One does have to wonder why the Africa Ports
and Harbours Show was held in Sandton instead of in one of the country’s actual
harbour towns. Is our government taking their foolishness about threatened sea
level rises to new heights of ridiculousness?
Suddenly it is abundantly clear why the new mining workers union, AMCU
is attracting members in droves. The leadership there is blissfully innocent of
any arithmetic skills and they share our president’s deep and contemptuous misunderstanding
of economic relationships. On behalf of their members they are demanding that
wages for some categories of worker be increased by 100%. Of course they have
not pointed out that in order to meet that demand, those workers whom the
employers would have to fire would suffer a 100% decline in wages.
The most obvious impact that this sort of combative labour relations
is having on our own small and mysterious corner of the economy, is that Anglo
American has now slipped to only the 8th largest market
capitalisation on the JSE and is now smaller than Sasol, Naspers and MTN.
There is something unsettling about the state’s claim that they have
ferreted out collusion and malfeasance in every corner of the private sector
they have bothered to look into. Certainly most companies singled out by this
perhaps rather arbitrary process have readily agreed sometimes to make very
substantial payments which they naturally insist do not constitute admissions
of guilt. Whether they do that merely to keep the peace or to prevent further
investigations and disclosures is unknown. However, the undeniable attitude of
smugness shown by the authorities responsible makes one wonder if there is not
some form of bounty hunting taking place. Certainly the fines collected seem
never to go to those who were disadvantaged by the alleged crimes.
Talking of substantial sums
brings us to the R2.5million fee required of each firm lodging an application
to run the National Lottery. This comes after those firms have already paid R50
000 each for a copy of the Request for Proposals and attended a two-day
briefing session. The justification for such outrageous amounts lies presumably
in the declaration that the winning bidder gets a contract worth R40 billion. This
is shocking and appalling. While no one will begrudge the operator a reasonable
profit, any monies over and above that should surely go into the Lotto beneficiary’s
fund. And don’t even go into the fine
print about how the National Lottery is guaranteed freedom from competition and
the right to operate a monopoly. Again I am reminded why I try never to buy a
Lotto ticket and instead just take the vastly better odds of picking winning
shares.
Adding to the mining sector’s woes is a rather nasty bear market in
the dollar price of gold. Even after reducing this fall by looking at it
through the lens of the rand dollar exchange rate it is starting to get
worrisome. Isn’t it odd how people all over the world after years of choosing a
hard asset over holding a currency have now suddenly with no obvious trigger
incident or reason changed their minds? One of the biggest bears of the season can
be seen in our SA bond market, where investors using pounds will have taken
losses as large as 25% only half of which can be attributed to the currency. It
will take lot to persuade them to come back one day.
It is one of those winter weekends when the TV couch is going to
take a beating and the remote-pressing thumb will need constant refreshment.
Super Rugby returns to Kings Park but fans are more concerned by the way the
management are still unable to solve the beer ban yet were able swiftly to hand
the coach a shabby dismissal. At
Wimbledon we watch to see who will next manage to trip over the finely mown
grass and from Corsica there is the start of the race to find out whose
pharmacological team can travel the furthest round France on a bicycle without
detection. The Silverstone GP is always fun and not just because the corners
have names not numbers.
James Greener
28th June 2013
