It may have felt as if this week’s market moves were especially hazardous, but as is often the case, the facts can ruin a good story. The All Share index has since Monday spanned a range of just 344 points; historically this is not a large weekly range. What has of course exacerbated our perceptions that the market has been hairy is the substantially weaker rand. Our mighty currency has lost more than 5% against the dollar and 3% against sterling since last week, before the boys from Barclays said they wished to spend R33bn on buying ABSA. The news that the currency had already been sorted out in a private chat with the SARB and the aside from one of the deputy governors that the rand really was way too strong were the obvious triggers for a spot of selling. But what really puzzles and pains the pundits is that the market has tended to go weaker along with the currency. Nevetheless, so far in May we have managed to recover almost half the losses suffered in the period from the peak levels set during the March close-out to the end of April.
It bears repeating that Africa is not for sissies.
In looking for some light relief from what felt like a torrid market you will have seen the news that one of Cell C’s Black Empowerment shareholders sadly can’t find all the money they need. A big chunk of their allocation might therefore be offered to a Saudi company which, presumably, does have the cash. Do they, these new investors from the deserts of Arabia, have sufficient melanin to satisfy Cell C’s required shareholder demographic? In the bad old days there was a deeply embarrassing and offensive board of bureaucrats who passed judgement on personal features and subsequent classification. Has it been resurrected?
I was delighted to accept an invitation to chat to a small investment club this week. It is always fun and fascinating to meet the people who are actually battling with the challenge of where to invest their own money. They usually provide totally unexpected insights that have been missed by the professionals. For example this group of ladies were distinctly lukewarm to the idea that NuClicks might be offering value because, they said, the shops were dreadful to go into. This is true.
The Goldfields / Harmony saga does appear to be getting towards the end with the sole winners being the advisors and advertisers and publishers who have waged the battle in the pages of the newspapers. However, as it seems unlikely that the deal will be consummated, the advisors will then miss out on the final juicy plum, a development that has the whole nation weeping in pity for them. They’ll now just have to go and try to arrange the next marriage between a local bank and a foreign suitor, Rumours abound.
There will not be a Tidemarks next week. I plan to be visiting sites for a possible coastal branch office for the household. Requirements? Within casting distance of a decent rock gully and within walking distance of a pleasant public house. Pleasant, however, does not describe the reception the Stormers can expect at Loftus tomorrow. A last minute hat-trick by them will not be popular.
James Greener
13th May 2005
