Friday, 29 August 2014


For a moment it felt as if August might actually see the appearance of a large and fierce bear. However, the All Share will close today probably only half a percent down on the month. Most of the damage was caused by the platinum mines and the so-called mining houses. Investors are alarmed by the clear signs that most of these enterprises are arranging their affairs to minimise the often lethal and frequently energy-sapping effects of South African state interference in their industry. On the bull side, the telecommunication sectors, both fixed line and mobile, enjoyed a wonderful month. The banks largely survived the obliteration of one of their number. Bears will just have to wait some more.
For all the apparent domestic problems in that land it seems as if the rest of the world is regaining confidence in the idea that the USA offers a safe haven for their money. The dollar is at a one year high against the euro, the yield on the US 10 year bond is sliding ever lower also to a one year record. Wall Street indices are sniffing all time highs. Money is obviously being sent out West as extremism and intolerance sweeps the planet.
After all, what can be wrong with a nation whose president spends so much time on the golf course and where the national pastime would seem to be emptying buckets of icy water over each other? Americans clearly have very little to worry about.
A bunch of MPs behaved rather badly in the National Assembly last week and the Speaker has written them each a letter inviting them to explain why they should not be suspended. Surely Madam Speaker has no illusions about what sort of replies she will receive and indeed already threats of court action are flying about. The next stage apparently is that an investigation will be mounted. It is all rather wonderfully courteous and old world. Possibly even colonial. Horrors.
The irony of the whole mess is delightful and endless. The chant of “Pay back the money.” has quickly become a mantra with widespread application. President Zuma missed a trick when he should have used it back against the leader of the noisy bunch who himself is reportedly catching up with his tax shortfall by making regular payments which, puzzlingly, are considerably greater than his monthly parliamentarian’s salary. So far, no one has yet used the phrase against the Chief of the Defence Force General Solly Shoke, who rather understandably failed to resist the temptation of booking himself into one of the ultra luxurious first class cabins aboard a flight to the Far East. After all if the airlines offer these facilities who else but high ranking government employees can afford to use them? And it was a terribly important meeting he was going to.
The big problem with that sort of consumption expenditure though, is that not even the most skilled spokesman can convert it into that universal currency of “jobs created”. Here in the kingdom, a proposal to place a 10% levy on the tourism industry was expressed in units of job creation in order to fend off criticism. The money will apparently be used to fund a project of enticing and inviting grand and prestigious events to use this eastern coast as a venue. The idea has all the hallmarks of bureaucratic ignorance of how the real world works.
By some sleight of hand, Stats SA produced the positive second quarter growth rate result that was needed to avoid the first half of 2014 being declared an official recession. Like the ‘bokke results against Argentina it was not a pretty thing but enabled the responsible officials to preen a little and claim that the things will improve “going forward”. However, that ODI win by the Proteas over Australia was highly satisfactory.
James Greener
29th August 2014