South Africa’s Digital Nomad Visa
Effective May 2024, South Africa’s new digital nomad visa allows remote workers to work for a foreign employer and derive income from foreign sources. To qualify, the foreigner must earn a minimum gross income of R1 million annually. Experts warn that complex tax implications could hinder its economic benefits. Visits of up to six months within a 36-month period require tax exemption from the South African Revenue Services (Sars), while longer stays will require tax registration, which may deter extended visits. Critics argue the visa overlooks crucial tax and legal frameworks, risking the creation of a permanent establishment for foreign employers and complicating tax obligations. Further reforms are needed to ensure the visa delivers the anticipated economic boost.
The final vote count shows democracy in action
South Africa’s 2024 election results demonstrate the power of democracy, with the ANC’s support plummeting from 58% in 2019 to 40% in 2024, leading to significant coalition negotiations. Over 3.6 million former ANC voters changed votes to support the new uMkhonto weSizwe Party (MK), securing 14.6% of the vote. The ANC now holds 159 seats, with the Democratic Alliance (DA) and MK holding 87 and 58 seats, respectively. Provincial losses in Gauteng, KwaZulu-Natal, and the Northern Cape further illustrate the ANC’s decline. The election also saw high absenteeism and many spoiled votes, reflecting widespread voter discontent and the necessity for collaborative governance.
CEO faces duty of dismantling Anglo-American after rejecting $49 billion bid
Anglo-American CEO Duncan Wanblad faces the weighty task of restructuring the 107-year-old company after declining a $49 billion takeover bid from BHP Group. Investor confidence remains steady, as reflected in Anglo’s share prices, which are above pre-bid levels. Wanblad’s strategic plan includes exiting the platinum and coal sectors and potentially divesting or spinning off De Beers. This ambitious restructuring involves addressing a partially completed fertiliser project in England and preparing for potential future bids from competitors such as BHP. Investors are cautiously optimistic; however, they remain alert to the execution risks of this extensive transformation.
Market moves
Oil prices fluctuated as OPEC+ revealed plans to increase production starting in October, with Brent crude dropping to $80.74 a barrel, and West Texas Intermediate falling to $76.67. The decision, unexpected by many, aimed to balance support for prices while addressing member concerns. Analysts like Goldman Sachs viewed the move as bearish due to rising inventories, while UBS and RBC expressed confidence in OPEC+’s management. Geopolitical tensions, such as Israel’s opposition to a United States cease-fire plan, continue to impact oil markets.
The Week Ahead
Today, South Africa will release its gross domestic product (GDP) data, while the United States will report on Vehicle Sales. Wednesday brings the Eurozone’s Producer Price Index (PPI) data and the United States’ Crude Oil inventories and imports. Thursday features key releases including the Eurozone’s employment change figures, South Africa’s current account data, the European Central Bank (ECB) interest rate decision for the Eurozone, and the United States’ trade balance. Finally, on Friday, important events include India’s interest rate decision, South Africa’s foreign reserve data, and China’s trade balance report.
Market Performance as at 31 May 2024
Source: FundFocus. Data as at 31 May 2024. Past performance is not a reliable guide to future performance. For illustrative purposes only and not indicative of any investment.
