When will it dawn upon these evil and nasty politicians that the power that they think they have is really quite illusionary? They can strut and posture and proclaim and pontificate about changing names, selecting teams, permitting work and other similar annoying matters, but in the end 5.5bn US dollars beats all. A man from China clutching wads of actual real cash gets everyone’s attention and BEE loses out to CEE. Two of the speakers at the Standard Bank press conference that announced the 20% acquisition by the Industrial and Commercial Bank of China of the country’s largest bank are old boys of my own school. I wonder if Cantonese will not soon be compulsory in those dusty Eastern Cape classrooms?
You can be sure that this latest move by the smart and rich Chinese to gain a further foothold in Africa has nothing to do with them wanting to redress any legacies of colonialism or ensuring the furtherance of human rights. It’s the minerals they are after and I doubt they will be keen supporters of the idea that a mine should be closed after each fatal accident until blame has been apportioned. As I understand their approach, workers have work not rights. Our lives here on the dark continent are going to change.
It has been customary to describe large sums of money as being in the category of telephone numbers. However, not even the recent addition of the area code digits to our numbers has made them large enough to describe the losses that are being reported by the financial market giants. Despite many of them claiming that either a) they had only minimal exposure to the calamity of the sub-prime loans market or b) the debacle was of small importance and well-contained, all has not been well! Wealth has been wasted by the wagon load and lenders are wondering how many other euphemisms for “the money has gone” are lying in wait.
It is widely presumed that next week, Governor Bernanke is going to try and alleviate the woes in the US that are arising from people being unable to pay their debts. To do this he will probably drop interest rates. Unfortunately for him this will probably also cause the dollar to weaken further and also discourage foreign investors from putting their savings into American instruments. The phrase “viscous spiral” springs to mind.
A few weeks ago, I described the rand as a runt. Naturally that runt has grown up into the pick of the litter and has sunk its teeth into my leg. It is at two-year highs against many major currencies and the so-called rand-hedge shares are under pressure. I have no idea why economists are listed together with jewellery designers, electricians and maths teachers as some of the 53 categories of scarce-skills who can fast track the work permit system. You could hire pretty well anyone to make a forecast that will turn out wrong.
Even though the JSE thinks that tonight marks the end of October and the official portfolio valuations will be printed over the weekend, Halloween is still three trading days away. This leaves plenty of time for the All Share index to slide below the 30 000 level and turn the month’s performance into a negative number. There still seems to be no news either good or bad enough to cause the buyers to run for cover. Everyone wants stock and obligingly the list of new companies (coming mostly to the Alt-X board) is not growing shorter. Some of these issues are ludicrously small and terrifyingly oversubscribed and some have failed to surge on listing. I think this is alarming news, but then what do I know?
I do know that the ‘bokke are deserved world champions and that the Lions will lift the Curry Cup this weekend.
James Greener
26th October 2007
