This is a fascinating line of business. Change is everything. If it doesn’t change, we are not interested. And when it does change in the way we hadn’t expected we are disgusted. And not only do we watch for things that change we always need to be ready to change the things we watch. Who, for example a few years ago would have known even where to look up Chinese interest rates? Then this week we discovered that the price of money in that country is critical and changing and we should definitely make it a cause for concern, if not stage a mild panic. But the crisis was short-lived. None of us had much idea what it was all about anyway. That’s why we have economists out there to take the full force of the news and to tell us how much to care about it. “Not much”, is the view, and so today, all is calm and the bull is back on board the pedalo, a bottle of something cool in hand. The previous boatman is now back in England.
So that means that there is once again very little to say about this market. This week’s all time high was on Tuesday, just hours before the China syndrome struck, but today we are less than 250 points from doing it again.
The last interest rate hike was foisted upon us in early December. Despite this taking place more than four months ago, it will have had a negligible effect on trading conditions for companies with half-year ends just a few weeks later. These are the only results that have been published so far this year and as already mentioned they were stellar. Currently it is a slow time for company results but in a month or so, we shall begin to see numbers for the period when the higher interest rates might have been making an impact. We will then be able to see if the wicked rumours about stock build ups (particularly in the car market) have any foundation. Thanks to the accountants (who according to the Biz Day report are sitting on top of SA’s company pile (?)), any earnings declines will be neatly camouflaged in a blizzard of figures and huge efforts will be made to maintain and grow dividends for a while. It could even take another round of results in say August and September before the truths emerge. This is not to suggest that there are necessarily any to emerge, but merely to highlight the potentially long hiatus between events and evidence.
Our ever-caring government has now decreed that textile goods will in future carry labels many times larger than some of garments they will be attached to. Astonishingly, they believe that despite the disgracefully low levels of literacy in the land, consumers need more than just the price and their experience to choose a T-shirt. Perhaps this regulation will end the fashion of prominent display of the label on one’s clothing. In future, it will have to show Calvin Klein or Gucci’s date and place of birth and as well as the qualifications of the fellow who unpacked the box the item came in. Uncool!
As you hack at the little plastic loop that joins the ten-page CV of the sheep who provided the wool, with your new pair of socks, give a thought for the “Development of a General Waste Minimisation Plan for Gauteng” that our old friends at GDACE have begun work on. Please eat the label; don’t throw it away; we need less waste.
And I have managed to avoid also any mention of sport. Isn’t that what you have come to expect from the Illovo bear? Late thought: Is it OK if the Made in SA label is itself made in China?
James Greener
20th April 2007
