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2022 ANNUAL NEWS MEMO

The seemingly organized attack on the United States Capitol building in Washington D.C. on the 6th January 2021 should surely go down in American history as firstly, an example of a possible result when the democratic process works. Secondly, as a poignant example for the future generations of Americans that a defeat in the political arena is always on the horizon. This therefore dictates the acceptance of a result and not only the acceptance of a favourable result. At the time of writing, the impact that this once in a lifetime event would have on business sentiment levels in America was not yet clear. Some analysts would have possibly concluded that the ramifications would be minimal since this was the first political occurrence of its kind. Whatever the general consensus regarding this occurrence, the unnecessary loss of life which came as a result should serve as a firm reminder of what could go wrong when absolute power ends up in the hands of undesirable politicians - something which has sadly become a grim norm on the African continent.

The seemingly organized attack on the United States Capitol building in Washington D.C. on the 6th January 2021 should surely go down in American history as firstly, an example of a possible result when the democratic process works. Secondly, as a poignant example for the future generations of Americans that a defeat in the political arena is always on the horizon. This therefore dictates the acceptance of a result and not only the acceptance of a favourable result. At the time of writing, the impact that this once in a lifetime event would have on business sentiment levels in America was not yet clear. Some analysts would have possibly concluded that the ramifications would be minimal since this was the first political occurrence of its kind. Whatever the general consensus regarding this occurrence, the unnecessary loss of life which came as a result should serve as a firm reminder of what could go wrong when absolute power ends up in the hands of undesirable politicians - something which has sadly become a grim norm on the African continent.

Take for instance the July 2021 unrest in South Africa which seemingly originated from the provinces of Gauteng and KwaZulu Natal sadly resulting in over 300 deaths according to reports. In this local instance of political unaccountability what should be at the forefront is not so much the actual cause of this fatal period of civil unrest but more so the question as to who is going to be responsible for the dependants of the souls that lost their lives during this deplorable period in the history of the hard-won South African democracy. Surely it cannot be the taxpayer. It does not come as a surprise why there are some analysts who have been anticipating the Rand to play doormat to the US dollar shortly thereafter as a result of the instability and uncertainty caused by the riots. Could it be that it is the minerals-energy complex contributing to the resilience of the Rand? The same complex that is seemingly propping up the ever so apparent and persistent levels of inequality in democratic South Africa? Could the looting be a possible and unexpected by-product of president Cyril Ramaphosa's supposed new dawn? These and more are good questions for investors to ask, answers to which could ultimately lead to the desired levels of economic activity and the much needed sustained job creation and collective wealth creation.

Even though divisive politics has the historical tendency of stealing the spotlight, 2021 was certainly the year where Non Fungible Tokens were not to be outshined regardless of the global political discourse and nuances. Now commonly known as NFTs these unique and interchangeable units of data stored on a blockchain have arguably become the hottest digital assets on the market. The nouveau digital asset class's appeal is closely linked with reproducible digital files such as photos, video and audio which then broadens the use cases of this tech asset. On an interview by CNN's Julia Chatterley and seemingly having been on the NFT scene for some time, American digital artist Mike Winkelmann - known professionally as Beeple - could not have possibly imagined selling an NFT art piece for just shy of $70 million on March 12th, 2021. The artwork titled "Everydays: the first 500 days" which is a collage of images from his "Everydays" series has, according to British auction house Christie's, earned him the credit of being "a visionary digital artist at the forefront of NFTs". Later in 2021 Beeple followed up with the sale of another one of his artworks (HUMAN ONE) to collector Ryan Zurrer for $28,958,000 million. His Wikipedia page quotes him as describing the generative, dynamically changing artwork as "the first portrait of a human born in the metaverse".

The abundance in the NFT space, which according to some critics is a bubble waiting to pop, has unfortunately not carried over into the global semiconductor foundry industry. Commonly called fabs, these factories where devices such as Integrated Circuits (IC) are manufactured have been unable to meet unprecedented global demand and 2021 is the year the impact of this shortage has been felt. Also deemed as the 2020 - 2022 global chip shortage it is apparently an ongoing crisis in which the growing demand for integrated circuits has outstripped the current supply which has as a result affected more than 160 global industries. This supply chain challenge has in part been seemingly sparked by the covid 19 pandemic and the ongoing economic conflict and decoupling between global superpowers China and the United States of America. It has also been attributed to the dynamics of the small number of suppliers in this industry where it seems as though Taiwan in particular has cornered this market. According to Boston Consulting and the Semiconductor Industry Association, Taiwan currently accounts for 92% of the world's most advanced semiconductor manufacturing capacity. This near monopoly and the ongoing broader application of semiconductors - especially in consumer products such as vehicles, graphics cards, video game consoles and computers - brings the salient analysis of consumption trends under a more glaring spotlight. It would not be a surprise to see the development of more consumer consumption patterns driven by minimalism over the short to medium term, a trend that would come to the aid of global warming.

A more temporary supply chain glitch in 2021 which also cast a spotlight on global supply chains linking East to West is the Ever Given container ship being caught in a sandstorm causing the hull to deviate and the ship to get stuck as it was sailing through the Suez Canal. To say that this rare disruption exposed the fragility of the global supply chain quagmire is a euphemism. Not only did this modern day anomaly cost the parent company, Shoei Kisen Kaisha, of the Ever Given a reported conjectured amount of $600 million but it also raises the question of why, in the modern day, does global goods trade still have one option for linking East to West. Surely with all the technological advancements that humanity has attained, global trade should have more options which serve as unwavering guarantees for the supply of goods besides the geographically longer and presumably more expensive option which goes around South Africa. This evident area of improvement in the current global supply chain system could present an opportunity for the early adoption of Elon Musk's hyperloop transportation system or expedited acceptance of the China belt and road initiative if the latter is executed in the spirit of inclusive economic fairness.

Without deviating away from the China topic, according to Wikipedia the Evergrande group is the second largest property developer in China by sales volume and is also ranked 122nd on the Fortune 500 list of global top tier companies. This Asian property behemoth has not quite lived up to its Wikipedia description in recent times due to the controversy surrounding its financial problems which seemingly commenced in 2016. This is the same year where apparently the Hong Kong Market Misconduct Tribunal suspended American short seller and Citron Research founder, Andrew Left, for five years due to a highly critical report on the company. According to the New York Times the trading ban raised concerns over freedom of speech in Hong Kong's financial markets but it appears Andrew Left has been vindicated because in the summer of 2021 payments due on the company's debt, estimated in the hundreds of billions of dollars according to Wikipedia, have resulted in what is now commonly known as the Evergrande liquidity crisis. This seems to have had a negative ripple effect on the financial markets leading to a drop in a handful of stock market indices on September 20th, 2021. In his April 18th, 2022 article in the South China Morning Post, business reporter Lam Ka-sing writes that the deepening of the slump in China's property market was mainly due to a 25.6% slide in the residential market as noted by the Chinese National Bureau of Statistics. He further adds that the steadfast reports of developers - including China Evergrande - struggling to repay debt have contributed in keeping potential homebuyers at a safe distance from the housing market. A situation further compounded by covid 19 lockdowns putting pressure on household finances.

Another challenge brought about by the covid 19 pandemic as the world gradually gets acquainted with the new norm is decades' high inflation. What initially seemed to be a transitory inflation trend from the American Federal Reserve's point of view is currently a global economic numbers eyesore demanding a series of successive interest rate hikes - the first of which was a 25 basis point increase by the Fed on March 16th, 2022. As the 12th chair of the Federal Reserve, Paul Volcker had to employ high courage mixed with tenacity in combating this rare high level of inflation - even if it meant political attacks and protests. Of Course he did not have to contend with the global repercussions of a Russian invasion of Ukraine during his tenure but he achieved noteworthy success nonetheless. Some observers argue that targeting lower inflation at the expense of household purchasing power is undesirable but unfortunately this is where we are currently. To top it all off the bond markets' yield curve inversion, which is traditionally intepreted by investors as signalling a recession, has recently taken shape. Even though this inversion does not necessarily guarantee an economic recession, Ann Gaggar - Global Investment Strategist for Commonwealth Financial Network - has recently noted that out of the 28 instances since the year 1900 where the yield curve has inverted; in 22 of these episodes a recession has indeed followed.

With all the short to medium term uncertainty brought about by a quick succession of unforseen global events, the technology sector continues to be a beacon of hope for both the future of business and arguably that of humanity. The growing adoption of social audio as part of the evolution of consumer tastes and preferences has had an immense impact on how accurate timeous information on tech developments is dispersed. To elaborate one turns to a www2.deloitte.com blog written by Daniel Sunde-Hansen of the Centre for the Edge in Norway where the introduction tells of how Tyler Crowley, who is described as a startup ecosystem expert, is moulding the future of media through social audio. More precisely his Tech News Around The World Clubhouse chat room which sees a weekday gathering of both tech geeks and opinion leaders who have taken it upon themselves to lead the way forward when it comes to the latest technological developments analyzed by them as having an unavoidable impact on the future of humanity as a whole.

One example which comes to mind is where Tyler has described 2021 as a great year for the Indian technology sector which, according to him, has debuted an impressive and eye opening number of tech unicorns over that period. He has also made mention of the unprecedented power shift from traditional media - owned by the likes of Rupert Murdock - to tech companies such as Facebook (NASDAQ: FB) and TikTok which is currently privately held by the Chinese multinational ByteDance. Tyler has consistently painted a picture of a toxic media space where traditional media outlets rarely miss an opportunity to attack Facebook - which as he describes is due to the latter taking advertising revenue away from institutional media brands and newspapers. A dubious situation where if TikTok is found to have committed the same transgressions which have seen Mark Zuckerburg being called before the American congress for questioning then traditional newspapers somehow do not report on these misdemeanours with as much enthusiasm in comparison to the coverage received by Facebook's wrongdoing. A perilous situation indeed which certainly does not bode well for the future of journalism in the broader traditional media space.