Budget Boost, Oil Shock | SA's Two-Speed Week that Changed the Narrative

⚖️ Budget Boost: A Rare Win for Taxpayers 🇿🇦💰

This week kicked off with a surprisingly investor-friendly South African budget — and markets initially loved it.

Key Changes:

• 📈 CGT annual exclusion: R40,000 → R50,000
• 🏠 Primary residence CGT exclusion: R2m → R3m
• 💼 Retirement contribution limit: R350k → R430k (or 27.5%)
• 🌍 Offshore SDA allowance: Doubled to R2m
• 🎁 Donations tax exemption: R100k → R150k
• 🧾 Tax-free savings annual limit: R36,000 → R46,000
• 🏢 VAT registration threshold: R1m → R2.3m

After years of "tax by stealth," this budget offered real relief — especially for investors and small businesses.

💡 Lump Sum vs Monthly Tax-Free?

Data from NinetyOne & Morningstar suggests:

• ✅ Lump sum at the start of the tax year typically outperforms.
• 📊 But in volatile markets, patience may offer better entry points.

Simon has funded his tax-free — but hasn't deployed it yet 👀

💻 Dell Delivers 🚀

Strong results from Dell Technologies sent the share price soaring ~20%.

• Entry around $118
• Now trading near $153
• AI infrastructure demand driving upside
• Big capex spend from hyperscalers boosting the thesis

US markets don't play gently — they reprice fast and aggressively.

🌍 Oil Shock: War & Market Volatility 🛢️🔥

The geopolitical narrative changed dramatically.

Escalating conflict involving Iran has rattled global markets — with oil at the center.

Key Developments:

• ⚠️ Reports of navigation threats in the Strait of Hormuz
• 🚢 Tankers rerouting / suspending activity
• 🛢️ Brent crude jumped from $72 → $83+
• 💸 Rand weakened to 16.36
• 📉 JSE down over 4%

About 20% of global oil supply passes through the Strait. Any prolonged disruption:

• 🚗 Pushes fuel prices higher
• 📈 Risks inflation spikes
• 🏦 Puts rate cuts at risk (MPC meeting: 26 March)
• 🌍 Raises global recession concerns

Possible Scenarios:

1. Quick de-escalation → Oil settles $75–$80
2. Prolonged tension → Oil $90+
3. Full closure → Brent $100+, global recession risk

South Africa imports ~70% of its crude — so oil + rand = inflation risk.

📌 Key message: Don't panic. Stay long-term focused.

🚗 Vehicle Sales: Still Surging 🚙📊

February 2026 vehicle sales surprised again:

• 🚘 Total sales: 53,000 (vs ~48,000 last year)
• 📈 Local sales up 11%
• 📉 Exports down 28%
• 📊 Year-to-date sales up nearly 10%

Strong growth continues — particularly from Chinese brands gaining market share.

Despite geopolitical risk, domestic demand remains resilient.

🤖 AI + Investing: Deep-Dive into SaaS 📈

Simon continues experimenting with AI tools like Claude & Perplexity for fundamental research.

SaaS Sell-Off = Opportunity?

Basket explored:

• Salesforce
• Adobe
• Intuit
• ServiceNow
• Workday
• Datadog

Preferred picks: ✅ Salesforce ✅ Adobe ✅ Intuit

AI-generated DCF models suggest potential upside between 40–75% (based on last week's pricing).

Key insight: Replacing enterprise software isn't about code — it's about retraining millions of users.

🎯 Final Thoughts

Markets are volatile. War introduces uncertainty. Oil is the key risk variable.

But:

• 🧠 Stay rational
• ⏳ Stay long term
• 💰 Deploy capital thoughtfully
• 🚫 Don't panic

If you've got time on your side — don't stress your portfolio.

See you next week 👋

Simon Brown

* I hold ungeared positions.

All charts by KoyFin | Get 10% off your order