Foreword | Issue 74 | 2nd Quarter 2025
DID YOU KNOW? ENDOWMENT EFFECT
In banking jargon, the endowment effect is the profit tailwind that banks enjoy when central banks raise interest rates. At first blush, the concept is counterintuitive. We all understand that high interest rates eventually lead to rising defaults on home loans and credit cards, which is negative for bank profits.
CHINA'S MISUNDERSTOOD ADVANTAGE — INNOVATION THAT THE MARKET STILL DISCOUNTS
Global investors remain fixated on China’s macroeconomic slow-down and geopolitical risk, yet they continue to miss the country’s accelerating innovation curve. In a world starved of growth, we believe that this mispricing presents a once-in-a-lifetime investment opportunity. Portfolio manager JC XUE highlights why China’s tech-led momentum remains one of the least-appreciated sources of future equity returns.
LOW-HANGING FRUIT LIES EVERYWHERE
South Africa has never been short of potential. From our mineral wealth to our human capital, the promise of a prosperous, high-growth future seems almost tangible. Yet, despite the data repeatedly showing how small, targeted reforms could unlock dramatic improvements in growth and living standards, the country remains mired in stagnation. In a recent Foord webinar, the panellists noted that the reason is not the scarcity of ideas, nor the lack of resources — it is the entrenched political calculus that consistently chooses inertia over action.
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BANKING ON SA'S BEST FRANCHISES
South African banks have been rewarding investors since the post-COVID lows — however, the operating environment continues to be tough. Economic growth remains anaemic, interest rates are likely to drift lower, and competition is heating up in payments and SME banking. In this context, analyst BYRON JACKSON-MILLER explains why selective positioning makes more sense than blanket exposure.
PLATINUM SHARES SHINE ON PGM RALLY
The precious metals sector has been the standout performer on the JSE Limited this year. Both constituents of the Precious Metals Index — gold and platinum mining shares — have done equally well. Portfolio manager MIKE TOWNSHEND takes a closer look at what’s driving the rally.
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FAREWELL TO A STALWART — AGNES CAI
After more than a decade at the helm of Foord Singapore’s operations, Chief Executive Agnes Cai departs this month to pursue a new chapter outside of asset management. Her decision leaves us both proud of her immense contribution and wistful at losing a colleague whose calm resolve and encyclopaedic institutional memory have become part of Foord’s DNA. PAUL CLUER bids her adieu.
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MARKETS IN A NUTSHELL
We summarise the market movements for the latest quarter.
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