South African investors can now further diversify investments internationally, following an increase in the personal offshore allowance from R750,000 (£) to R2,000,000 announced in the budget last month by finance minister Trevor Manuel.
“There is no magic formula in terms of the mix of domestic and offshore investment that suits all. Every invester’s needs are different as are their attitudes to risk. It is important to remember that the main aim of diversification should be to manage risk rather than maximise return.
“The rand is strong and many South Africans are sitting on good profits from domestic investment in either local companies or property.
“International markets are performing strongly with many money managers having rediscovered their appetite for equities. While there are risks out there and we may see some correction in equities over the next few months, global growth should continue to generate good investment returns.”
However, Lucas warned investers should ere on the side of caution. Using the UK as an example, he said when FX controls were abolished in the 1960s, soaring oil prices at the time produced a strong sterling which hindered British industry, from an export perspective for some time.
He said strong commodity prices down the line could do the same for the rand and result in even tougher market conditions for South African exporters.
£92bn transferred since 2015
Achievements, charity work and other happy snippets
Since first announcement