Welcome to Through our Lens Edition 2

A message from Gielie

In the second edition of Through our Lens, our bi-monthly update, we share where our focus and attention is at Sanlam Investments in mid-2023.

Arthur Kamp, our Chief Economist, discusses his current view on the economy, arguing that the more things change, the more they stay the same. The South African economy is closely aligned to the commodities price cycle, and when commodity prices fall, it triggers a series of events. SA’s terms of trade are negatively affected; the current account deficit rises; the need for foreign direct investments to fund infrastructure projects and grow the economy increases; the rand weakens; and businesses and households experience greater financial pressure. The outcome for SA could be very different, but strong leaders are needed to implement a new trajectory.

The global take-up of Artificial Intelligence (AI) is increasing dramatically. Opinions differ on AI’s usefulness, breadth of applications and impact on the workforce of the future. The investment landscape could also be influenced and even altered by deploying AI. Nico Katzke, Head of Portfolio Solutions at Satrix*, concludes that Open AI contributes to investment knowledge and education. Whatever your current opinion, AI is a trend worth watching.

Blended finance models enable both the public and private sectors, inside and beyond SA, to take on projects that can make a positive impact. In this edition, two articles provide insights into some of the blended finance partnerships in which Sanlam Investments is involved. We believe that we can make a difference by getting involved in addressing SA’s socio-economic needs. The first article explains how we support SME growth and the contribution it can make to economic recovery. The second article covers the launch of a new and exciting initiative: the SA-H2 fund.

Many SA-based investors still show little interest in incorporating ESG principles into their investment processes, in the belief that ESG is a developed market trend, inappropriate for SA. Our next article presents the argument for ESG.

Manka Sebastian, Portfolio Manager at Sanlam Properties, provides insights into how countries can benefit from a “people-first” approach by focusing on the S in ESG. This is measured by the Productive Capacities Index (PCI), which was introduced by the UN Conference on Trade and Development (UNCTAD).  Rwanda, Mauritius and Botswana have shown how countries can create positive change by focusing on their people, and this may have lessons for SA.

How would ESG principles be incorporated into a Fixed Income perspective? Teboho Makhabane, Head of ESG and Impact at Sanlam Investments, interviewed Mokgatla Madisha, Head of Fixed Income at Sanlam Investments, on how ESG can be incorporated into Fixed Income portfolios.

Thank you for making the time to read this edition. I hope that it has been interesting and thought-provoking.

*Satrix is a division of Sanlam Investment Management

Kind regards

Gielie de Swardt

Head: Retail Distribution

Through our Lens