The market must have employed one of those exciting teams of so-called event co-ordinators. You know – a good looking young woman or perhaps a slightly scruffy young man who plans and manages a function so that it achieves maximum impact for all concerned. The recent weeks have been marked by plenty of noise and fireworks. The biggest bang has been perhaps the dollar gold price, setting what I heard called a “generational high”. Presumably this is a time unit longer than a “multi-year”, but shorter than an “all-time” or even a “since records began”. In rand terms the gold price is at merely a three year peak thanks to the rand which looks determined not to try on the “7 to the dollar” big figure.
No less diverting and entertaining have been the cautionary notices, big fat rumours, wild guesses and red herrings that have swirling around as the silly seasons gets into gear. In particular, following the Vodaphone / Venfin offer, the other telecoms listings have been basking in the spotlight of speculation, with Telkom itself being characteristically inept at handling the issues. Looming largest amongst the idle chat is the thought that just about every good company left on the JSE boards is the target of a takeover. While I am sure that is an unlikely scenario, it is certainly true, that in the last few year many choice companies have disappeared from the JSE. And I am not too excited by some of the new offerings that include, for example, a secondary listing for a Nigerian oil company.
It is also reporting season and with few exceptions the earnings growth numbers that crowd the pages of the newspaper look spectacular. Today, for example, there’s the Mr Price clothing store chain boasting of 54% growth. Faithful readers know that my total ignorance of the alchemy of accounting make me wary of this sort of claim and when the experts warn that the new accounting standards will “shock investors” I feel justified in my fears. However, when the earnings are accompanied by chunky dividends then I feel much happier. Less enjoyable, however, are when the distributions are labelled as “capital repayments”, as these are not tax-exempt in the hands of the recipient and cause all kinds of hassles when the time comes to fill in one’s tax return. Of course the outrageous share confiscations that have become so popular amongst the companies who are setting up black empowerment deals also raise a number of tax complications for the losing shareholders.
Despite all the good news, the All Share index has not been a one way journey this week and has settled down somewhat. Because I am tapping this out early in the day before popping down to Ficksburg and its Cherry Festival I shall avoid the temptation to interpret this hesitation as a turnaround. Who knows what will happen later.
I hope to find a TV in amongst all those cherries to watch the ‘bokke face Wales. And of course there’s the ODI in Bangalore. The other reason to be out of town this weekend is that about a million cyclists will close down the throughways of the city on Sunday as they try to pedal as many kilometres as a local radio station has megahertz. That’s 94.7 of them. Good luck to all.
James Greener
18th November 2005
