The All Share index so very nearly
reached 50 000 this week. It backed off with just points to spare. But it
wasn’t a particularly convincing advance as it relied on the heroics of just a
handful of shares which did all the work. Chief contributor was Naspers, which
at a market cap of R470bn is these days the sixth largest company on the JSE. It
has been a wonderful ride for the shareholders and there is really no way of
forecasting where it might end as attempts to apply all the conventional
valuation metrics to this company have long since been trashed. However, the
fact that the advance by the index has no depth is worth noting.
There is definitely something stirring in
the investment world. The US
ten year bond yield plunged sharply back down to 2.5% this week. Numerous
reasons have been offered for why investors feel that lending to the US government
at this paper thin return is the best they can do with their money, one of
which is that there has been a rash of predictions that Wall Street is on the
point of collapse. No one knows, but remember to sell those speculative punts
before they become unwanted long term investments.
For those who care, there are lists of
the potentially market-moving events and announcements and the times when they
are due. Among my favourites is the monthly US Housing Starts statistic, a
surprisingly large number given that one would think that almost everyone in
the US
must have a home by now. To be useful it ought to be accompanied by a housing
ends figure reflecting amongst other causes, those horrific tornados which
demolish a house in seconds. (Why don’t they build brick houses in storm prone
areas?). Anyway next week our own Reserve Bank Governor Marcus gets her few
seconds of TV time when she will announce the Monetary Policy Committee
decision on interest rates. Given that the majority of other recent
announcements have pointed to an economy in trouble, the expectation is that
she will not have much to say.
When the JSE rescinded its long-standing
requirement that listed companies publish their results and notices in both an
English and an Afrikaans daily newspaper, most companies happily stopped doing
so. The reasons and motivation for this JSE decision deserve an article all its
own, but it is interesting to see that several companies have returned to the
print media. For all interested parties including even the most tech connected
institutional analyst there is nothing to beat a well laid out set of
financials on a newspaper page. This is a welcome development and all
shareholders and analysts are surely very grateful to the companies that do so
and are probably curiously suspicious of those that do not.
Maybe not as many folk as expected will
accept their invitations to attend the R120m presidential inauguration bash
next weekend. In this age of austerity the organizers have severely trimmed the
list of thirst quenchers available to guests. Only Peroni water (what's that?),
Black Label beer, Johnny Walker Black whisky and Lagavulin single malt will be
available. Only South African wines will accompany the lunch and are to cost no
more than R300 a bottle. No mention of Klipdrift brandy or Cane spirit for the
old South Africans. It’s going to be tough especially for the 25 MPs belonging
to the country’s newest political party. Their leader, Julius, has a well
documented taste for the finer things in life. Although if he and his team turn
up in hard hats and red overalls as they plan to do for parliament, they may be
refused entry. Suddenly there’s a reason for watching the show on TV. Even the
SABC couldn’t avoid filming a decent punch up. It’s hardly ever boring in South Africa.
In a further step in the deeply
disturbing trend of making our possessions cleverer than we are comes the news
of a smart tennis racquet which will offer analysis and criticism of your game.
I can’t wait until someone fits a gizmo into Bismark’s shoulder pads which complains
if he doesn’t scrum straight. Mind you, some of the refs need a pair of those
smart Google glasses to help them spot a forward pass!
James Greener
16th May 2014
