Dear readers,

In penning this letter to you I am conscious of how dynamic and fluid the ever-changing global and local market is currently and how things could change by the time you read it. Nonetheless, there is merit in standing back and assessing what we are experiencing and placing this in broader context.

My baptism of fire as a young stockbroker was Black Monday in 1987. This was followed as the owner of an asset management company by the dot.com bubble some 10 years later, the 9/11 attacks in 2001, followed by the global financial crisis in 2008 and, of course, Covid 19 in 2020.

The one enduring lesson I have learnt over these periods is that markets always recover, and sharp market declines are temporary and produce healthier valuations and buying opportunities. To be sure, it’s painful to see value and share prices eroded, but as Rudyard Kipling noted, “If you can keep your head when all about you, are losing theirs” …  And this is exactly what we do at Warwick during periods of uncertainty and market volatility, we keep our head, apply our collective experience, ensure your wealth is appropriately structured and communicate regularly with you throughout.

We are currently dealing with two issues of ‘man-made’ uncertainty. The direction and impact of President Trump’s seemingly capricious tariff policies, combined with ongoing disagreement over the South African budget and the future of the Government of National Unity. Both are soluble and, of course, will be resolved sooner rather than later.

The 2025 Trump administration tariffs have had a major negative impact on global financial markets. Initial announcements of tariff increases often lead to stock market fluctuations. Companies heavily reliant on international supply chains may also see declines in stock prices. The U.S. dollar may weaken depending on market perceptions of the tariff impacts on trade balances and economic growth. The longer-term consequences may result in increased input costs from tariffs, with higher consumer prices, and contributing to inflation. Supply chain disruptions may see companies seeking to relocate supply chains or sources of materials, leading to longer-term shifts in global trade patterns. Of course, other countries, particularly China and the EU, will respond with their tariffs, escalating into trade wars that can stymie global economic growth.

Countries that rely on exports to the U.S. may experience economic slowdowns affecting their currencies and stock markets and South Africa is no exception. However, with Trump’s announcement of a 90-day moratorium on the imposition of global tariffs, (excluding China), we are seeing the first tentative green shoots of market recovery.

Closer to home, the political realities of the 2024 election mean that coalition politics is here to stay and whether the current GNU configuration holds (and as business we hope it does), political parties are going to have to work together to deliver a budget for the country as whole.

Until next month, stay the course and markets will recover!

Sincerely,

Ian Kilbride

Chairman and Chief Executive Officer