2. Movers and Shakers in the South African Economy Presented by: Dawie Roodt 17 July 2006

3. Movers

4. Real Economy

5. GDP

7. Results  Job creation  Increased prosperity

8. Fiscal Policy

9. State Finances

12. Results  Lower interest payments  More social expenditure  Better ratings  Strong demand

13. Shakers

14. Monetary Policy

15. Interest rates

17. Inflation

19. Exchange rates Rand

20. Rand Valuation Gold $800 Rubicon Stock exchange crash ANC, Reds fall Election Exchange controls Asian crises Wakefordgate Rus, Zim, Arg Fin Rand NOFP + NOFP -

21. Financial

22. Disposable income of households Source: SARB

23. Household debt to disposable income Source: SARB

24. Savings to disposable income of households Source: SARB

25. Debt Servicing Cost

26. Commodity Prices

28. Balance of Payments

31. Results  Interest rates climbing  Inflation jumps slightly  Large current account deficit  Commodity prices – effect on businesses and inflation outlook  Currency exposed to global volatility  Alarming increase in PSCE  Stellar household debt/disposable income  Lack of ‘savings culture’ by households

32. Asset Allocation Reason Equities Demand/Rand/International BondsInflation/Supply CashShort Interest rates PropertyProperty Cycle – Heavy Overweight – Overweight – Neutral – Underweight – Heavy Underweight

33. Local Equities, 2006 Economic Sector MCEAAJSE Sector Mining and Quarrying3234%Mining, Platinum, Gold, Coal Finance, prop and bus. serv 3024% Banks, Insurance, Life Ass, Media & Pht, IT, Property, Support Serv Manufacturing 1214% Auto, Basic Ind, Beverages, Chem, Elect, IT Hard, Pharm & Bio, Steel & Other Personal Service 65% Cyc Serv, Health, Leisure Ent, Non-cyc Serv, Person Care Transport, storage and comm. 67% Telecomm, Transport Trade, hotels and restaurants 64% Cyc Cons, Food & Drug, Gen Retail, House Goods, Non-cyc Cons Electricity, gas and water 43% Oil & Gas Agri, Forestry and Fishing 31% Food Prod Construction 28% Const & Build 100100%

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