrop, and central bank responses. Inflation risks persist and central banks continue to monitor their progress in curbing inflation. There also remains the question of whether central banks will indeed pull off a soft landing or if the slowdown will be more severe. Central banks may be forced next year to adopt a more dovish stance if economic data suggests more damage is being done to the economy than necessary, but it remains too early at this stage to be sure. In this scenario, quality companies with strong balance sheets and good cash flows are key, and we will aim to add to such should valuations fall much further.
Disclaimer: The views, thoughts and opinions expressed within the articles, videos and soundbites are those of the authors/ speakers and not those of any company within the Capital International Group (CIG) and as such are neither given nor endorsed by CIG. Information in this article does not constitute investment advice or an offer or an invitation by or on behalf of any company within the Capital International Group of companies to buy or sell any product or security or to make a bank deposit.
Regulated investment activities are carried out on behalf of Capital International Group by its licensed member companies. Capital International Limited and Capital Financial Markets Limited are licensed by the Isle of Man Financial Services Authority. Capital International Limited is a member of the London Stock Exchange. CILSA Investments (PTY) Ltd (FSP No. 44894) and CILSA Solutions (PTY) Ltd (FSP No. 6650), t/a Capital International SA are licensed by the Financial Sector Conduct Authority in South Africa. All subsidiary companies across both jurisdictions are represented under the Capital International Group brand.
2023 has been a frustrating year for global financial markets thus far as expectations have continued to reset in response to global inflation and interest rate shocks. After a tumultuous 2022, investors understandably hoped and expected to see a stronger rebound this year. But every wave of optimism has thus far been swiftly stamped out by the sober warnings from central bankers, with ‘higher-for-longer’ interest rates being their default policy response until inflation is well and truly tamed.
Against this backdrop, PRISM has performed in line with its peer group, with PRISM H5 posting modest gains of +1.65% year-to-date in GBP terms (+3.7% in USD). The longer-term performance history of PRISM H5 remains strong relative to peers as illustrated below.
The unique structure of PRISM, where the returns of all profiles are driven from a single highly diversified master strategy, has resulted in lower risk PRISM profiles significantly outperforming their respective peers, while higher risk PRISM profiles have lagged pure equity only and growth strategies in the short term. This is due to the very unusual behavior of markets this year and longer term we believe the diversified nature of the PRISM master strategy will outperform less diversified strategies as markets normalise.
The scale and speed of the inflation shock and the interest rate response is unprecedented in recent history, with inflation reaching double digits in much of Europe and interest rates rising by over 5% in the US and UK in little more than a year.
Most of the hit to markets came in 2022, with all asset classes falling significantly but with fixed income and real estate being the biggest fallers. Extraordinarily, 10-year government bonds (traditionally viewed as a ‘safe haven’) fell in value by nearly 40% in a matter of months.
In the face of persistent inflation, we added to assets we believed would be able to maintain their real value over time, including real assets like commodities and precious metals, and trimmed our property and infrastructure holdings. Over the medium term only equity has the ability to respond to high inflation with higher earnings and despite short term volatility we largely held onto our high quality equity weightings throughout.
This strategy proved largely correct, with equities, commodities and alternatives holding up relatively well.
We were very underweight in bonds at the start of 2022, and in hindsight we were too quick to add to bonds as yields rose. Like many others, our initial view was that the inflationary spike was likely to be short lived and that the rapid rise in interest rates was an opportunity to lock in bonds yields that were starting to look attractive for the first time in many years.
While we were too early, we strongly believe this strategy will prove to be correct. UK and US treasury bonds are yielding 4.5% and 4.25% respectively, levels we’ve not seen for 15 years or more. The balance of risks is now firmly skewed to the upside for these bonds in our view. Similarly, high quality corporate bonds are yielding 6% or more and high yield bonds giving over 8%.
For the first time in well over a decade, bonds are expected make a substantial contribution toward PRISM’s annualised return target of 7.75% with relatively low risk, providing the perfect counterbalance to our equity exposures. We expect to continue to increase our bond exposures over the coming months as opportunities arise.
Equity valuations are more nuanced. The US market in particular has held up well this year with the S&P500 only 10% below its all time high, but there is a stark contrast in the distribution of those returns, with technology and in particular AI exposed tech companies driving the majority of the market performance.
On average, the earnings yield of US equities is just 4.75%, only 50bp above treasury yields of 4.25% - hardly, representative of deep value. Nonetheless, when we look past the averages and take out technology companies, we quickly find quality companies at much more reasonable valuations. Europe and particularly UK equities are awash with value. The earnings yield of the UK market is in excess of 9% with dividend yields exceeding 4% making the UK one of the most attractive markets from a relative valuation perspective.
Looking forward, investors are increasingly attracted to high cash yields, with fixed deposit rates close to or exceeding 5%, and asking why bother with volatile and risky markets when they have delivered little over the past couple of years when you can now achieve 5% in the bank? Tempting as this sounds, we believe it’s a classic liquidity trap. Real cash deposit rates, after inflation, are extremely low or negative and are likely to remain so.
A fixed deposit is at best a holding position providing relative protection in a falling market, but with bond yields now back up to attractive levels and the interest rate cycle nearing its peak, we expect the balance of risk to shift firmly to the upside over the next couple of years. Timing your entry is fraught with danger and impossible if you are locked into a fixed deposit.
History has demonstrated that the best strategy is to build up positions in quality assets during times of volatility, like now, and enjoy the ride when the market turns bullish again. We are certainly not out of the woods yet and further set backs are entirely possible if not likely over the coming months; however, we believe this is a good time for investors to top up holdings or begin re-entering markets in advance of the start of the next cycle.
Please do not hesitate to contact us if you have any questions or require further information in relation to this Prism Performance Update; our Business Development team can be contacted by email businessdevelopment@capital-iom.com or by telephone on +44 (0) 1624 654200.
To download this article as a pdf, please click here.
Disclaimer: The views, thoughts and opinions expressed within this article are those of the authors and not those of any company within the Capital International Group (CIG) and as such are neither given nor endorsed by CIG. Information in this article has been prepared for information purposes only and does not constitute an offer or an invitation, by or on behalf of any company within the Capital International Group of companies or any associated company, to buy or sell any product or security or to make a bank deposit. Nor does it form a constituent part of any contract that may be entered into between us. Opinions constitute our judgement as of this date and are subject to change. The information contained herein is believed to be correct, but its accuracy cannot be guaranteed. Any reference to past performance is not necessarily a guide to the future. The price of a security may go down as well as up and its value may be adversely affected by currency fluctuations. The company, its clients and officers may have a position in, or engage in transactions in any of the securities mentioned. PRISM GBP, USD and EUR Strategies were launched in June 2014, April 2018 and September 2018 respectively. Historical performance is calculated by reference to the actual investment performance of Fusion Alpha modelled into the PRISM product structure. Full details of PRISM are contained in the PRISM Brochure, Terms of Business and associated literature which is available upon request.
Regulated investment activities are carried out on behalf of Capital International Group by its licensed member companies. Capital International Limited and Capital Financial Markets Limited are licensed by the Isle of Man Financial Services Authority. Capital International Limited is a member of the London Stock Exchange. CILSA Investments (PTY) Ltd (FSP No. 44894) and CILSA Solutions (PTY) Ltd (FSP No. 6650), t/a Capital International SA are licensed by the Financial Sector Conduct Authority in South Africa. All subsidiary companies across both jurisdictions are represented under the Capital International Group brand.
We are excited to announce the opening of the Isle of Man's Biggest Swap Shop, taking place from the 25th to 28th August at the Strand Street Shopping Centre! This four-day pop-up event aims to revolutionise the way we think about fashion, sustainability, and charity.
In a world where the cost of living is skyrocketing, buying new clothing has become a luxury for many. We believe that everyone deserves to feel confident and happy in what they wear. Our mission is simple: to provide a low-cost and sustainable way for you to refresh your wardrobe while supporting a charitable cause.
Charity of choice
Proceeds from the Swap Shop will go towards supporting The Huruma Orphanage in Tanzania. The Huruma Orphanage was set up in 2012 and looks after children between the ages of 4 and 17. Most have been orphaned following the death of one or both parents, often as a result of aids or other life-threatening illness. The orphanage takes in these children and provides basic education, vocational training and a safe place to live. They also help the children to integrate back into society and to find work when they are old enough to do so. By participating in this unique event, you not only enhance your style but also contribute to the well-being and education of children in need.
How does it work?
The concept behind the Swap Shop is easy and inclusive. You can either bring your pre-loved clothes to exchange with others or simply browse and make a donation. For those who prefer to shop, each clothing rail will display a suggested donation amount, and we kindly ask you to contribute at least the displayed amount to support the orphanage.
If you wish to swap your clothes, bring the items you'd like to donate to the Swap Shop, and we'll reward you with two tokens (equivalent to £2) for each piece, up to a maximum of 14 tokens. These tokens can then be used to acquire new clothes from the shop. For some items, you may only need to add a small contribution to make it yours!
Want to swap or donate?
We welcome various clothing items for women, men and children, jewellery, accessories, shoes, and swimwear in good condition. Please ensure that the items you donate are clean and in a condition that you would wear yourself. Unfortunately, we cannot accept damaged, faded, or bad smelling clothing, and for hygiene reasons, we are unable to accept underwear.
Get an extra token!
To make this event a resounding success, we need your help in spreading the word. If you share your Swap Shop experience on social media using the hashtag #swapshopiom, we'll reward you with an extra token to use in-store. Simply speak to one of our staff members in-store to claim your token.
Please note that we will not be offering refunds and so monetary reimbursements are not possible, as all funds generated from the Swap Shop go directly to supporting The Huruma Orphanage. All surplus clothing remaining after the Swap Shop event will be donated and distributed among various charities across the Isle of Man.
Join us from the 25th to 28th August at the Strand Street Shopping Centre for a shopping experience that benefits both your style and the lives of others. Together, let's make a positive impact on the communities further afield.
Disclaimer: The views, thoughts and opinions expressed within this article / videos are those of the authors / speakers and not those of any company within the Capital International (CIG) and as such are neither given nor endorsed by CIG. Information in this article / video does not constitute investment advice or an offer or an invitation by or on behalf of any company within the Capital International Group of companies to buy or sell any product or security or to make a bank deposit.
Despite being a member of FATF since 2003, South Africa (“SA”) has failed to achieve the required level of compliance with international anti-money laundering standards. The Grey Listing is an international indicator that SA is no longer regarded as a safe investment destination.
8 conditions have been narrowed down by FATF and are yet to be met. Accordingly, laws need to be tightened, mainly regarding money laundering, terrorist financing and corruption. The global watchdog was seemingly unimpressed with the current take on anti-terrorism, but so called “state capture” 1 has been indicated to be the final nail in the coffin. Subsequently FATF has especially requested assistance with extradition.
Although in the past few months leading up to the Grey Listing, SA has managed to pass some legislation regarding the above, the implementation and enforcement herein remains seriously lacking in SA. SA is not off to a convincing start with the Gupta’s extradition from Dubai failing whilst corrupt government officials remain within office.
The longer the Grey Listing status remains attached to SA, the more detrimental for the country’s reputation, currency, and capital borrowing cost.
The Finance Minister, Enoch Godongwana remains optimistic that we can look forward to removal within 2024. Experts are however not convinced. Until then SA can expect additional Due Diligence, transaction delays and higher costs as the new norm.
The Grey Listing factor is seen as the main contributor in the FSCA’s decision to step up on FIC Inspections. Accordingly additional pressure is now placed on accountable institutions to improve their compliance measures and to strengthen their efforts in combatting financial rime. The Regulator expects greater attention being given towards sanctions, domestic and foreign politically exposed persons, prominent influential persons and internal FIC training FIC.
Equally government is expected to step up to the challenge and to work alongside the Financial Services Industry (amongst others) to protect the integrity of SA’s Financial Industry and assist in reducing the global harm caused by financial crime.
In April 2023 SA has introduced the shared state forensic capability within FIC which will see specialised resources in forensic accounting, financial analysis and related services working together to support the work of law enforcement and other competent authorities in their pursuit of high priority criminal matters. Beneficial ownership have also been identified as a new focus along with FIC declaring more entities as accountable institutions.
Ultimately until such a time that more arrests and prosecutions are made, the Grey Listing status in SA will remain.
1.Systemic political corruption in which private interests significantly influence a state's decision-making processes to their own advantage.
What is CIG doing?
Over the past 18 months CIG has been working through the potential impact of SA being placed on the Grey List. This work has focused upon mapping out the potential impact for our clients and our business activities, mitigation strategies and aligning our approach, that may be deployed, where circumstances permit, to reduce the impact upon our client base. Kindly note that management and mitigation of risk factors, whether jurisdictional or otherwise, will be approached on a case-by-case basis.
What if CIG can’t mitigate the Risk?
It remain sour goal to cause as little disruption for our clients and intermediaries as possible. Our appetite towards our SA clients and intermediaries is unchanged and we will endeavor to mitigate the jurisdictional risk associated with SA to the best of our ability. However, risk mitigation cannot be guaranteed in all cases. In those cases where higher risk factors are deemed to be persuasive, we will seek to undertake Enhanced Due Diligence (EDD).
What does EDD entail?
EDD goes further than obtaining basic due diligence, in cases that are deemed to present a higher residual risk, owing to persuasive higher risk factors that cannot be mitigated. EDD may involve:
• Going further to verify customer related information, by obtaining and assessing information from a wider variety of sources.
• Taking additional reasonable measures to establish (and verify, as necessary) source of wealth and source of funds of the customer and beneficial owner.
• Undertaking further research, in order to understand the background of a customer and their business.
• Gaining additional information from the customer regarding the purpose and nature of the business relationship.
Disclaimer: The views, thoughts and opinions expressed within this article are those of the authors and not those of any company within the Capital International Group (CIG) and as such are neither given nor endorsed by CIG. Information in this article does not constitute investment advice or an offer or an invitation by or on behalf of any company within the Capital International Group of companies to buy or sell any product or security or to make a bank deposit.
Welcome to the Quarterly Investment Review for Q2 2023.
Our Investment team have put together a range of resources to update you on what has happened in markets across the second quarter of 2023. Here you will find:
The graph below shows global equity performance across the quarter and plots world events along the performance line to indicate their impact on markets.
Hear from our team of investment specialists as they each explore an investment theme or the performance of an individual asset:
Global equities achieved moderate gains in Sterling terms during the second quarter with US & Japanese equities outperforming and China & Hong Kong underperforming. Year-to-date US equity market returns have been driven by just seven companies, namely Apple, Microsoft, Alphabet (Google), Amazon, Nvidia, Tesla and Meta (Facebook). The prospects for artificial intelligence have been a key driver in the performance of these stocks. Exclude them and US equity market returns have been flat.
Global bonds returned -3.9% as central banks maintained course in their attempts to quash inflation. This was particularly acute in the UK where the Bank of England surprised in June with a larger 0.50% interest rate hike in June. While headline inflation has rolled over, core inflation, which better highlights the impact of wages and the services sector, is proving sticky in the US & Europe while still high and rising in the UK. Sterling bonds have performed poorly as a result and the added pressure on the UK economy has held back the equity market. The silver lining is that Sterling has begun to strengthen and that could assist in bringing down inflation.
The impact of higher rates is yet to ease a tight labour market with US unemployment reaching its joint lowest since 1969 and UK wages on the rise. That could be about to change with signs of weakness in property markets as house prices are now falling across the UK, Europe and the US. As the cost of servicing mortgage debt increases, consumers are forced to tighten their belts and the UK is now expected to tip into a shallow recession, despite the IMF’s upgraded growth forecast in May.
The US regional banking crisis has simmered down with First Republic sold to JP Morgan and the FDIC to impose higher fees on the largest US banks to cover the cost of uninsured depositors. The US debt ceiling was raised and government spending curbed by the Fiscal Responsibility Act of 2023, ending a short period of volatility for short-dated US dollar lending.
China’s economy rebounded with a positive surprise of 4.5% GDP growth in the first quarter, but this was largely driven by domestic consumption and PMIs have since highlighted that Chinese manufacturing has shifted from expansion to contraction. This has cast doubt over the scope of the recovery as the country emerges from its zero-covid policy and the People’s Bank of China has now embarked on another monetary easing cycle in response. Manufacturing also remains a weak spot in Europe with the divergence between service and manufacturing PMIs at its widest in over a decade and Germany has tipped into recession as a result.
There were signs of political instability In Russia, as an important military mercenary group marched towards Moscow to remove the commanders blamed for botching the war in Ukraine. While political instability could ultimately be a route out of the conflict, it also increases the potential for tail risk events.
Capital markets have had to climb a wall of worry this year but with a few key risks behind us we can refocus on the key dynamic: core inflation remains above target in developed economies, central banks are therefore continuing to tighten, thus bonds are underperforming equities. Sentiment has been largely driven by expectations of a pivot from the Federal Reserve, but Jerome Powell has been cautious to signal such an event to avoid creating a bubble as the economy heads towards potential recession.
We have been increasing the amount of fixed income assets in portfolios as they now provide a much more attractive yield, but we are reluctant to give up too much equity which better protects capital through inflationary cycles as has proven to be the case thus far. If the global economy manages a soft landing, the pandemic legacy may be behind us.
Disclaimer: The views, thoughts and opinions expressed within this article / videos are those of the authors / speakers and not those of any company within the Capital International (CIG) and as such are neither given nor endorsed by CIG. Information in this article / video does not constitute investment advice or an offer or an invitation by or on behalf of any company within the Capital International Group of companies to buy or sell any product or security or to make a bank deposit.
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