This week has been filled with the inspiring insight of world leaders and forward thinkers in Davos, along with the uninspiring continued drudge of the US government shutdown (now on Day 35) and the Brexit negotiations.
Please follow this link to Fundsmith’s 2018 Annual Letter to the Shareholders of the Fundsmith Equity Fund, which we are now including in our offshore equity portfolio construction. Their attitude towards selecting quality global businesses and indeed their views on market timing resonate very strongly with our investment philosophy. If you have the time, it’s definitely worth a read.
- Two Bills, one Democrat and one Republican, aimed at ending the Government shutdown in the US, were brought to Senate yesterday, both were rejected. The Democrat Bill aimed at reopening the government while the Republican Bill was to finance President Donald Trump’s wall.
- Trump announced on Wednesday evening that he would wait until the end of the Government shutdown in order to deliver his State of the Union Address.
- At Davos, corporate executives joined the International Monetary Fund in warning that the global economy is slowing down, faster than expected. This came as China announced that its last quarter was its slowest expansion since 2009. They are still growing at 6.4%.
- In executing its second downgrade in three months, the IMF predicted global growth of 3.5% this year, beneath the 3.7% expected in October and the rate in 2018. Among major economies, the deepest revision was for Germany, which the IMF now sees expanding 1.3% this year, down 0.6% from October.
- Airbus Chief Executive Officer, Tom Enders announced that if there is a no-deal Brexit, Airbus will have to consider moving out of the UK. He said, “Please don’t listen to the Brexiteers’ madness which asserts that, because we have huge plants here, we will not move and we will always be here. They are wrong.”
- Since the protests in Zimbabwe broke out last week, at least 18 people have died after being shot by law enforcement. This has put an international dampener on Emmerson Mnangagwa’s reputation as Zimbabwe’s President.
- President Ramaphosa signed a Political Party Funding Bill into law this week. The Bill requires political parties to disclose donations of R100 000.00 or more. Additionally, the Bill prohibits state institutions from making donations. This is expected to improve political party funding transparency.
- The NPA announced a provisional withdrawal of the corruption charges against Duduzane Zuma. The reason given for the withdrawal was that the corruption charges in questions still need to be discussed at the Zondo Commission.
- President Ramaphosa was on a charm offensive in Davos, often going off script to talk about South Africa’s potential. Follow this link and this link for more on what he accomplished at Davos this year.
- Follow this link for an interview with Stephen Koseff, the CEO of Investec, where he discusses his views on Brexit, how much President Zuma cost the South African economy, and about our economic recovery.
Source: Dynasty, Stanlib, Prescient, Daily Maverick, Moneyweb, Reuters, RMB, Aljazeera, and Bloomberg Markets, etc