High – tech water world estates coming to SA


Cape Town – You might live in Gauteng, but new technology will now allow property developers to emulate coastal living in 2017/18.

Christobal Baixas, global director of Crystal Lagoons, has partnered the global company with property developers in South Africa to bring the refreshing evolution to estate living.

The company has developed technology to allow for large bodies of water to be established and maintained using methods that result in low energy and water consumption.

It allows residents access to water sports like swimming, kayaking, paddle boarding and windsurfing.

Patented in 160 countries with a presence in all five continents, the company has turned its attention to water-mad South Africa.

Baixas told Fin24 that the company turned its attention to South Africa because he believes it has a housing shortage and also has “very good weather”.

“Developers need to set themselves apart and gated communities in South Africa are all very similar,” he said. “New amenities set themselves apart.

“We realised there was a very important interest from developers,” he said, adding that there is a “very interesting pipeline of projects that could materialise in coming months”.

“The idea of having a beach life environment will create enormous value for property developers,” he said.

The company is focusing in Gauteng (Johannesburg and Pretoria), KwaZulu-Natal (Durban) and the North Coast (Ballito and Umhlanga).

“We are looking to develop a project by the end of 2017,” he said.

               Mexico’s Diamante Cabo San Lucas has a Crystal Lagoon and a golf course. (Photo: Supplied)

Will golf courses drown with fresh water parks?

Currently, developers introduce golf courses to make it more competitive, something Baixas believes could change.

He said the obsession with golf course residential estates will start easing with the introduction of the fresh lagoons.

“Crystal lagoons are replacing lots of golf courses around the world,” he said. “It’s more sustainable and more user friendly.

“I do like golf, but the golf estate experience has exploded,” he said. “There is a high density of golf courses and people are not using them.”

Crystal Lagoons license developers to use their technology and once constructed provide a service that monitors and maintains the chemical and water levels in the lagoons remotely from a global tech hub.

Crystal Lagoons consume up to half the water of a park of the same size, and a typical three hectare lagoon uses up to 30 times less water than a standard golf course, the company explained.

Blockchain becoming the rage at US business schools


New York – US business schools are beefing up training in the software that underlies digital currency bitcoin, a technology expected to be a game changer in many industries.

The move makes sense as more students seek careers in financial technology, or “fintech”, which has captivated leading Wall Street banks and been called “the most important technology since the internet”.

In January, the Haas School of Business at the University of California at Berkeley will offer its first ever course in blockchain software.

The Haas school, which is near San Francisco and Silicon Valley, will handpick 60 students from the departments of business, engineering and law and split them into groups of six to explore possible applications of the technology.

“When people think about blockchain they think about cryptocurrencies,” said Haas school lecturer Greg LaBlanc, who sees the technology as potentially disrupting many sectors.

“We believe it will have the biggest impact on contracting, logistics and supply chains, healthcare, public administration, assets clearing, property, transactions,” he said.

“Pretty much every function of businesses are going to be affected by this.”

‘Very transformational’

Blockchain runs by recording transactions as “blocks” that are updated in real time on a digitised ledger that can be read from anywhere and does not have a central recordkeeper.

It was originally developed as the accounting method for bitcoin. But while that cryptocurrency remains controversial with some players in finance, bankers increasingly see exposure blockchain as a must.

Blockchain is “something we are very optimistic about”, JPMorgan Chase chief financial officer Marianne Lake said on a conference call last month.

Newer technologies could be “very transformational for the financial services industry and we are forward-leaning and optimistic about that”, Lake added.

The technology, which lets users trace items back through their supply chains, also could offer a means to limit tainted food problems, or to guard against “blood diamonds” that come from a war-ravaged area.

In finance, blockchain could be used to permit parties to check the solvency of counterparties, significantly reducing costs.

Training students for that function and other evolving roles in finance is altering curricula at universities and shifting how students structure their programmes.

Students who wish to work in trading must learn how to code, while bankers need to understand algorithms and big data to be able to attract new clients and devise strategies for fast-changing markets.

Traditional skills still required

“Anyone who is coming into the financial industry is expected to have some skills in technology,” said Stephen Daffron, a founder of Motive Partners, a private equity firm specialising in fintech investment.

“If they don’t understand how to evaluate a company that tries to employ blockchain, then they probably won’t be a good fit for us,” said Daffron, who lectures at the Yale School of Management.

Barbara Hewitt, senior associate director in the career services office at the University of Pennsylvania, home to the Wharton School, also noted the rising interest in new skills and technology.

“I increasingly see students opting to explore technical minors, such as in computer science, to be well prepared for the growing use of technology in many fields,” she said.

But if exposure to fintech has become more important to hireability, traditional skills such as accounting, mathematics and understanding of economics remain the top criteria for recruiters, the schools say.

Companies “want people with strong technical skills, people with management skills”, said Abigail Kies, assistant dean of career development at Yale.

At Yale, about 20% of 2016 graduates found jobs in finance, according to figures supplied by the university.

Fritz Foley, a finance professor at Harvard Business School said jobs in this sector still “require strong analytical abilities, an understanding of institutional details, and good judgment”.

“These requirements have not changed as innovations have occurred.”

Regulators gone mad: Ban Bitcoin before the bubble bursts


ON THE the one hand, the world’s regulators are creating havoc in the financial markets. On the other, they are seriously neglecting the harm that Bitcoin is creating.

They are disrupting the free flow of investment around the globe with ever more data collection, with banks and others asking ever more personal questions to add to their data bases.

What happens when those data bases get hacked?

HSBC is closing down some of its facilities to those who refuse the 45-minute telephone interview.

It is almost impossible to open an account to trade in stocks and shares without completing a detailed money-laundering fact find. They want hard or certified passport copies along with other documents in many cases.

For example, in some countries you will also need a driver’s licence, birth certificate, social security or tax ID numbers, employment information, proof of address, maybe a marriage certificate, and so on. There are other requirements and regulations that need to be fulfilled as well.

In fact, a friend of mine says he can only get paid by Bitcoin transfer because regulators say that money-laundering is using small recurring payments like his.

As for pension funds – there is a problem in the UK if you want to move your fund – you must get a financial adviser to approve the move and then you must pay annual fees on the fund to that adviser, a free gift to the already well off.


And if banning money laundering is the main concern, and if managing the stock of money in circulation is a key part of monetary policy, why are they not banning Bitcoin?

One day, they must.


By not banning Bitcoin, they are allowing the bubble to grow so that as many people as possible get hurt when, eventually they realise that they must ban it simply to have space to manage their own monetary policy.

It is fair to say that the facility provided by Bitcoin is extremely important – it enables money to cross frontiers very fast, whereas if you use your traditional method you run into a lot of administration (regulations again) and it takes time.

Central banks ask what the money is for, and where did it come from. You can tell a lie – they will not even know. It is a waste of everyone’s time.

You can allow your bank to do this for you and they will give the answers for you, but then they can make a LOT of commission.

Take 3% of all international transactions in a day and give it to the world’s banks as a commission and you may have given them 3% of trillions. What have they done to earn that much? Made friends with the regulators maybe. It is an ugly world, this world of regulators.


Regulators put me out of business along with hundreds of other small investment managers in the UK in the 1990s. Instead of creating my Niche Platform to enable financial advisers to manage client money without touching it – ever – they increased the capital requirements of those advisers, so the smaller ones taking less in fees, sold out to the biggest, and often the worst ones.

(National Investment Clearing Housemy Niche Platform, is a government guarantee against fraud and a way to move money fast from one investment class to another, one fund manager to another, one stock broker to another or from shares to cash to your bank. It would pay for itself using interest on overnight money. The DTI set up a meeting with representatives of all stakeholders. I attended as the originator. Then I had to emigrate because I had to retire because of those regulations I mentioned, and they forgot about it as a new financial crisis hit home.)

I had to sell out. Yet my track record on published comparisons shows that I constantly outperformed all institutional competitors doing the same things.

For your information, there are currency brokers who can and do move money for you across currencies for a fee of as little as 1% – even less. I’m happy to name names if you contact me.

Why caution is required with highly speculative Bitcoin


WITH the price of a bitcoin reaching record highs of more than $15 000 on Thursday, more and more ordinary people consider investing in the cryptocurrency. The recent price surge, however, comes with tremendous risks. Investors should be prepared for the possibility that they could lose their entire investment.

Bitcoin was launched in 2008 by an anonymous author under the name of Satoshi Nakamoto as a means of transacting among participants without the need for intermediaries. Since the beginning of this year, the price of bitcoin has increased by 1 300% as more and more consumers flock to it hoping to profit off its increasing popularity and the associated increase in value.

Cryptocurrencies are not currencies at all. As the Financial Times explains, bitcoin is a string of computer codes which means that new bitcoins can be created – up to an agreed limit – by computers that gain the right to do so by solving complex puzzles. Transactions are recorded in a database called a blockchain.

Bitcoin, like other assets such as gold, doesn’t yield income. You have to sell it to realise any value. And, like gold and other currencies, it can be transferred peer-to-peer.

Part of the nervousness about bitcoin is that, along with other cryptocurrencies, it challenges the traditional role of banks and central banks. In the classical world, banks act as intermediaries by providing loans out of the deposits they took and from funding from the central bank. The central bank uses the rate at which it provides this funding as a lever to ensure price stability.

The introduction of cryptocurrencies threatens this model because banks are no longer necessary to intermediate funds and there is no central bank to ensure that prices are stable.

The more immediate fears about bitcoin centre on the recent dramatic rise in its value. There’s nervousness in the market that a flash crash might be imminent after the cryptocurrency tumbled by more than $1 300 in minutes on the bitcoin exchange Bitfinex. It did however recover to record levels  above $15 000.

The flash crash echoes long standing warnings that the bitcoin party is set to end in tears. Most recently Jamie Dimon, CEO of JPMorgan, one of the world’s largest investment banks declared that he would fire any employee trading bitcoin for being stupid.

In a highly unusual alliance, his words were echoed by economics Nobel Laureate Joseph Stiglitz, who has gone even further arguing that bitcoin ought to be outlawed.

All of these are clear warning signs that the professionals do not trust the lofty promises of crypto enthusiasts.

The blockchain factor

There is no doubt that Bitcoin – and in particular blockchain, the technology behind it – has the potential to revolutionise the financial services industry.

A blockchain functions as a transparent and incorruptible digital ledger of economic transactions, recorded in chronological order, that operates on a peer-to-peer network.

Fundamentally, the technology allows exchange of value to occur in an environment of peers with conflicting interests without the need for trusted intermediaries. That, in effect, wipes out the need for banks or financial services companies which fulfil this role.

The use of the technology is not limited to financial transactions. Virtually anything of value can be traded on a blockchain.

But no matter how useful the underlying blockchain technology is, or how widely it can be applied, there are real and substantial risks involved in bitcoin.

Volatility versus returns

The first, and most significant risk is that compared to any currency, share, or gold, bitcoin is extremely volatile. The volatility of bitcoin to US dollar is almost six times the volatility of the rand to US dollar. While this is great in good times, it is potentially devastating for investors in bad times.

When professional investors decide on which assets to hold, they look at both the return and the volatility of the asset. Only investors with a healthy appetite for risk are willing to invest in risky, volatile assets. Usually these are finance professionals, for example in large investment banks or hedge funds.

Investors with a lower risk appetite, such as asset managers or pension funds, prefer assets with a somewhat lower return, but which are less volatile.

The rule of thumb is that the sophistication of an investor increases with the volatility of the asset she invests in. But with bitcoin this rule of thumb doesn’t hold true. More and more private investors have been flocking to bitcoin ‘exchanges’ that have sprung up all over the internet and that are aggressively advertised on social media.


There is a huge risk that bitcoin is already overvalued.

The practical use cases for bitcoin are limited. It doesn’t enable enough transactions to take place per second to be used as a replacement for a modern payment system. And it doesn’t offer any functionality other than pseudonymous transactions – transactions where the true identity of the counterparties is hidden.

Bitcoin is favoured by pyramid schemes, including the infamous MMM pyramid scheme in Nigeria. In a recent article, the Financial Times called bitcoin itself a pyramid scheme, much to the dismay of crypto enthusiasts. (A pyramid scheme is usually an illegal operation in which participants pay to join and profit mainly from payments made by subsequent participants. If no new people come in, it collapses.)

Regulatory risk

The third, and possibly biggest risk is regulatory. In September 2017, the Chinese government outlawed bitcoin exchanges in mainland China, sending the price of bitcoin tumbling.

Despite the claim that bitcoin is a “global currency”, the reality is that 58% of all bitcoin mining happens in China. If at any point the Chinese government should decide to make Bitcoin mining illegal the price is likely to plunge into oblivion.

Other countries have also voiced concern. The Russian Central Bank recently issued a warning to investors on the risks of investing in cryptocurrencies, citing concerns about a bubble. This suggests that there might be a concerted crackdown.

Cryptocurrencies are banned in India as their use is a violation of foreign exchange rules. The Australian Reserve Bank has taken a different approach. It monitors the cryptocurrency market in a bid understand the underlying technology.

The South African Reserve Bank has expressed its openness to blockchain technologies. But it has also highlighted potential risks to consumers.

A classic bubble

There are real risks that many consumers investing in cryptocurrency don’t fully understand. Advertisements promise that bitcoin can make you rich fast. And social media is alive with stories about friends of neighbours or distant cousins who have made a lot of money through bitcoin.

Without a doubt, these cases are real, and those who invested early can reap large benefits. But this is true in every bubble – from the dotcom bubble to the tulip mania. It’s also true in every pyramid scheme.

The ConversationAs always, investors should be extremely wary with any scheme that promises quick returns.

US agency gives green light to trade Bitcoin on major exchanges


New York – A US regulator cleared the way Friday for bitcoin futures to trade on major exchanges, but warned investors the digital currency is prone to elevated risk and volatility.

The decision opens the door for the Chicago Mercantile Exchange and CBOE Futures Exchange to offer contracts for futures of the virtual currency, rather than trading the actual currency.

The deal with the Commodities and Futures Trading Commission agency also enables Cantor Exchange to offer bitcoin options, another type of derivative contract, which allows for trading without taking ownership of an underlying asset.

CFTC chair J. Christopher Giancarlo said after “extensive discussions with the exchanges” they “agreed to significant enhancements to protect customers and maintain orderly markets.”

The agency said the exchanges agreed to modify the derivatives contracts and promised to coordinate with the CFTC and each other to guard against market manipulation and other irregularities.

“Bitcoin, a virtual currency, is a commodity unlike any the Commission has dealt with in the past,” he said in a statement, warning that “investors should be aware of the potentially high level of volatility and risk in trading these contracts.”

The agreement with the exchanges does not mean the CFTC endorses the digital currency or the various trading products, he said.

The announcement comes a day after a Federal Reserve governor Randal Quarles, the Fed’s vice chair of banking regulation, warned that digital currencies like bitcoin could pose a threat to financial stability as they gain wider use because of the uncertainty of how they would fare during a crisis.

Zim equities are almost more Bitcoin than Bitcoin

Flag of Zimbabwe sticking in a variety of american banknotes.(series)

Harare – Look before you leap. Zimbabwe’s political shake-up isn’t exactly the first step on the road to investment.

A jump of 390% year-to-date in the benchmark Zimbabwe Industrial Index, which has a market capitalisation of $14.5bn and excludes mining companies, looks fabulous news for frontier funds invested in what used to be called Africa’s bread-basket.

It’s held on to those gains even as the military seizes power. It might be tempting to watch for a dip as a buying opportunity.

Zimbabwe’s YTD benchmark equity gain 390%

The problem is getting your money out. After some serious hyperinflation, the country abandoned its own currency in favour of the US dollar in 2009, and it has become increasingly more difficult to extract capital. Foreign investors have been trapped in their holdings for most of this year, unable to exit or cash in what look like huge profits.

Stocks have become Zimbabwe’s version of Bitcoin. Meanwhile, Bitcoin’s version of Zimbabwe seems to be having a good day.

It’s a similar picture for the MSCI Zimbabwe index, which has jumped 420% this year. The index consists of just two companies; a drinks conglomerate called Delta Corporation and Econet Wireless Zimbabwe.

There is a serious scarcity of cash, and bank deposits, in Zimbabwe’s broken economy. Equities are the only viable means of exchange, but this has pushed prices through the roof.


The country’s shares are trading at a 475% premium to cash, according to an Exotix analysis of Old Mutual data. That difference has to collapse for there to be any chance of Zimbabwe normalising.

Injections of new funds into the system should reduce the excessive equity valuations. But the International Monetary Fund, or any other foreign investor into specific companies or projects, will need to be certain that the economy and banking system can function before being able to help or inject capital. That may be a long way off.

It is not certain that President Robert Mugabe will even be removed from his titular post – he remains revered within his country. This is not a grass-roots revolution but a succession plan aimed at preventing a dynastic handover to his wife.

Until Zimbabwe allows for the return of capital, only the very well-informed, or the very brave, should think about diving in.

Can you rely on your home to fund your retirement


For many South Africans, including SA’s ageing community, the bulk of their equity is tied up in one asset, their home.

But, should that home be relied on to fund retirement?

No, say Maystone Wealth’s certified financial planners. If it’s your home, it’s a non-performing asset.

“You can’t extract value out of it if you are living in it, nor is it generating an income,” explains Maystone’s Kevin Joss.

“Additional cash might be extracted when selling and downsizing. But it’s an uncertain variable and not something to be relied on. That also presumes you want to sell.

You don’t want to be put in a position where you are forced to sell to derive retirement income.”

Colleague Dino Paizes adds: “Capital upside from selling your house should be seen as a bonus, not part of your retirement plan or the income required to live on.”

While the risks associated with being forced to sell are reduced when the home is in a prime location, realising the expected equity is not always a given, especially in a challenging economic and political environment, caution Joss and Paizes.

House price growth is declining and 10.1% of homes are now selling at a deflated price.

Homes are also staying on the market longer, now 15.6 weeks compared to 11 weeks in 2015, says John Loos, household and property sector strategist at FNB.

Demand in particular for larger freehold homes – many of which are home to SA’s ageing population – is dwindling as the popularity of safe and secure smaller properties increases.

There has been a steady pattern of “life stage” downscaling from ageing households, which currently comprise 26% of total selling, by far the largest single group of home sellers in the third quarter of 2017.

Also rising is the percentage of homeowners downscaling due to financial pressure, now 14%, up from 11% in early 2016, according to FNB figures.

Where one’s home is the only asset to fund retirement, extracting the best and realistic value – whether from the proceeds of a sale or the renting out of the property – is paramount and best done with the guidance of a financial planner.

A good certified financial planner will weigh up replacement retirement home purchasing and rental options in conjunction with monthly income requirements.