{"id":26657,"date":"2026-03-05T14:57:18","date_gmt":"2026-03-05T14:57:18","guid":{"rendered":"https:\/\/microvibenews.com\/?p=26657"},"modified":"2026-03-05T14:57:18","modified_gmt":"2026-03-05T14:57:18","slug":"been-using-rand-strength-to-take-money-offshore","status":"publish","type":"post","link":"https:\/\/microvibenews.com\/?p=26657","title":{"rendered":"Been using rand strength to take money offshore?"},"content":{"rendered":"<p><\/p>\n<div>\n<p><iframe loading=\"lazy\" src=\"https:\/\/iframe.iono.fm\/e\/1652564?layout=modern\" width=\"100%\" height=\"170\" frameborder=\"0\" data-mce-fragment=\"1\"><\/iframe><\/p>\n<p>You can also listen to this podcast on iono.fm here.<\/p>\n<p><strong>SIMON BROWN:<\/strong> I\u2019m chatting with Philip Short, global fund manager at Flagship Asset Management. Philip, appreciate the time. A bit of a rarity that we\u2019ve seen over the last year and a bit perhaps, a stronger rand. I was thinking back over the last couple of decades \u2013 it really has happened a few times, but it\u2019s not something that I think most South African investors are used to seeing.<\/p>\n<p><strong>PHILIP SHORT:<\/strong> Hi, Simon. Yes, I think it has actually been more than a year and a half. I was looking at the chart this morning, and it was in about May 2023 that we were sitting at R19.82\/dollar. So it has been about three years of rand strength. And it has mainly been on the back of high mineral prices or resource prices. We export a lot of that, about R500\u00a0billion worth of resources. That means a lot of people then buy rands, buy the commodities \u2013 and that then strengthens their rand.<\/p>\n<p><strong>SIMON BROWN:<\/strong> Absolutely. And we\u2019ve seen, before, big strengths in the currency. I remember the one in the early 2000s. It was commodity based.<\/p>\n<p>You are global fund managers. What do you do in your team at flagship? How do you think around managing this currency trend? If you are an offshore investor it\u2019s going to take some shine off that return.<\/p>\n<p><strong>PHILIP SHORT:<\/strong> Yes, it does. We do not try to forecast the currency. We do however accept that the rand structurally and over the longer term will depreciate against the dollar. And that\u2019s just a fact of flows of money and the differential in inflation rates, and that structurally long term we\u2019re comfortable having money offshore. What we would say to people is in the current state, where we do have the rand strengthening, especially after a three-year period, it is cheaper to allocate your money offshore.<\/p>\n<p><strong>SIMON BROWN:<\/strong> I get your point on that, because that\u2019s what I was thinking. We love a stronger rand. It makes us feel better. It\u2019s like when the Springboks beat the All Blacks and it just fills us with joy. But it\u2019s always going to be a short-term situation. Structurally it\u2019s going to go weaker. It\u2019s the old clich\u00e9 \u2013 right now we get more units in a sense, and we may be using this opportunity to externalise.<\/p>\n<p><strong>PHILIP SHORT:<\/strong> Yes. And if you try to think about it as scientifically as possible \u2013 which is quite difficult \u2013 we\u2019ve been in a sweet spot of exporting all our resources, and all those commodity prices for the different types of commodities have been increasing, and then coincidentally the one that we do import \u2013 which is oil and refined petroleum \u2013 that has actually been decreasing. We\u2019re buying cheap and we\u2019re exporting high, so that\u2019s been a sweet spot.<\/p>\n<p>Read: South Africa stocks in sweet spot as gold, rand gain, BofA says<\/p>\n<p>But now we\u2019ve seen oil. Looking at Brent, for example, Brent oil was at about $60\/barrel a few weeks ago and we now sitting at $72\/barrel. So if we continue to see oil go up, that could present the case for the rand not strengthening any further at the very least.<\/p>\n<p>Read: Godongwana sounds alarm over oil spike<\/p>\n<p><strong>SIMON BROWN:<\/strong> Actually I hadn\u2019t thought of that. Of course, oil is in some ways our big risk and we\u2019ve benefitted from a significant strengthening. But again, that\u2019s not always going to be one-way traffic either. I was actually chatting with someone recently \u2013 and it\u2019s more or less what I do \u2013 they just do, I think, quarterly externalising of some currency offshore. They\u2019re basically doing rand cost averaging. In this case it\u2019s USD cost averaging. Their argument is: \u2018We don\u2019t mind what the rand is; we want to get some offshore exposure.\u2019 And that\u2019s a strong way to think about it as well.<\/p>\n<p><strong>PHILIP SHORT:<\/strong> Yes. I think that\u2019s probably a good way of thinking about it, given the fact that you can\u2019t predict it. So you sort of average your cost in.<\/p>\n<p>And then from our point of view the way we see ourselves being global investment managers is not just the structural decline of the rand over time, given that inflation differential, but also the fact that there are much greater opportunities in number and in quality overseas.<\/p>\n<p>In South Africa you have about 60 to 70 stocks that are investable \u2013 that you can invest in \u2013 and globally you have over 10\u00a0000. And then you also have couple of sectors like semiconductors and good biotech companies, for example, which you just don\u2019t get on the JSE.<\/p>\n<p>So those are the two starting points we think of when we invest \u2013 the opportunity set is bigger, and the rand will get weaker over time.<\/p>\n<p><strong>SIMON BROWN:<\/strong> That\u2019s a great point. There is just so much more. And it\u2019s not just that there\u2019s more scope. As you said, there are sectors that we simply do not have any exposure for on our JSE.<\/p>\n<p>In short, it comes back, I suppose, to the two sort of core tenets of investing. Don\u2019t panic \u2013 that never works \u2013 and kind of have a plan and stick to it almost regardless, because in the short term things are going to happen and in the long term those trends are structural.<\/p>\n<p><strong>PHILIP SHORT:<\/strong> 100% I think you hit the nail on the head there. Just don\u2019t panic. You can\u2019t. Not everything is foreseeable. So expect the unexpected and don\u2019t panic.<\/p>\n<p><strong>SIMON BROWN:<\/strong> Yes. Panic has never worked.<\/p>\n<p>We\u2019ll leave it there. Philip Short, global fund manager at Flagship Asset Management, always appreciate the time.<\/p>\n<p>Listen to the full MoneywebNOW podcast every weekday morning <span draggable=\"true\">here<\/span>.<\/p>\n<\/p><\/div>\n<p><script data-cfasync=\"false\">\n            !function(f,b,e,v,n,t,s)\n            {if(f.fbq)return;n=f.fbq=function(){n.callMethod?\n                n.callMethod.apply(n,arguments):n.queue.push(arguments)};\n                if(!f._fbq)f._fbq=n;n.push=n;n.loaded=!0;n.version='2.0';\n                n.queue=[];t=b.createElement(e);t.async=!0;\n                t.src=v;s=b.getElementsByTagName(e)[0];\n                s.parentNode.insertBefore(t,s)}(window, document,'script',\n                'https:\/\/connect.facebook.net\/en_US\/fbevents.js');\n            fbq('init', '779812924991616');\n            fbq('track', 'PageView');\n        <\/script>#rand #strength #money #offshore<\/p>\n","protected":false},"excerpt":{"rendered":"<p>You can also listen to this po&hellip; <\/p>\n","protected":false},"author":1,"featured_media":26658,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[4],"tags":[27,5992,1007,1406],"_links":{"self":[{"href":"https:\/\/microvibenews.com\/index.php?rest_route=\/wp\/v2\/posts\/26657"}],"collection":[{"href":"https:\/\/microvibenews.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/microvibenews.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/microvibenews.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/microvibenews.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=26657"}],"version-history":[{"count":0,"href":"https:\/\/microvibenews.com\/index.php?rest_route=\/wp\/v2\/posts\/26657\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/microvibenews.com\/index.php?rest_route=\/wp\/v2\/media\/26658"}],"wp:attachment":[{"href":"https:\/\/microvibenews.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=26657"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/microvibenews.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=26657"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/microvibenews.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=26657"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}