Friday, 22 April 2016


With just one week of April left (and it’s a short one at that) the All Share is barely 1% better on the month but the dispersion across the various sectors is huge. Some mining shares are up over 20%. This is another piece of evidence that the dreadful and prolonged slump in commodity prices may be over. What isn’t over are the arrangements for the merger of Anheuser Busch In Bev and SAB Miller. Many parties, particularly SAB management are anticipating substantial windfalls when the deal is finalised, but this news has caught the attention of employees less highly placed on the food chain and they are threatening to derail the process unless they too share in the bounty. Those of us who also forgot to buy SAB a few years ago share their frustrations.
One of the saddest developments in our country in the past decade has been the rise in officially practiced and condoned racial discrimination of our citizens. Together with unpunished outbursts of terrifying hate speech and near treasonous incitements to violence, it is not just Number One who is in contempt of the Constitution. The possibility of all South Africans getting the country we were promised is fading.
The present government has resurrected the immoral and inhuman race classification criteria in order to identify people who it believes should benefit from a political allocation of resources. That now nearly half of the country’s millionaires are from a previously disadvantaged background shows that this policy has certainly worked for the well connected. But there are problems and issues with this redistribution program
For example, the percentage of black-owned shares in a mining company may never fall below 26%. Therefore, if a sale by a “black” investor would cause a breach of that limit, the seller must hold off until a bid from a sufficiently “black” buyer appears. Bids from “white” investors cannot be accepted. The seller is immeasurably disadvantaged all over again. The market’s reaction will be to have two prices for the same thing. Ironically the “black” market price will generally be the lower. This is already happening with the listed “blacks only” counters on the JSE. Surely this is not the state’s intention?
The purely practical difficulty is that the investment industry (like all law-abiding entities) does not record the race of each of their clients, customers and shareholders. To do so would mean that someone would have to meet and classify each client which would be an impossible and illegal task. And further, the race of an investment fund is meaningless. But despite these facts, every day brings news of further edicts which apparently have been compiled mainly to hassle, hamper, hurt and hinder a shrinking proportion of the population which poses no threat to government power but ironically supplies it with most of its money. It is as we said at the outset, so sad.
There was recently a meeting in Washington of most of the world’s finance ministers and central bank governors. It would be fascinating to learn what this crowd thought of the fruit of their labours on the global economy. Negative interest rates, deep recessions, volatile currency exchange rates and widespread poverty and unemployment are hardly chapter headings for a success story!  Only half a dozen of the 100 or so delegates posing for a rather overcrowded group photo are not in suit, collar and tie and they are all women. But that small group does include the two most powerful people there. Namely Mesdames Yellen and Legarde who are among the handful of heavy hitters seated in the front row, of which our own Governor Lestja Kganyago occupies the end seat. Goodness. “Respect” as they say! But perhaps he was just late for the photo session and the bleachers were already full.
The mood at the bowling club bar will be a bit lighter this evening with the amazing last minute victory achieved by the Sharks this morning in New Zealand. Fortunately, there are no Cheetahs fans to rain on the parade. This rather unusual scheduling with two SA sides completing their weekend fixtures before the Friday beer is quite unsettling.
James Greener
Earth Day 2016