It’s gone ominously quiet and steady.
Even the rand has found some buyers – although it might just be the tourists
who have appeared in great numbers delighting in fine dining for less than 10
units per head of their own currency. After a nerve-testing plunge of 6%
off the January peak the All Share index has scrambled back a
little to around 45 000. This was a level it first breached in October, which
sort of demonstrates the bounciness being experienced as the market tries to
decide if this is the end of the bull or not. Frankly there is little news or
data around anywhere that makes one confident that businesses are going to be
able to report substantially better earnings than they achieved last year.
While this does not automatically mean a sell off – there are not many
alternatives to owning a share in a well run company that has a solid customer
base – perhaps investors are not going to be prepared to pay more than they did
last year and prices might stop going up.
In the meantime our government continues
to extend its malign and value-destroying tentacles into the wealth creating
private sector. Yet again a minister has told the banks that their money
lending practices and policies are all wrong and that a raft of instructions
from the government on how to run a bank is on its way. Another minister is
busy meddling in the fishing industry while ignoring that part of her job which
tries to ensure that whoever is doing the job at least has something to catch. Then
the minister in charge of mining stands up on the stage and tells the world
that the sector is doing fine – a claim seriously at variance with the facts
all around her. And over at the health department, where they are hell-bent of
banning liquor advertising, they have moved their sights on to sugar which
someone has told them is a very bad thing and ought to be taxed. Do these guys
and girls even read the speeches they deliver? If they do then that is surely
evidence that they have scant understanding of the content.
This week the government announced that
it is looking at the feasibility of selling “social impact bonds” to raise
money for projects involving small businesses and job creation. Investors will
be repaid with a return that will be calculated on the savings achieved as a
result of the project’s success. At the risk of being once again labelled
overly bearish, this looks like a poor investment. Similar to the “Green Bonds”,
that the mayor of Johannesburg
told a conference of global bigwigs gathered in his city, that he is hoping to
issue. In my experience any bond that purports to be raising money for a “good
cause” is simply expecting investors to accept a lower rate of return than a
similar bond without that cachet. This may appeal to some lenders but not this
one.
Good news is that the presidential
hotline is now resolving 94% of the cases referred to it by members of the
public. This is three times higher than it was scoring in 2009 when it was
established. This is undoubtedly
commendable news but there are several questions that need answers before
getting too excited. Who knew that this facility was still available? What sort
of questions is not being answered successfully? Have the difficult questioners
just given up? Is the president embarrassed by the rather modest proceeds of
Nelson Mandela’s estate when compared to the wealth he has accumulated from the
taxpayer? What does the president regard as his greatest achievements while in
office?
The Winter Olympics open in Sochi today amidst
accusations of corruption, incompetence and being unprepared. In the end all that needs to happen is that
the athletes who have trained for four years are given the facilities and
opportunities to deliver their best performance against worthy competitors in
front of unbiased and honest judges. May
they have the successes they deserve even if the rest of us can’t see the point
of sliding rocks on ice or hurtling into space with planks strapped to our
feet. PS. Where exactly is Sochi?
James Greener
Friday 7th February 2014
