2022 and 2023 has been many things, however, the biggest shakeup to the SA Asset Management Industry has been changes to Reg 28.

Nick Van Rensburg – All Weather Capital’s macro strategist chats below in his article in the Business Day.

It has been 18 months since Regulation 28 was amended to increase the allowable offshore allocation for Pension Funds from 30% maximum allowable limit to 45%. Whilst the full permutations of such a decision could not be fully understood at the time, the unintended consequences have been dire for the South African economy including the Government itself who increased the limits. The increase has the potential to move over R800 billion in outflows out of the savings industry. We have already seen the impact of the negative change on the local equity market, the lack of appetite on our bond markets and the negative impact on the government’s borrowing costs.

 

Nick delves into this issue which has become one of the most topical discussion points since its enactment last year. He discusses the impact of this legislation on the local markets including the shares which have been hardest hit by the changes. He also discusses the impact on the Bond market and how this has affected the government’s borrowing requirements, the impact on the local investment industry and the lack of infrastructure spend.”

NICK VAN RENSBURG_ Time to rethink the regulation 28 limit