The other day a fax arrived on our machine here in the office that, I think, was not intended for us. But I read it anyway. It was an invitation to attend the 50th birthday party of Joburg’s illustrious mayor. But what caught my eye was the last line, after the bits about when and where the festivities would be held, which stated: “Presents are Welcome”. How refreshing to leave the guest in no doubt about the host’s expectations. Imagine an investment report that ended with the words. “Orders are Welcome”. Instead we drop hints that one should think about accumulating on weakness or sell into strength or similar weak-kneed non-committal phrases. When what we really mean is that we hope that you are impressed by all the work we have done in compiling the report and will reward us accordingly.
The Governor’s decision this week not to change interest rates has also been labelled a cop-out by several sections of the market, especially those who had put together nice little positions that would have scored from a rate cut. Probably the most important reaction has been seen in the rand which may be trying to reverse the softening that it began in the final days of last month. The share market seems unconcerned with what the Reserve Bank is up to, and the All Share index has already scored better this month than it managed in the whole of January. However, the dispersion of performance is very wide with the service sectors taking a bit of a hammering. Resources and goods are doing OK. There’s nothing special happening to financials.
I have just spent a week in the E Cape, where the papers wisely devote little space to financial and business matters beyond the price of pineapples and the outlook for ostrich products. Big news was the fire that destroyed a chunk of Grahamstown’s Church Square. Other impressions gained from a leisurely return trip along the back roads of the country were mainly of population pressures. It is astonishing to see how many new small housing units have popped up in huge sprawling townships alongside the old ones outside every dorp and town. There is clearly a massive shift of people from the country to the town and this must be a significant source of the consumer boom being experienced. Also noteworthy were the number of fresh graves visible in the cemeteries. I am certain that we are not getting true or accurate data about just exactly what is happening to this country’s demographics.
Back home with the Biz Day newspaper my anxiety was deepened by the number of stories that show the rapid encroachment of government’s market-unfriendly and interventionist pronouncements and actions. I was particularly alarmed by the notion that pension funds should not make achieving a high return their top priority. Rather they should support worthy causes, or at least causes deemed worthy by someone else. I was thinking about the reaction of a pensioner on being told that the fund had dried up but not to worry because his cash had been used to “invest” in community projects. Now there’s a fellow for whom presents will most definitely be welcome.
It may almost be time to talk about cricket again.
Keep Well
James Greener
11th February 2005
