RACING AHEAD

And there it is. Another new high this morning. 55 355, which is about 700 points better than ever seen before. Today’s heavy lifting has been performed by MTN  which now enjoys a market capitalisation more than double that of its competitor Vodacom.  These shares together with BAT and Sasol are big contributors to the possibility that the All Share total return this month could exceed 6% -- the best result in two years. And this is all happening while the country suffers severe social strains and dislocations. Do note, however, that these are mostly all rand hedge trades. That is, the companies concerned have many customers who pay in dollars not rands.

Alongside the big and noisy protest marches at various places around the country is some very delicate tiptoeing past the nasty reality that the country is witnessing a huge surge of violent racism. In order to deny this unmentionable truth everyone has been searching their keyboards for the totally unused letter x and using the politically correct word, xenophobia. The nation’s leaders have been swift to climb aboard this sanitised bandwagon and join in the displays of hypocrisy and pretence with promises that they will do something about it. Since they have done nothing for many years about the shocking number of attacks and murders of local farmers and suburbanites and have allowed the bulk of the police force to become just that – bulky and ineffectual – there is little hope of any useful action. We wait in vain for the arrest and charging of the royals and rogues who have been inciting and suggesting an array of utterly illegal actions. How exactly does one “fight for peace” or expect one’s employer to give away a portion of his farm?

 Everyone seems delighted with the new boss man at Eskom. It’s a bit alarming though that among the first tasks he seems to have tackled is his bonus. Most of his paying customers won’t feel so churlish about it though if he immediately stops supplying power to everyone who doesn’t pay for it. Meanwhile, no word from the “War Room” about their campaign plans to ensure the country gets all the power it wants. Do you think it has a large map table with cute young women pushing models of broken pylons around it with billiard cues?

Even the normally quite sensible Finance Minister Nene has revealed that he really does not understand that it is the state’s policies which prevent the nation from developing ways to educate and employ people. At a conference this week he claimed that “… taxes can help Africa grow”.  The evidence suggests exactly the opposite. Just about everyone has reduced their forecasts of our growth rate this year and taxes have been increased. Go figure, as they say.

What ever he says, few will believe that Andrew Hudson’s decision not to seek re-election to the South African Cricket Board selectors panel has nothing to do with the terrible political interference that harmed our semi-final chances at the recent World Cup. With not a single day of test cricket experience amongst the other selectors, the matter of Andrew’s replacement will be keenly watched by those of us who want a Proteas side that can bowl Australia out twice in two days. It will be interesting to see if the new 16 team Africa T20 Cup tournament to be held here in September will reveal any hidden talents and attract enthusiastic crowds. Cricket in SA very badly needs both.

The only reason that Sharks supporters are relaxed this weekend is because the team isn’t playing.

Next week is one of those 3-day working weeks that we so enjoy here on the Southern tip. And given the near impossibility of securing an appointment with anyone next week it seems that those 3 days are also a write-off. Come to think of it, unless something really stupid or wonderful happens, Tidemarks will probably not appear either.

James Greener

Friday 24^th April 2015

NOTHING IS WORKING VERY WELL

Wheee. That’s the 54 000 level shattered by the JSE All Share index. In the last three weeks prices of shares in the index have been going up at a rate in excess of 120%pa. That’s very fast and anyone wanting to find a gloomy end to this story can be heard muttering about “exponential blow-ups” and other such rather jargon. The story remains, however, simple. There is a burning desire to own shares rather than anything else and buyers need to coax sellers – who probably just weeks ago were the doing the same – to part with their holdings by offering ever higher prices. It’s maybe useful to note that volumes and values of turnover are not record setting. Sensitive viewers should be ready to avert their eyes.

Meanwhile there is still no sign of the government setting out its stall of assets for sale and Eskom’s need for money is getting more urgent by the day. This week there were times when just one half of the theoretically available generating capacity was actually on line and so power cuts were numerous. This has of course added to the other tensions which are boiling over so seriously.

The awful lawless violent slaughter and attacks raging through our unhappy land is opportunistic violence and looting without any fear of retribution. It is also a consequence of not having anything else meaningful to do. The widely used x-word is totally wrong and dishonest and is an attempt to deny that we are watching racism.  There is no "irrational fear of strangers" here. Triggered and seemingly tacitly condoned by disgraceful and culpable so-called leaders, the savagery is terrifying. Most of us are appalled by the lack of arrests and charges for what seem to be a large number of obvious law-breaking activities. The response in parliament was almost nil with irrelevant squabbling and score settling while the country burns in darkness. Oh how badly we need a leader to understand that only private sector entrepreneurs like the ones being hounded from their shops and homes can ever create the jobs that are so badly needed.

The student rabble at UCT has found that life is pretty much unchanged even though their demands to have a statue on the campus removed were met. They still have to work to get educated but now have reached the conclusion that the university is not hiring the best teaching staff available and in consequence their studies are compromised. Without access to the history and records of their lecturers the indignant students have made their claim on the very basis they are supposed to reject - the race of the individual.  Indeed now that skin colour has once again been legislated into prominence for appointing people, critical posts remain vacant for years merely because there are suitable applicants of the “right” hue. News this week that SA is at the very bottom of maths and science skills rankings confirms that it is not going to get better quickly. Future job seekers will be unable to complete even the knowledge and ability sections of the application form. Students and pupils throughout the system should be making the best of the lecturers and teachers that they have now. How’s that project to offer Mandarin as a school subject getting along?  Has the department sourced any black skinned teachers of that language?

The Sharks and Formula 1 are both in trouble. Both are really boring and losing fans. Also in trouble will be the Proteas man who this week confirmed that the government selected the team for the semi-final at the Cricket World Cup last month. And being ignorant bigoted racists they selected an unfit off-form player. And we lost. It’s likely that a similar stupid and divisive intervention awaits the ‘bokke during the Rugby World Cup in October. How many small boys and young men will in the next four years have moved to Canada and taken up ice-hockey? There is simply no understanding of those who think that international sport is about anything other than having the best possible team and winning.

James Greener

Friday 17^th April 2015 (no thanks to Eskom)

ONLY THE POOR FLY SAA

In the last dozen years or so a largely benign practice has evolved into an apparatus that severely distorts many financial markets. Committees which set (amongst other things) the interest rate that a central bank will apply when it lends funds to the private sector have assumed powers and delusions of infallibility way beyond their scope and skill. Not only is the decision of each meeting handed down to the grateful and waiting population as if it were sacred wisdom but the minutes of those meetings are revealed a few months later for the pundits to dig through in the hope of gaining insight into the workings of supreme beings. The very words and the order in which they appear are taken as omens and portents of the future.

Allegedly this interest rate ought to influence pretty much every aspect of the economic landscape and most importantly control the level of economic activity within the nation. Clearly it doesn’t do it very well, if at all. Recently in desperation in some parts of the world interest rates have been lowered to below zero and are now negative. This requires that lenders pay borrowers a fee to accept a loan! The consequence of this kind of nonsense is that investors are ever more willing to pay higher prices for the shares in companies which really don’t deserve that level of valuation. Perhaps when the crash comes, the wise men will find a way to let markets and not committees set the price of money. That won’t remove booms and busts but they will get turned around much more quickly.

A reason put forward by Brigadier-General Marthie Visser of the South African Air Force for the acquisition of three more lavish passenger planes was the increase in the country’s international commitments. Apparently the president, his deputy, the minister of defence and any one else whom JZ declares to be an “envoy” with such a commitment, is entitled to an upgrade to one of these sleek beauties. The only “envoys” with international commitments that most of us could identify would be national sports teams. Politicians and bureaucrats could conduct what little useful stuff they do by Skype or at a push an economy class ticket. If there is a foreign functionary who feels that they just must see Number 1 in person – perhaps to hand over a present or something – then they can come here. Pretoria is best at Jacaranda time.

It’s odd that students are being revolting quite so early in the year. Usually it’s the looming mid year exam season that creates the need to find other things to do. Now that the life-threatening lump of bronze has gone, the UCT campus presumably is today a silent haven of academic endeavour. Within the context and standards of his time Cecil John undeniably made a very significant and long lasting contribution to the development of our chunk of Africa. One wonders if there is today anyone among the dancing throngs who in their lives will make a similar impact and whose peers will in due course subscribe to erect a memorial to sit upon the empty plinth. Here in Durban, public money was used to install an unsmiling and perhaps even unflattering bronze head of Mr Moses Mabidha in the precinct of the huge and iconic soccer stadium that bears his name. The puzzling thing is that Moses was a communist and not a footballer. Perhaps he too ought to be moved to somewhere more appropriate.

Lots of sport for the couch coaches to supervise this weekend. The Masters golf and the Grand Prix fixtures are already underway and shortly after the rugby tomorrow there’s the Boat Race. It’s an easy choice to select the Lions cap to wear in the TV room. Surely every one else is also too embarrassed to wear a Sharks shirt after last weekend’s disgraceful display?

James Greener

Friday 10^th April 2015

FUNNY PECULIAR

The JSE All Share index is back to where it was 8 months ago, around the 52 000 level. Between then and now we have seen 46 000 (in October) and 53 500 just a few weeks ago, but that does little to capture the wild gyrations in between. Hopefully a few traders may be happy, but there will be many who will have retired hurt. Investors, however, should take note that the proportion of companies reporting moderate or even severe declines in earnings is increasing.  It is always hard to sell especially when there are no great alternatives to the share market; nevertheless it does seem like a suitable time to review liquidity levels with an eye to nudging them up a bit.

Several commentators have already noted that the problem with stories in South Africa on April Fools Day is that it is nearly impossible to distinguish the real from the ridiculous. Virtually every one of the utilities owned by the state and managed by its satraps is in the midst of a dreadful drama which no writer could have ever composed. Furthermore they are interwoven in cunning and mystical ways. The SAA has not been paid by the post office and so will no longer carry any airmail. National Treasury is withholding municipal grants because those entities have not settled their bills for lights and water. The SABC will soon be unable to reach its audience because the ministry can't make up its mind about how to divide the spoils. The king moans about hard working foreigners displacing locals and then expresses surprise when his subjects attack the poor souls. The outfit responsible for building and maintaining the national road system is forced to reveal that it is hatching a plan to levy punitive tolls around Cape Town. And students claim that a 100 year old statue on their campus causes them unbearable pain and demand its removal. Even this last tale is not a joke.  

Finance Minister Nene seems very confident that he is going to bank R23bn from the sale of various items from the state storeroom in the next few weeks. This sounds like a really good idea but it is fraught with difficulties that will be interesting to watch develop. So far his confidence has not yet extended to announcing what goodies are being sold or who he believes the buyers will be. Furthermore his valuation of the assets may exceed what those buyers are contemplating spending. And the biggest spoke in the wheel is likely to be the understandably noisy reaction of the employees when they are told that they will be leaving the security and comfort of the government payroll. Private owners have an unfriendly habit of requiring a profit margin. Nene’s problem is that Eskom very badly needs that money. If nothing else there are leaving presents to be purchased for virtually the entire board of directors.

As if by magic, the Sharks are top of the conference and third overall. It all seemed so unlikely just a few weeks ago. This resurgence has however caught the eye of the SANZAR bigwigs and they are nitpicking their way through the rule book seeking ever more draconian sanctions for already punished offences. Shocking stuff. We Proteas fans can be quite sure that without the midnight selection intervention of a pigheaded politician valuing ideology over national pride, we would have ensured a much more exciting and competitive World Cup Final than was provided.. And I trust you noticed that following my wish last week, Ferrari did indeed score a win. You’re welcome.

Have a safe and happy Easter weekend

James Greener

Thursday 2^nd April 2015