PRIVATE SECTOR VIEW ON BEE

ABEL SITHOLE

EXECUTIVE DIRECTOR: METROPOLITAN

19 May 2003

The investments market

JSE Equities Market Cap – R1300 billion

JSE Bond Market Cap – R 356 billion

TOTAL OVER R1600 BILLION

Sources: I-Net Bridge,Alexander Forbes & UP Unit Trusts Survey ALSI: 16/05/03, ALBI 31/03/03; RF- Dec 02; UT – 31/03/03; TI – 31/03/03

Sources: I-Net Bridge,Alexander Forbes & UP Unit Trusts Survey ALSI: 16/05/03, ALBI 31/03/03; RF- Dec 02; UT – 31/03/03; TI – 31/03/03

The investments market

Retirement Funds – R1 100 billion

Unit Trusts – R 172 billion

Targeted Investments – R 9 billion

TOTAL OVER R1280 BILLION

Source: Empowerdex Empowerment Watch Survey of JSE listed companies 2002

IS THERE STILL A NEED FOR BEE?

Main occupational groups

Af rican Coloured I ndian White

Elementary 26% 34% 7% 4%

Art isan 47% 38% 31% 29%

Clerk 16% 15% 25% 17%

Mngr/ Prof 11% 14% 37% 50%

Source: Census ‘96

Focus on employment equityand skills develpment

Employment

Equity

Skills

Development

I nvestment

Companies >20% >20%

Banks 60% 20 - 25%

Specialty &

Other 20% 1%

I nsurance 20% 20 - 25%

Real Estate 0% 0%

Source: Census ‘96

Is there still a need for bee?

Yes

No commitment to change

Progress made minimal

The definitions

Black companies

Companies 50.1% owned

Black empowered companies

Companies 25% - 50% owned

Black influenced companies

Companies 5% - 25% owned

Financial services companieslisted on the jse 2002

1

7

13

27

0 5 10 15 20 25 30

Lack of Black Ownershipand Control

Black Influenced

Black Empowered

Black Owned

Number of Companies - December 2002

Source: Empowerdex empowerdex watchBroad based economic empowerment survey of JSE listed companies 2002

Measures of empowerment

Empowerdex

Pillars

Ownership

Management and Control

Employment Equity

Skills Development

Preferential Procurement

Enterprise Development

Corporate Social Investment

Source: Empowerdex empowerdex watchBroad based economic empowerment survey of JSE listed companies 2002

Owned by Metropolitan

Measures of empowerment

Empowerment Barometer

Pillars

Employment Equity

Procurement

Corporate Social Involvement

Skills Development

Control (shareholding and directors)

Empowerment Culture

Progress made

Common trends

Pioneering Deals

Few black shareholders

Cons: ‘empowerment at holding levels did not filter

through’

Middle children

Union shareholders, through union investment companies

Cons: ‘complicated funding structures led to loss of

investments’

Common trends

Today

Few black shareholders

Are we repeating past mistakes?

If yes, why?

If not, how are we different?

Scorecard

Common Pillars

Ownership

Management and Control

Employment Equity

Skills Development

(Preferential) Procurement

Corporate Social Investment

?

?

Who’s responsibility?

Private Sector

Government

All other stakeholders

Retirement fund trustees

Society

Way forward…

Financial sector bee charter

Background

Low levels of black participation in sector

Ownership

Control

Skills

Management

Sector dominance by large institutions

Inadequate response by sector to demand for financial

services

Who’s responsibility?

Together we can

THANK YOU