So the rolling blackouts have resumed.
Eskom, who prefer the term “load shedding” has been muttering something about
damp coal but it must surely be more than that. However, the prospect of the
country having insufficient electricity for everyone all the time has caused
great optimism amongst the bulls who have been bidding with ever increasing
prices for what some of us think might in fact be lower earnings as a result of
the lack of electricity. The All Share index has soared to within a whisker of
48 000, which means it has gained 10 000 points in 8 months. The greatest
contributor to this performance has come from the financial sector. Perhaps it is
thought that it will be the banks that will make the most money with higher
interest rates then.
Related to the Eskom issue is the news
that Chancellor House has sold its stake in Hitachi for R50m. It paid just R6m for this
holding 8 years ago. That’s a very acceptable capital gain of R44m. Shortly
after the investment was made, Hitachi
was awarded a major contract in the construction for Eskom of two desperately
needed power stations. The contractor has reportedly failed to deliver
satisfactory work on time and budget and so perhaps few, if any, dividends were
paid in the last few years. The capital profit is therefore very welcome to the
investor even if the presumed absence of earnings growth makes it hard to
figure out how the valuation of the holding could have soared so dramatically.
Readers may not need to be reminded that this investor is the so-called “investment
arm” of the ANC. The money after capital gains tax of course will come in very
handy with an election coming up. It has not been mentioned if Hitachi are now again looking for a
replacement Black Empowerment partner. Surely they can’t afford another one.
Rather quietly and without anyone
noticing much, the various global indices that reflect the cost of commodities
like food, fuel and minerals are rising quite sharply. Some of this will be due
to the softening dollar perhaps but these are very discomforting moves for
consumers. After so many years when the inflation monster looked as if it had
lost some of its teeth, government policies designed to avert deflation at all
costs might just be having some effect.
Mark Zuckerberg, the multi-billionaire
developer of Facebook, must be very grateful that he never tried to pursue a
career of being a provisional liquidator practitioner in South Africa –
assuming of course that he has even heard of either the job or the country. The
government department that appoints such people has added another bizarre layer
to the supremely racist and sexist criteria that it applies in appointing
candidates to these posts. White males will be considered for only every tenth
vacancy and then only in alphabetical order. Doubtless numerous real applicants
named van der Merwe, van der Walt or even Zille are learning that their country
doesn’t want them. It’s a massive tragedy.
Feelings may run a little high at the
bowling club this evening when I wear my new Sharks shirt as well as my old
Lions cap. This rather despicable display of perfidiousness is going to be
impossible to explain and maybe I shall lie low until the weekend is over. Even
if the Proteas had lasted for a further 27 balls, we would all have known that a
draw was not the result we needed against Australia. And that same night
Bafana, the soccer ‘boks, let in 5 goals and scored none versus Brazil. The
only good news on the cricket front is the magnificent performance of the under
19 squad who are now the proud holders of the World Cup for that age group.
Some of those lads had better keep their cell phones charged and close to
themselves as the forthcoming T20 series with the Aussies unfolds. It’s a funny
game, cricket.
James Greener
7th March 2014
