Friday, 12 December 2014


The All Share index started off the year with a triumphant and dramatic surge through the 46 000 level. It peaked out seven months later at just over 52 000 and then pleased and teased the bears by plunging back to the opening value in mid October before bouncing back considerably. That bounce may however be running out of steam and it would take a mere 2000 point drop in the next fortnight for the index to end down on the year. This would be sad but not unexpected.  A great many ducks are standing just too far out of line for any reasonable arguments for a bull market to sound sensible. The rand, the rating agencies and the refusal to recognise a crisis are three interlinked reasons for the bear to take heart.
As usual the deluge of data that confronts the investor every day from both the official sources and the companies is very mixed and seemingly trendless. Bulls and bears alike are therefore equally able to make their cases. It may be worth noting that several property companies have recently come to the JSE to raise funds and seek a listing. These people at least think it’s a good time to be selling shares. Interestingly at least two of these funds have considerable portfolios of non-South African properties.
 No matter how the apologists for and supporters of the new regime try to explain otherwise, the plain fact is that far too many state-owned and run institutions are unable to deliver what we need in order to be a winning country. Presumably someone somewhere is keeping a spreadsheet (thank goodness for computers) that tracks the procession of clowns as they rotate through the posts of chairman, board member, CEO, COO, CFO and security guard at the  many parastatals. A second worksheet will be needed to join the lines of patronage, family ties and cronyism. And a third will be useful for recording the lies and deceits about education, experience, achievement and performance. Any idea of keeping a record of the flows of money in unusual directions will collapse because most of the numbers will cause overflow errors.
Also supposedly overflowing are warehouses around Joburg being used to store the assets of Muammar Gaddafi, once President Jacob Zuma’s best friend. This now deposed and deceased previous leader of Libya is rumoured to have entrusted the care of a great deal of his wealth to South Africa. This is a fascinating story but one that may turn out either false or badly. Custodians of valuable things are easily tempted and there may be great disappointment in store when the key is turned and the doors to the vault are thrown open. Noticeably, JZ’s newest best friends Presidents Xi and Putin are sending nothing here for storage except pieces of paper with their names on them as well as Jacob’s and perhaps a deposit slip for a bank in Lichtenstein. What do you suppose those two very serious power players think after our man and his wife of the day waddle up the stairs into the welcoming interior of the executive jet that whisks them back to Nkandla?
The government proposal to put a levy on the purchase of every electrical appliance and gadget is uninformed and very poorly timed. Undoubtedly there’s a problem with the proper recycling and handling of all the potentially valuable and hazardous gizmos that we toss out, but money collected by such levies is not usually ring-fenced for the promised purpose and disappears into the maw of general state spending (e.g. the fuel levy) Secondly, to raise this matter when we are not getting enough electricity to run anything is pretty tasteless.
Lets hope the Sevens lads don’t trip up against Wales like the ‘bokke did recently. It’s a great sport to watch if you can remember to turn on at 19:58 tomorrow evening in time to catch the 20 minutes of frantic action. Nevertheless it will still be much cooler in PE than at Leopard Creek where the Dunhill Championship golfers are facing mid 30s today! That should thin out the field.
James Greener
Friday 12th December 2014