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David (TalkingCents)

@talkcentss

Mar 3

Dividends Explained

🟢 𝗔𝗱𝘃𝗮𝗻𝘁𝗮𝗴𝗲𝘀
🔴 𝗗𝗶𝘀𝗮𝗱𝘃𝗮𝗻𝘁𝗮𝗴𝗲𝘀

Time to learn 🔻

𝟭/ 𝗗𝗶𝘃𝗶𝗱𝗲𝗻𝗱𝘀

Dividends are payments made by a company to its shareholders.

When you invest into a company (own equity) you become a shareholder of that company and then have a claim on future cashflows.

The net profits from the respective company you’ve invested in can be:

(𝟭) 𝗥𝗲𝗶𝗻𝘃𝗲𝘀𝘁𝗲𝗱 𝗯𝗮𝗰𝗸 𝗶𝗻𝘁𝗼 𝗯𝘂𝘀𝗶𝗻𝗲𝘀𝘀
(𝟮) 𝗥𝗲𝗱𝗶𝘀𝘁𝗿𝗶𝗯𝘂𝘁𝗲𝗱 𝘁𝗼 𝗲𝗾𝘂𝗶𝘁𝘆 𝗵𝗼𝗹𝗱𝗲𝗿𝘀
(𝟯) 𝗕𝗼𝘁𝗵 (𝗿𝗲𝘁𝗮𝗶𝗻𝗲𝗱 + 𝗿𝗲𝗱𝗶𝘀𝘁𝗿𝗶𝗯𝘂𝘁𝗲𝗱)

The retention and amount of distributions are dependent on what the board of directors decide.

———

𝗙𝗼𝗿𝗺𝘀 𝗼𝗳 𝗗𝗶𝘃𝗶𝗱𝗲𝗻𝗱𝘀

Dividends can be paid in two forms, depending on what is decided:

(1) Paid in cash
(2) Additional Shares, known as a stock dividend

This is the way for a company to share its profits, and can be seen as a sign of financial stability.

Read 10 tweets

David (TalkingCents)

@talkcentss

Feb 7

𝗚𝗼𝘃𝗲𝗿𝗻𝗺𝗲𝗻𝘁 𝗕𝗼𝗻𝗱𝘀 🇿🇦

Let me explain the difference between RSA Retail Savings Bonds and tradable South African bonds.

𝗙𝗶𝗻𝗱 𝗼𝘂𝘁 🔻

** Glossary **

𝗕𝗼𝗻𝗱:

A bond is a debt security. You can think of it as an I-O-U.

You lend money to someone, and then they promise to pay that money back to you + interest.

𝗠𝗮𝘁𝘂𝗿𝗶𝘁𝘆:

Refers to the date on which the bond issuer (debtor) pays back everything they owe to bondholders ( creditor ).

1/ Introduction

When it comes to bonds there are two markets one can opt to participate in:

🟠 The Primary Market
🟠 The Secondary Market

The primary market is where you 𝗯𝘂𝘆 𝗶𝘁 𝗱𝗶𝗿𝗲𝗰𝘁𝗹𝘆 𝗳𝗿𝗼𝗺 𝘁𝗵𝗲 𝗴𝗼𝘃𝗲𝗿𝗻𝗺𝗲𝗻𝘁 but then cannot sell it to someone else because there is no secondary market for it.

*So the price of the bond cannot fall.

𝗧𝗵𝗶𝘀 𝗶𝘀 𝘄𝗵𝘆 𝘁𝗵𝗲𝗿𝗲 𝗮𝗿𝗲:

🟢No fees
🟢No commission
🟢No Risk
🟢Guaranteed returns

——————

𝗥𝗲𝘁𝗮𝗶𝗹 𝗦𝗮𝘃𝗶𝗻𝗴𝘀 𝗕𝗼𝗻𝗱𝘀 𝗮𝗿𝗲 𝗻𝗼𝘁 𝘁𝗿𝗮𝗱𝗲𝗱 𝗼𝗻 𝘁𝗵𝗲 𝘀𝗲𝗰𝗼𝗻𝗱𝗮𝗿𝘆 𝗺𝗮𝗿𝗸𝗲𝘁 and this is what makes them different from tradable government bonds.

𝗢𝗽𝗽𝗼𝘀𝗶𝘁𝗲 𝘁𝗼 𝘁𝗵𝗮𝘁,

Tradable government bonds have a secondary market where they can be traded or held to maturity.

This means you can sell it when you want to, but it also means you can potentially lose money if the bond price has fallen lower than your original purchase price.

With tradable government bonds, you are 𝘀𝘂𝗯𝗷𝗲𝗰𝘁𝗲𝗱 𝘁𝗼 𝗶𝗻𝘁𝗲𝗿𝗲𝘀𝘁 𝗿𝗮𝘁𝗲 𝗿𝗶𝘀𝗸.

Read 16 tweets

David (TalkingCents)

@talkcentss

May 9, 2024

𝗧𝗵𝗲 𝗖𝗮𝘀𝗵𝗳𝗹𝗼𝘄 𝗦𝘁𝗮𝘁𝗲𝗺𝗲𝗻𝘁

This is the part where many of us get confused when reading financial statements.

But not anymore🔻

https://twitter.com/talkcentss/status/1787121236373635115

*** Catch up ***

Here is a basic understanding of the three most common financial statements.

Start with this thread before continuing 🔻

https://twitter.com/talkcentss/status/1787121236373635115

1/ The Cashflow Statement

Is an important tool used to manage the finances of a business by tracking the cash flow of an organization.

It’s divided into 3 Parts:

▪️Operating activities
▪️Investing activities
▪️Financing activities

Read 13 tweets

David (TalkingCents)

@talkcentss

May 5, 2024

𝗙𝗶𝗻𝗮𝗻𝗰𝗶𝗮𝗹 𝗦𝘁𝗮𝘁𝗲𝗺𝗲𝗻𝘁𝘀 𝗘𝘅𝗽𝗹𝗮𝗶𝗻𝗲𝗱

▪️Cashflow Statement
▪️Income Statement
▪️Balance Sheet

Beginners guide 🔻

1/ 𝗜𝗻𝘁𝗿𝗼𝗱𝘂𝗰𝘁𝗶𝗼𝗻

𝗔𝗰𝗰𝗼𝘂𝗻𝘁𝗶𝗻𝗴 records information related to a business’s transactions,

It provides a summary of statements reflecting the financial performance of an entity. Think of it as the 𝗹𝗮𝗻𝗴𝘂𝗮𝗴𝗲 𝗼𝗳 𝗯𝘂𝘀𝗶𝗻𝗲𝘀𝘀.

Let’s take a look 🔻

2/ 𝗧𝗵𝗲 𝗖𝗮𝘀𝗵𝗳𝗹𝗼𝘄 𝗦𝘁𝗮𝘁𝗲𝗺𝗲𝗻𝘁

The Cashflow statement shows:

▪️Sources
(where money came from)

▪️Uses
(how the money was used)

It 𝘁𝗿𝗮𝗰𝗸𝘀 𝘁𝗵𝗲 𝗰𝗮𝘀𝗵 𝗺𝗼𝘃𝗲𝗺𝗲𝗻𝘁𝘀 of a business (Money in, and money out)

Read 12 tweets

David (TalkingCents)

@talkcentss

Mar 25, 2024

𝗧𝗵𝗲 𝗦𝗼𝘂𝘁𝗵 𝗔𝗳𝗿𝗶𝗰𝗮𝗻 𝗥𝗲𝘀𝗲𝗿𝘃𝗲 𝗕𝗮𝗻𝗸

National Treasury ( NT ) plans to use the 𝘂𝗻𝗿𝗲𝗮𝗹𝗶𝘇𝗲𝗱 𝗴𝗮𝗶𝗻𝘀 from the Gold and Foreign Exchange Contingency Reserve Account ( GFECRA )

They call it ‘𝗪𝗮𝘁𝗲𝗿𝗳𝗮𝗹𝗹’ arrangement

Learn more 🔻

** Glossary **

▪️National Treasury
▪️GFECRA

National Treasury is one of many departments of the South African Government

The Treasury falls within the portfolio of the Minister of Finance, and the role of NT is to manage the Government’s Finances.

The South African Revenue Service (SARS) and Statistics South Africa also fall under this wing.

——————-

The Gold and Foreign Exchange Contingency Reserve Account is a tool used to safeguard the country's financial stability.

This account’s purpose is in its name, it holds the reserves of gold and foreign currencies South Africa has built up.

1/ The Waterfall Arrangement

𝗦𝗶𝗻𝗰𝗲 𝘁𝗵𝗲 𝗺𝗼𝗻𝗲𝘆 𝘁𝗵𝗮𝘁 𝘄𝗲𝗻𝘁 𝗶𝗻𝘁𝗼 𝘁𝗵𝗲 𝗚𝗙𝗘𝗖𝗥𝗔 𝘄𝗲𝗻𝘁 𝗶𝗻 *𝘂𝗻𝘀𝗲𝘁𝘁𝗹𝗲𝗱, it means it has grown larger over the years due to currency depreciation.

( remember this, cause this will be important later on )

—————

Going forward, the funds from the GFECRA will now be distributed into 3 pools, 𝘄𝗵𝗶𝗰𝗵 𝘄𝗶𝗹𝗹 𝗯𝗲 𝗸𝗻𝗼𝘄𝗻 𝗮𝘀 𝘁𝗵𝗲 𝗪𝗮𝘁𝗲𝗿𝗳𝗮𝗹𝗹 𝗮𝗿𝗿𝗮𝗻𝗴𝗲𝗺𝗲𝗻𝘁.

The three pools are:

(1) GFECRA Buffer Account
(2) SARB’s Contingency Reserve
(3) National Treasury

—————-

𝗙𝗼𝗼𝘁𝗻𝗼𝘁𝗲:

*Unsettled funds going into 𝗚𝗙𝗘𝗖𝗥𝗔, means funds that entered into the account and had no purpose, they weren’t allocated or spent to anything specific.

*Picture just for visualization purposes to show the 3 Pools ( Waterfall arrangement)

Read 14 tweets

David (TalkingCents)

@talkcentss

Mar 19, 2024

𝗕𝗿𝗲𝘄𝗲𝗱 𝘁𝗼 𝗟𝗮𝘀𝘁

The Beer with the Longest and Proudest Heritage in South Africa

𝗧𝗵𝗲 𝗗𝗮𝗿𝗸 𝗦𝗲𝗰𝗿𝗲𝘁𝘀 𝗡𝗼 𝗢𝗻𝗲 𝗧𝗼𝗹𝗱 𝗬𝗼𝘂

Read more 🔻

1/ History

𝗟𝗲𝘁’𝘀 𝗰𝗿𝗮𝗰𝗸 𝘁𝗵𝗶𝘀 𝗼𝗽𝗲𝗻….. 🍺

The story dates back to 1886 and can be traced to the days of the Johannesburg Gold rush.

Here is how a man with a small brewery in Northern Natal led to the historic legacy of the South African Breweries (SAB)
——————————————

𝗧𝗵𝗲 𝘀𝘁𝗼𝗿𝘆 𝗼𝗳 𝗖𝗵𝗮𝗿𝗹𝗲𝘀 𝗚𝗹𝗮𝘀𝘀…..

Charles Glass, British-Born-Brewer, established Glass & Co in 1864, which ended up giving birth to a global powerhouse in the later years.

As time passed, he saw a money making opportunity in the market, to provide miners with beer in the Witwatersrand Reef (𝗮𝗹𝘀𝗼 𝗸𝗻𝗼𝘄𝗻 𝗮𝘀 𝘁𝗵𝗲 𝗥𝗮𝗻𝗱).

—————
*𝚃𝚑𝚎 𝚐𝚘𝚕𝚍 𝚛𝚞𝚜𝚑 𝚝𝚑𝚊𝚝 𝚋𝚎𝚐𝚊𝚗 𝚒𝚗 𝟷𝟾𝟾𝟼 𝚒𝚜 𝚠𝚑𝚊𝚝 𝚕𝚎𝚍 𝚝𝚘 𝚝𝚑𝚎 𝚎𝚜𝚝𝚊𝚋𝚕𝚒𝚜𝚑𝚖𝚎𝚗𝚝 𝚘𝚏 𝙹𝚘𝚑𝚊𝚗𝚗𝚎𝚜𝚋𝚞𝚛𝚐*
—————

The beer soon became a hit that Charles and his wife, Lisa, decided to set up their brewery in the business centre of the town to capture the influx of fortune seekers coming to Witwatersrand Reef.

The phrase “𝗗𝘂𝗿𝗶𝗻𝗴 𝗮 𝗴𝗼𝗹𝗱 𝗿𝘂𝘀𝗵, 𝘀𝗲𝗹𝗹 𝗯𝗲𝗲𝗿𝘀”, seems more appropriate here”.

His beer brew took some time to gain traction, it was only when Charles Glass’s new beer, 𝗖𝗮𝘀𝘁𝗹𝗲 𝗕𝗲𝗲𝗿, was introduced that he won the miners over and secured the market.

It was in 1884 that Castle’s famous label, 𝘁𝗵𝗲 𝘁𝗵𝗿𝗲𝗲-𝘁𝘂𝗿𝗿𝗲𝘁𝗲𝗱 𝗳𝗼𝗿𝘁𝗿𝗲𝘀𝘀, 𝘄𝗮𝘀 𝗶𝗻𝘁𝗿𝗼𝗱𝘂𝗰𝗲𝗱.

——————
*𝘏𝘦 𝘪𝘮𝘱𝘰𝘳𝘵𝘦𝘥 𝘩𝘪𝘴 𝘬𝘦𝘺 𝘪𝘯𝘨𝘳𝘦𝘥𝘪𝘦𝘯𝘵𝘴 𝘧𝘳𝘰𝘮 𝘌𝘯𝘨𝘭𝘢𝘯𝘥 𝘵𝘰 𝘬𝘦𝘦𝘱 𝘶𝘱 𝘸𝘪𝘵𝘩 𝘥𝘦𝘮𝘢𝘯𝘥*
——————

As a result of his success with Castle Beer, he renamed his business to “𝗖𝗮𝘀𝘁𝗹𝗲 𝗕𝗿𝗲𝘄𝗲𝗿𝘆” and focused on distribution, to expand.

𝗖𝗮𝗽𝘁𝘂𝗿𝗶𝗻𝗴 𝘁𝗵𝗲 𝗮𝘁𝘁𝗲𝗻𝘁𝗶𝗼𝗻 𝗼𝗳 𝗼𝘁𝗵𝗲𝗿𝘀…..

Other brewing companies grew interested in Charles Success, and soon realized the market was MASSIVE in the Witwatersrand.

Because of this astonishing growth, Frederick Mead, another brewer from Pietermaritzburg, negotiated to purchase Castle Brewery in
July of 1892.

Frederick Mead’s brewing empire combined with Castle brewery 𝘁𝗼 𝗳𝗼𝗿𝗺 𝘁𝗵𝗲 𝗦𝗼𝘂𝘁𝗵 𝗔𝗳𝗿𝗶𝗰𝗮𝗻 𝗕𝗿𝗲𝘄𝗲𝗿𝗶𝗲𝘀 (𝗦𝗔𝗕) 𝗶𝗻 𝟭𝟴𝟵𝟱.

2/ 𝗖𝗼𝗻𝗻𝗲𝗰𝘁𝗲𝗱 𝗛𝗶𝘀𝘁𝗼𝗿𝘆

Because of the extraordinary quantities of gold that had been extracted from the Witwatersrand rocks,

𝘁𝗵𝗲 𝗦𝗼𝘂𝘁𝗵 𝗔𝗳𝗿𝗶𝗰𝗮𝗻 𝗰𝘂𝗿𝗿𝗲𝗻𝗰𝘆 𝘄𝗮𝘀 𝗻𝗮𝗺𝗲𝗱 𝘁𝗵𝗲 𝗥𝗮𝗻𝗱 𝗶𝗻 𝟭𝟵𝟲𝟭 upon the declaration of the republic

Learn more here:

The History of the South African Reserve Bank 👇🏽

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