It is all quite confusing for an old scientist. It seems that I no longer have a provincial side to support but a “franchise”. Now I always thought that franchises had something to do with battered chicken and a certain colonel from Kentucky but it seems that I am mistaken. These franchise thingies are everywhere. I waltzed off to Wanderers on Wednesday to watch the charity cricket match between what I thought was Transvaal (or even southern Gauteng) and the rest of SA. What I saw was the rainbow nation and very little cricket. The rest of SA players were decked out each in their own franchise set of pyjamas. Very colourful but I was alarmed at how many of the fellows were proclaiming themselves to be Titans. The standard of the cricket didn’t support that! The tour to India could be painful. And on TV last night an assembly of rugby pundits were less that certain that the ’bokke will pummel the Irish tomorrow.
But to return to the battered chicken. That pretty well describes the look and feel of any remaining bears in this market. Outstanding results from most consumer companies continued to fill the press this week. There is no longer any point in asking plaintively where all the money is coming from. Just take a walk through your local mall this weekend and observe our fellow citizens going for gold in the shopping leagues. I’m told that SAB are going at full speed on all their bottling lines and in some places not keeping up with demand. Of course this rather alarming drought and heat wave will have a large part to play in that particular market. Isn’t it infuriating that ABI (the bottler and distributor of Coca-Cola) is being taken off the JSE boards?
The FirstRand preference share debuted on those boards this week at the really quite generous price of 10300 cps. This implies a dividend yield of just more than 7.25% and makes it the cheapest of the big four bank prefs. The markets are certainly not thinking of the holidays yet. Several interesting developments are taking place including the Harmony / Gold Fields tussle that must be providing a very nice little Christmas present for the advisors and media compiling and printing the ever more acerbic salvos from the two sides. The disposal by the quaintly named Thintana consortium of their chunky stake in Telkom has also generated some fire but little warmth unless, of course, you were one of the happy beneficiaries.
As expected, on Wednesday, the US raised their Fed Funds interest rate by 25bps to 2%. This excited the Wall Street bulls but surprisingly (for some) failed to stop the dollar sagging to a record low of 1.3 per euro. I just love reading the complaints on the US websites of how expensive Europe has become for a trip by the people from the land of the free. However, do not gloat too much as there was a report out this week saying that our own Herculean rand is deterring overseas visitors! Does this mean sensible prices for a meal in Cape Town this festive season? Hmmm. Probably not.
Downside of the week for me has been the number of criminal incidents that took place in and around my friends and colleagues. Thankfully no physical injuries have been inflicted but there is a definite increase in these utterly dreadful shocking and disturbing incidents. Please keep aware and safe this weekend.
James Greener
12th November 2004
