If this letter were to be any use at all, it would list the shares which will next week go up as well as those which will go down. Last Friday I ran out of space before advising you sell Billiton, Sasol and Anglo and put the money into Richemont, Standard Bank and Impala. I hope in this letter that I remember to insert my calls before the 550 words are up.
The market was more placid these last few days, with the largest daily range in the All Share index occurring on Wednesday when there appeared to be some month-end manipulation being attempted. No clear trend has yet emerged, however, and there is a furious tussle for control of the market taking place between the bull and the bear. There are opportunities popping up here and there (witness the list in the previous paragraph) but success is granted only to those with nimble fingers, great vigilance and excellent market intelligence. Physical fitness and stamina will be useful as well.
If, like me, you find these last two hard to achieve than you will also be interested in the search being undertaken by the Gauteng Local Government for someone who can “provide Comprehensive Health & Fitness to the Members of the GSSC”. Presumably, these “members” are the same people who have allowed outstanding rates and taxes in the province to now reach R17.5 bn. But tax payers who object to stumping up for the bureaucrats to burn off some of the calories ingested at the never ending round of receptions and report-backs are just being miserly. Probably these same folk are also moaning about the official contingent of 150 people who are off to Germany to get ideas on how to run a World Cup. Hopefully the party will include at least one person who will learn how to get the national side into the tournament.
The National Credit Regulator opened his doors yesterday, but his job is not to see that the government doesn’t borrow too much money but rather that private sector lenders and borrowers understand and love each other. This sounds to be a dubious proposition and I wonder about phrases like “credit providers have to ensure they have documentary proof that the consumer can afford the loan at the time of application.” Once again, the state is calling for an avalanche of paperwork, not one page of which will make it cheaper and simpler for the age-old wheels of finance and commerce to turn. The irony behind much of this rush to establish each other’s identity, parentage and place of residence is that the requested verifying documents are increasingly being produced neither accurately nor timeously by the same organs of the state that are demanding them. What’s the delay for a new passport these days?
Investors looking for something to fret about will have noted that we are approaching the season for interest rate meetings both here and in the US. June also sees the arrival of a futures close-out event on the JSE. Whether any financial event will have any impact as June unfolds is doubtful. Employers world-wide are accepting that productivity will plummet as the workforce settles down in front of the TV. Pizza and beer suppliers are my pick for the month. Go short the gyms. And watch for Telkom’s results. Monopolies rule OK.
James Greener
2nd June 2006
