Browsing through the charts and numbers
this week, one gets the feel of something is stirring. Among the more
impressive movers are those depicting the weakness of the rand and local bond
market. Both have taken a hammering and one could conclude that foreigners are
departing from the latter The JSE All Share, on the other hand seems to have
calmed down at the 43000 point level where, in contrast to many developed
markets, it is exploring all time highs. It is also the sole member of the
BRICS club with a market that is up for the year to date. There has been some
sort of BRICS knees-up on our wintry shores this week, with photo opportunities
and appropriately themed catered events all round. Now at least India and Brazil are each suffering similar difficulties
to us with their currencies. So it is not certain, when the talking began
behind closed doors, just who was shaking the biggest slotted tin and offering
the brightest buttonhole. Our guys might have been quite startled to learn that
joint means every one putting up the money when called upon.
Meanwhile anyone who thinks that
international economics and finance is boring should take a look at the
delightful squabble that has broken out about whether or not China is in
trouble and if so what it means to the rest of us. The starting point for the
full enjoyment of this spectacle is to realise that just about all economic
data is imperfect, massaged and misleading. The Chinese (like much of the rest
of the world) are keen to focus everyone’s attention only on the numbers which
tell the better story. Anyone reaching a conclusion drawn from their
interpretation of the data is in the end standing on the same very shaky
foundation as their opponent. Each claims that specialist local knowledge
bolsters their position. However it is rare for any particularly dogmatic and
eye-catching forecast to survive the onslaught of subsequent data releases –
especially when they are accompanied by substantial revisions to what has come
before. If treated properly it is high comedy but makes share selection tricky.
The promise to hold a land ownership
audit sadly reveals that we are still not in the position where the nation’s existing
land registries can provide that sort of data at the click of a mouse. And as Hernando
de Soto, the
Peruvian economist notes, people with title, even to the meanest plot on which
their shack stands, can borrow money and upgrade their homes. That way lies
growth and job creation. Just think what 20 million new DIY market entrants
could do.
A special local weather pattern announces
itself with a steady and large fall in the barometer accompanied by
unseasonable heat throughout the day. Then, suddenly after a brief spell of
utter calm at about the time of the first beer of the evening, a ferocious wind
squall blasts through from the south west, scattering the prematurely deployed
garden furniture and slamming doors left open. The phenomenon is known as a
Busta and that's pretty apt. It also strikes me as a fair model for what might
be happening in the share market. Does anyone else feel the calm?
Even if tennis star Maria Sharapova fails
in her wonderfully cunning stunt to take on the name of her newly launched
confectionary brand for the duration of the US Open, already the publicity has
been magnificent. Which man on this planet is not keen to unwrap a Sugarpova
and pop the red kissing lips themed sweetie into his mouth?
The Lions are going about reclaiming the
Currie Cup the very hard way aren’t they. While the ‘bokke are raising what I
trust are not inflated hopes.
James Greener
The start of my August long weekend.
