Budget 2016 and your investments

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 weakened further.
• 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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