Bastille day. The French are everywhere these days. Bike races, football and tennis champions, grands prix, head butting; it’s all happening for them. But soon the spotlight will move on to our southern tip. SA’s preparation for our own world cup tournament in four years time is reportedly much further along than were the previous hosts at the same point. We have a logo. We have chosen which cities will be used to stage the games Was the selection all that tricky? AND we have negotiated the sponsors and discussed the dreadful crime of ambush marketing with them. As was the case when the cricket shindig was here, spectators can expect to have their persons and parcels frisked for the slightest sign of scorn for the supreme sponsor. Woe betide anyone who dares display the banned brands. I can’t wait to see who will get the job of explaining to a stadium of thirsty Black Label consumers that only Bud Lite is on sale.
That will be worse than explaining to the perma-bears like myself that whatever the oil price, wherever the wars are and whoever is in charge, this market just wants to keep on going up. Sure, there have been a couple of scary down-days when some punters have felt the bear’s breath on their necks. But after each of those sessions, the buyers swarm in, and most prices edge back up. One sector, however, worries me more than the rest. I have often commented on the waves of interference and regulation that keep on crashing onto the shores of the financial sector. Today we had the latest foam- crested breaker, when no less than the Registrar of Banks made free with advice on how the banks should run their boards of directors. The fact that last year he warned them that the good times were over (prematurely as it turned out) and they should brace themselves, reveals that he has little confidence in his customers running their businesses correctly.
I have also noticed that the industrial share earnings base is now not growing at anywhere the rate it was enjoying just this time last year when companies were boasting of at least 40%pa increases in profits. Now the growth rate is down to just 15%pa. This is of course still a very tidy number. Most of us would be very pleased if our own annual incomes were improving like that. However, the market prefers rising growth rates; so if the forthcoming season of result announcements does not reverse the trend, the price reactions will be worth following.
And yes, I did have a wonderful trip to the arts festival. I managed to avoid those plays where deeply committed actors shout insults and abuse at the (paying) audience and accuse them of being responsible for all the suffering that has and will happen in the evil society we live in. Instead, I enjoyed a lot of music from ABBA to ZZ Top by way of Mozart and Bach. And there was a trip to the Blaaukrantz Bridge where, almost 100 years ago, of one of the country’s worst rail disasters took place. It was disappointing to learn that, even then, brigands appeared on the scene and looted the belongings of the victims and the rescuers.
And talking of victims, who will be brave enough to watch the scenes from Brisbane at noon tomorrow?
James Greener
14th July 2006
