SA property loses its shine as investors take profits

0:00Welcome to MoneyWeb now. Business news every morning. It's just gone 6.30 on the seventh day of September 2026. Hello and welcome to the MoneyWeb now podcast with Simon Brown. I'm Dutus Le Ramele in for Mr Brown this morning. Here's what you can look forward to on the show today. But for you manage at Sunland Private Walton, it couldn't speak on the economic week ahead. Vernon Sinden is head of logistics at Investing Business and Commercial Banking. He looks at the reopening of the Suez Canal. August was not such a good month for South African reads but for your manager and investment analyst at Merchant West Richard Henwood helps us understand why. This podcast is brought to you by Standlip Asset Management. Invest in more global opportunities through their partnership with JP Morgan Asset Management. MoneyWeb now on the money. Also available

1:02on podcast. Morning headlines, MoneyWeb leading with the Fishing Group and a fire over exec, pay and lead director. And on business day, Icarza goes after big telcos, Netflix and WhatsApp overpricing. Morning markets, US markets closed for Labor Day today. S&P 500 down 410s of 1% nest egg in the negative 310s of 1%. East is mostly mixed in a K up 1.7% tangs down 1%. Commodities go down 510s of 1% at $4405. Brent crude up 1.5% now trading at $97 a barrel. Platinum down 910s of 1% at 1,811. Palladium up 410s of a% at 1,405. The Rand is trading at $15. Rand at $98 to the dollar. Bitcoin $79,959. Top 40 opening call expected in the negative 31 points. I speak to Nick Kunzer of Sunlam Private Wealth on the

2:03very chilly Monday morning. Thank you very much Nick for your time. So in spite of major oil shocks due to the ongoing conflict between the US, Israel and Iran, the world economy performed better than expected in the first quarter of 2026. Here at home, the economy grew marginally by 0.5% at the same quarter and this week the country's statistical agency will release second quarter GDP figures. And that's a say published several notable outputs in August that give us a glimpse if you will of what to expect. Let's start with manufacturing. Looking at that performance, what do you perceive will come out this week? John, I'm honoured you. Thank you for having me on. Yeah, it's going to be that is obviously the highlight of what is quite a data heavy week but that's that's a number manufacturing, the GDP. Unfortunately, don't get too excited. It looks like it's going to be flat to even slightly down. It's hope it's not a contraction but the cypherkin market is facing some heavy sort of headwinds at the moment. Let's hope it's not a contraction. How much of what is happening in the Middle East will weigh down on our performance as a country at least? Do we have an idea?

3:09Well, I think a majority of it is what's coming out from the Middle East. I mean, the bigger picture is the straights of her must-been blocked. We get a quite portion of our crude from the Middle East as well as other things that we do important in the lives of self-reception, a bit of fertiliser as well. All that feeds into Syrupka's food basket as I said, we do tend to import a lot of our inflation. Unfortunately, we are put that all together. You put that in with what has been a not a great sort of slightly weaker and overall despite being under 16, it does hit Syrupka directly on that fuel price. We are a fuel importer, no transport input cost economy into real household and business confidence gets knocked as well. All of that, you can expect a flat GDP this time. Sure. Inflation sitting at 4.3% this time last year, we were at 3.4%. Just talk to the consumer in South Africa and what we are contending with. You

4:10mentioned the oil prices, the elevated oil prices, the rent, not so strong. What does this mean for consumer spend? I consume on the back foot, right? Ideally, the bigger picture is unfortunately for the consumer. This is a textbook supply side sort of pushback shop. This is not demand driven inflation. The consumer is under pressure. A large portion of Syrupka's GDP does come from a bit of sum as well. They are going to be on the back foot here. As you said, inflation, if most estimates put it to the mid 4%, it's probably a little bit higher if you really drill down into those numbers. You've got a staff consumer whose real wage inflation has not grown. You put that all together. You get a consumer on the back foot and unfortunately spending slides and you get a really flat growth, which we're going to see probably play out in those numbers. Unfortunately, you take a look at other world economies and they were boosted also by artificial

5:12intelligence, which is something that we're not contending with here in South Saharan Africa, at least because in terms of AI data centers and the build out, et cetera, we're not there as yet. You mentioned that it's going to be a data heavy week. This week, what are you looking forward to, especially when it comes to company results? Well, company results, it's a couple of retailers offshore, which to keep an eye on. Obviously, the Americans are shut today. You pointed out your intro at Labor Days is a four-day week. We do tend to pick things up a little bit in September ironically. Traditionally, it is fun enough. It is actually quite historically a good month for markets. Not that much to think I teeth into you just finished that second-quartered US earnings season, but looking forward to normal hemisphere coming back to work, volume should pick up a little bit and we should get a little fewer half a second half of the year is going to play out. Thank you so much Nick for your time this morning. Nick Kunzer is for your manager at Sunlun Private Walth. The standard flexible income fund delivers capital preservation and consistent top

6:17quarter inflation beating returns. Let your money keep working with standard asset management even after your retire. Money web now on the money. Security risks in the Red Sea led to a risk of appetite on the part of a number of businesses, however, the reopening of one of the most critical trade routes that the canal is sending positive signals through, though cautiously rather, Asia-Europe container traffic sailed via the cape of a good hope, now with the reopening of the sewers we look at what this could mean for South Africa and its businesses. Vernon Sinden is head of logistics at Inverstic Business and Commercial Banking. Thank you very much Vernon for your time this morning. So why is the reopening of this canal unlikely to deliver immediate cost savings? Firstly, good morning to you, your listeners. Thanks for letting me talk a little bit about what's happening in the market. So I think the reopening is a misperception. The reopening of the mousse is not a full reopening. Only a few shipping lands are starting to

7:24relook at opening there. For example, CMA is starting to trade through. We know that Merck is going through now. MSEs are starting to go through. So it's not a full reopening and we won't see in the short term at least that the shipping land will stop going around on the cape of good hope at least for now. However, it's mostly from Asia to Europe and Vasa versa and very much commodity driven. So we're looking at oil and gas, we're looking at retail and a couple other commodities. So I think that's what's really driving it. Obviously the economy. And from from a South African perspective, we have to look at how it's really going to influence us in the short term. If you're looking at the rate levels at least, it's not going to affect the rate levels in the short term. And I mean, if you had to compare, I mean, last year versus this year, there is a significant difference. Talk us about that difference and that gap, just how big is the difference? Yeah, sure. I mean, if you had to compare, like last year from a 40 foot from Shanghai to Derben, it was between 4583 on average. Now we're talking just under $4,000 on average.

8:29And that's a 20k difference in rent value. So this year at least, the rates have dropped a little bit. But again, every year we expect it, you know, when it comes to peak season, we're looking at supply and demand out of the far east coming into South Africa for various reasons. So you mentioned that it's partially open. This waterway is partially open. So traffic will be diverted via the Cape of a good hope. That's what we are understanding from this still, though not as much in terms of volume, but there will be some traffic. So there's still opportunities for South Africa. Yeah. So from the African perspective, how does it influence us? It indirectly influences us because, you know, there's a shortage of equipment. And when I say a shortage of equipment, that's specifically, you know, like containers, like 40 foot and 20 foot containers. And that's how it influences us. And then, you know, sailing schedules from the shipping lines. So the faster that,

9:29that, you know, the shipping lines route by the straight to the moose, that means that there should be a lot more schedule reliability and a lot more stability in the market in terms of, you know, how what's the guarantee of us getting our cargo on time? Because at the moment, there is a lot of, you know, issues in the market in terms of rerouting. And if the shipping lines decide to go via the straight to the moose again, are there's going to influence us as that, you know, that it will be less delays, of course, from our major trade lanes, from the far east into South Africa. What should importers be planning for? As the global volatility continues to evolve, because we're hearing that the strikes between the US and Iran, they haven't stopped. In fact, they've picked up and are being elevated. Yes, I think what's, you know, the message is quite clear for South African importers and what they should, you know, the recommendation is at least, you know, is really to bolt buffers into your lead times, at least from, you know, from various trades and also depends on where you're importing from. And then use more than one shipping line

10:31or carrier or routing option, which is quite, you know, for critical cargo. And then, you know, this review, your insurance or war risk as well. And then, you know, Tranship and Port, to really look at your sailing schedules and where it's Transhiping from. And then I check which carriers, you know, that have unexpected surcharges, I think is quite important because, you know, the surcharges are coming up and it depending on the ink of term, you know, and then the model of the trade lane. Have you looked at a scenario where we see a gradual shift away from the Cape of Good Hope and what could this mean for South Africa? Yes, of course. I mean, if we had to predict that had to happen, you know, tomorrow as an example, you know, that would be a bit of a, you know, there's no perception, but the South African will receive a major economic winfall from, you know, vessel sailing around, you know, the Cape of Good Hope. And the reality is more nuanced, you know, a ship passing like around South Africa, you know, we missed the boat, no pun intended because what we see is that,

11:31you know, these vessels could have refueled, could have, you know, for repairs. So from that perspective, however, if that had to stop completely, again, it's just around the sailing schedules, the schedule reliability, we will see a massive improvement there in turn of capacity in the market, I believe. And then, you know, it just equipment availability as well with 20 foot and 40 foot containers being available, and there will be more certainty in terms of our lead times. I wonder if you've looked at other countries, right, along the spout, if you will, the southern tip of Africa that have actually prepared to catch the sails instead of letting the boats go, if you will, as a result of the factors that you speak of, right, just some of the issues that are not put together or logistically that we have not actually sorted out. And so which countries are seeing a boost from this traffic? It's very difficult to say. I mean, I don't want to give a specific country because it's very fluid.

12:31I mean, there's disruption. One thing is for certain is that with supply chain and logistics, every year there will be some sort of disruption. If it's going to be weather, if it's going to be, you know, shortage of fuel, if it's going to be, you know, a war risk. So it all depends on the trade lane and the route of where it's coming from, which the country can potentially benefit from these type of disruptions. But I don't believe any country would benefit from it directly. The only people that benefit really, to be honest, is the shipping lines because of the cost of shipping. And obviously, we have seen significant increases in shipping costs because of all these these disruptions. Fair enough. Speaking of weather, El Nino, and said to be a Godzilla El Nino, I know this because my mom keeps on reiterating that facts, stocking up and making sure that she's prepared for Doomsday. What are the preparations for that, if you will, and what are the projections in terms of the impact that this might have on supply chains? Yeah, I mean,

13:34it's too soon to tell. Okay. And I mean, it's really too soon to tell. But I mean, what we can do, it's what the biggest storyteller here for us is, you know, is history, what we've learned in the past before. When we're talking about floods in certain regions, when we're talking about really bad weather in certain ports, for example, like Cape Town and Derbond, where we've experienced the floods before. So I think it's not far into us where we experience really bad or unpredictable weather. It's just how do we plan around that? What can we do? You know, so the thing is, there's a lot of optionalities in terms of moving cargo. Of course, if you see freighting cargo into South Africa, I mean, you know, that's one thing. But what we have seen a major shift in is that from a lot of clients are moving ocean freight to air freight. So because of unpredictability in the market and weather conditions and so on, so they're ordering just in time. So I think that's what we might potentially see more of. So if there is any major weather disruptions on the water in,

14:34you know, nearby main ports, we'll see that importers will convert their shipping mostly to air freight to for just in time. Fair enough. Thank you very much for your time. The morning Vernon Sendin is head of logistics at Investek Business and Commercial Banking. Give your money the return at once without taking a flight with the Standleb Global Select Fund, an offshore equity fund, sub-managed by JP Morgan Asset Management. Money Web Now on the Money. So the African real estate investment trusts fell 5% reads under performed on both bonds under performed both bonds and equities rather. In July, South African reads let the field, the sector forward yields rose from 6.73% to 7.9% rolling 12 month distribution growth held at 10.58% more than 6% points ahead of inflation. These South African long bond ended August

15:36unchanged at 8.76% against 8.75% a month earlier. Richard Hennward is before your manager and investment analyst at Merchant West, he joins us for more. Thank you very much Richard for your time this morning. What does the latest SA Reutassociation Chart book tell us about what led to the pullback in gains? Yes, the money did and could not guarantee your listeners. Yes, August was actually very much a world month for SA equity investors with the oil sheet up 4.6%. If you look at it under the hood, there was a wild sector rotation into essentially gold and platinum stocks last month and unfortunately that caused the negative vacuum it almost appears because SA financials were down 1.6% SA industrials were down 5.6% and SA reads like you say we're down 5%. Like you said, SA bonds didn't really move for the month so the tenure was around 8.74%. I think just you know produce step back and look over the last two months at the end of June it was

16:38at 8.4%. So there has been a 30 basis points increase in that bond yield over two months. So I think there was also a little bit of a catch up in the realization from sort of investors that bond yields in South Africa as well as obviously developed markets are moving higher. And then there was a third factor of play trade volumes for the SA Reits during the month were quite a bit below average for the year and then thinly trade markets we do sort of expect price exaggeration. So there was downward pressure on the Reits and that might have been exaggerated by trade volumes obviously being fairly thin for the month. You mentioned trading volumes being low and despite the fall and share prices corporate activity remained elevated though. Yes that was correct there was some more sort of M&A deals announced during the month. Depula being the biggest sort of an announcer of the largest deal. Depula being an SA Reit with a more retail focus and your lower LSM value rural sort of

17:41retail sector. They announced a fairly big deal sort of adding another sort of non shopping centers to their portfolio and buying them from the Moulman group which is a privately run property company in South Africa. The large deal because it was just over two billion rands worth of properties luckily they managed to get that price on at about 9.3%. So relatively attractive pricing for Depula and they were also able to raise another 1.1 billion in equity to support obviously financing of that deal. So the fundamentals the operations the the corporate news out of the sector was still neutral to positive during the month or though the prices did fall 5%. So rolling 12 month distribution growth held at 10.58% as we said in the intro more than 6% percentage points ahead of inflation. What does the gap between the two tell us? Well look at the moment the SA reads are in a little bit of a sweet spot because they've had they've been focused on operations the last

18:42two to three years. The vacancies are low or decreasing and rental reversions on a net basis are fairly positive. They are positive and industrial. They are positive in retail. They are still negative in office but as a whole they are slightly positive. So they've got positive operations leading to growing net property income and then the second factor for them at the moment which remains positive is they've got positive financial leverage. So they are still benefiting from the lower interest rates that the SA move does into you know from 2024 going below 6 sorry going below 7% on the repo rate. So they've got two positive factors at play leading to high single digit double digit earnings growth still at the moment and that momentum remains intact for now. Richard Hanward thank you very much for your time this morning before your manager and investment analyst at Merchant West. And that's it from myself and the team for this morning thank you very

19:45much for joining us. This podcast is brought to you by Stanlib Acid Management investing more certainty to navigate volatile market conditions. We're live every weekday morning on the Money Web website and app at 6.30am and podcast a little after 7am. I big thank you to the team Spucyso Noble Leon Nicole and Peño and to you for listening and our guests for their time my name is to dozele Ramila in four Simon Brown this is Money Web now we'll be back with you again tomorrow have yourselves a magic day further. Listen to the live stream of Money Web now the same time every weekday. For more business finance and investment news Money Web now on the money also available on podcast.