The 23 000 level does now appear to be somewhat of a barrier for the all share index at last. Except that the index is showing reluctance to drop below that number during the current breather period it is taking. Inflation adjusted earnings of the companies in the index are still growing a rate well above 20% pa. This rate of growth is admittedly about a third less than we were seeing at the beginning of the year but it is still highly acceptable and capable of supporting the current prices. This is yet another way that this bear has found to say that his wait for a market correction and great buying opportunities is not yet over. There are still a few days of the month to go and it looks as if October will deliver a total return of around 4%. This is well above the monthly average figure of 1.8%.
And talking of months, what on earth happened to October? I know that I was not at my desk for every possible day recently, since I needed to make some important site visits to fishing waters and game reserves, but it still went by in a flash. The huge glossy advertising leaflets that slip out of the paper every day, increasingly carry a Christmas theme, with pictures of snow covered fir trees and robins and reindeer. As it is currently hotter in Joburg than it was in the Okavango swamps last weekend, this is deeply incongruous. The rains are now worryingly overdue.
A trip to our local garden rubbish dump recently provided me yet another example of irritating pointless government expenditure. Several skips were filled with substantial plastic-covered ring-binders each loaded with a thick “Participants Handbook” of course material for instruction in the “Implementation of Organisational Performance Management in Local Government”. Clearly, someone had failed to perform in their organisation of this conference. Either too few delegates had turned up or too many handbooks were produced. Nevertheless, I’ll bet the catering did not go to waste. Many thanks to the taxpayers.
Taxpayers are in fact playing their part in the game very nicely it turns out. During his mini-budget speech, Minister Manuel confirmed that these generous souls are going to drop off at the National Treasury around R30bn more cash this year than he previously expected. However, the rest of his speech dwelled on what he and his chums in the cabinet have in mind for this loot. It never for a moment crossed his mind that perhaps not confiscating it from the citizens in the first place might be a far better idea. But that’s a socialist for you; always certain that they can allocate resources far better than those who earn them. Just for starters, there are some government folk who have a heap of legal fees to pay. And what about all the signs to Jan Smuts airport, or whatever it is called, that need to be repainted.
I doubt there will be any surprises at next week’s inquiry by the Competition Commission into banking fees. Are they really expecting anyone except the banks themselves to complain that the present fees are not high enough? I predict another few skip-fulls of pointless piles of paper.
I can tell you what is definitely not high enough;- the Protea’s scoring rate. But that’s another sad story.
James Greener
27th October 2006
