On Thursday, the 24th of February 2022, Russia invaded Ukraine. This insane act of political ideology has been met with almost universal world condemnation and we are once again astonished by the fact that somebody like Putin can be the leader of a powerful nation like Russia. There is no doubt that the majority of Russians are not in favour of this war but voicing any dissenting personal opinion in Russia will get a person arrested so this brutal dictator does as he pleases.
It is no surprise that this invasion is having a detrimental impact on your investments, but at a time like this we have to rather focus on the destruction of lives, families and livelihoods in the Ukraine. Ironically, the impact on investments when such an invasion occurs is often positive for investment returns (see accompanying graph), but of course the impact on people subjected to enemy brutality is permanent.
In the dark week that was, there was a flicker of light on Wednesday when our Minister of Finance delivered a budget speech that was positive. We saw no increase in, for example, the fuel levy, and he even promised a deduction in personal income tax. It seems like our debt-to-GDP will also be lower than anticipated and that SOEs will have to prove that they deserve financial assistance from government before they can receive any such assistance. We even saw an increase in the amount of money pension funds may invest offshore.
So, for now, we can only watch from the sidelines as events unfold internationally and hope and pray that there will be a return to some semblance of normality. Especially for the sake of the people of Ukraine.