It is always
puzzling how easily professional investors can handle losing other people’s
money. A company which a few years ago borrowed almost R1bn by issuing a bond
has gone bang. Investors in this bond included some of the smarter investment
houses in the land and they are now dismissing the default, claiming that it
will have no effect on their investments. If that was true then why did they
buy it in the first place?
Any member
of the JSE (today that means firms not people) that is rich enough will soon be
able to rent space immediately alongside the JSE’s own computer. The proximity
means that these firms will get JSE prices and information milliseconds before
someone like me down here in the kingdom. This clearly highlights that the market
is less about raising capital and more about providing a casino-like
environment for speculators, traders and their computer programs. Undeniably
there are ultra short term price discrepancies and movements that can offer
profitable trades. Whether these are triggered by news released publicly or
hinted at privately does not matter but it does show that while “insider
trading” is considered a no-no then “just next door trading” is just fine!
There is some very muddled thinking happening here.
It turns out
that tax payers, via an outfit called the National Empowerment Fund, have lent
R34million to someone planning to open a shop that will sell luxury goods. The
new store owner obviously knows all about her market. Just a day or two later
the New World Wealth consultancy released its report that there are nearly 50
000 dollar millionaires in the country
half of whom live close to this boutique. I wonder if she would consider
operating a loyalty program offering discounts to any customers who can produce
an income tax receipt. Mind you according to SARS there are far fewer top tier
tax payers than this. Nevertheless the entrepreneur’s track record leads one to
think that it’s going to be a far less risky use of public money than funding
the Gauteng Climate Innovation Centre, which proudly wants to “help South Africa
reach its potential in climate technologies”. Once again the bureaucrats are
confident that they have spotted opportunities where the market has not. And
anyway don’t the Chinese make raincoats and sun umbrellas all so much cheaper?
South
African members of parliament get a salary which, relative to the average
income of the rest of the nation, ranks them as among the 5 highest paid in the
world. Sadly we do not receive value for this expenditure. Here in the kingdom
one of their number has dusted off the idea of installing a cable way to whisk
tourists to the top of the Drakensberg. Then there's the plan to "fast
track" pilots to fly the national airline’s great big passenger jets. Not
to mention allowing the SABC to launch a 24 hour news service channel. What
about reducing the state payroll by firing the cops with criminal records and
the 25% of teachers who don’t work on Mondays!
Isn't that
sweet? Our president was invited to come and collect his new smart ID card the
other day and was introduced to the four machines that have been acquired to
print these things. He immediately named each of them after a woman. Despite
his age there is no doubting where his main interest lies.
The natural
order of things has been restored and the Lions are back in the Super 15 for
next year. However all is not lost for the good folk of Port Elizabeth. The Spanish fashion chain
Zara has chosen their city as only the fourth in SA in which to open one of
their trendy shops. The people of the Bay can go and swap those uncomfortable
crowns for more stylish berets and other smart gear. The Eastern Cape in not just about pineapples
and sheep you know. Some of those millionaires are lurking among the spekboom
and aloes.
James Greener
The day before Women’s Day 2013
