Friday, 25 September 2015


In case you missed it, SARB left the repo interest rate unchanged but the local markets were much more interested in planning for an extra-long weekend and heaping scorn on the Springboks. This allowed the rand to test the waters north of 14 to the USD and look comfortable at worse than 21 to the GBP. Without the huge contribution from SAB responding to the takeover talks, the All Share index performance would be negative instead of the misleading 1% positive it may record. It is distressing to note that the platinum sector index lost as much ground in the month as the beverage sector index (in fact just SAB) gained. That is more than 20% in each direction.
The sole simple fact to emerge from this incident about Volkswagen diesel engines coughing out far more nasty gasses than the rules allow them to, is that simply no one wants to pay tax. Governments world wide with near zero understanding of the sometimes rather complicated relationship between the waste products of an industrial economy and the health of our planet have nevertheless been delighted to have been handed something to regulate and tax. Because of this aforementioned (and quite understandable and reasonable) ignorance they have relied on the easily targeted emitters like car manufacturers to report just how much gas and tax they are responsible for. The outcome was obvious, and interestingly much of the global official fuss has been about the missing revenue not the filthy fumes. Now will the smug US regulators will turn their attention to Yellowstone Park where the geysers belch perhaps as much as 20million tonnes of carbon dioxide every year. Dreadful!
Very little is known about our brand new minister of mining. He may have a teaching qualification and has worked at as a teacher, a politician and was the Free State Provincial Minister for Agriculture. Mosebenzi Zwane is supposedly friendly with the Gupta family who have benefited enormously from in turn being close friends of Number 1. But the worst thing about the man is that he is prepared to dress himself in the skins of endangered animals. It remains to be seen if he hastens, slows or even reverses the fortunes of our desperately endangered mining sector.
The government officials responsible for steering the new contentious Promotion and Protection of Investment Bill through parliament have been forced to agree that the proposed legislation is mostly silent on the first word of the name and so have agreed to drop it. The problem is that most of us in the private sector think that it is the second word which is the real problem. In particular the bill can be interpreted as in fact decreasing protection for foreign investors and we all know what happen when they feel unhappy. Cue more rand weakness.
Clearly many municipalities are finding it hard to tempt anyone to lend them money. Presumably all the usual lenders are already “full on the name” and are wondering if they will ever see their cash again. Hence the bright idea being floated that someone (presumably the taxpayers) should start a new bank dedicated to lending just to municipalities. This is rather like the Brics Bank idea but without the deep pockets of China and India. Avoid.
As usual Heritage Day spawned an outbreak of burning boerewors, colourful costumes and popular presentations. Transnet, the somewhat disgraced state owned utility that recently bought trains that don’t fit through all the tunnels, seized the day to direct our attention elsewhere. Bravely it linked heritage to the ports that it operates in the Eastern Cape. Among the historical gems it offered is the news that Port Elizabeth was once known as “The Liverpool of the Cape”. This is easily the most interesting thing to emerge from the public holiday. Clearly the similarity dimmed, especially when the Beatles appeared.
There is nothing left to say about either the ‘boks or the Sharks. The score line is all that matters now. I really don’t like these Grand Prix raced under floodlights. Fortunately, though Ferrari do.
James Greener
Friday 25th September 2015