Friday, 6 January 2017

HAPPY NEW YEAR



Number One spent a very happy festive season in his Zululand home. There were several occasions when he and his mates were able to don the pelts of endangered species and dance the night away. Even his ex-wife pitched up in the province to make a pointless speech about her current job in Addis Ababa. And undoubtedly, she popped round for a chat with JZ to discuss the idea of a dynastic presidential succession. An unappealing idea for the rest of us.
About the only steady number in the markets at the moment is the demand for US dollars. Owning a few of those appears to be preferable to just about everything else. Even the mysterious Bitcoin which enjoyed a great 2016 has been hammered in the early days of the new year. Puzzled investors (i.e. all of us) can choose from the complete range of available forecasts being confidently issued by the seemingly omniscient. Bull or bear? You choose.
Matric results season is a good time for newspapers. They can fill acres of space with pictures of high achieving candidates, jaw-flapping politicians and in some cases, both together. Although how they persuade the ex-pupils to get dolled up in their school kit again is a mystery. Then there are the words. Words of congratulation, commiseration and platitudes and clich├ęs. In what even one youth group so correctly derided as fruitless expenditure our local municipality paid for an all-night “vigil to pray for positive matric results”. Way too late perhaps? But the real story lies in the dozens of pages of individual grades which starkly highlights the irrelevancy of fussing about mark adjustment and pass rate percentages. More than 150 000 candidates have been told that they are good enough to enter a degree course at a university. This is manifestly false and callous. For most of them the truth will be very different.  
In fact, these enormous numbers also reveal that our national model of making a single minister of education responsible for so many “customers” is doomed to fail. Even splitting by province is no help. Here in KZN more than 1700 schools entered pupils for the school leaving exam and 12% of them had fewer than 10 candidates. Even the most competent CEO on the planet can’t manage that kind of client base, so it is unsurprising the business fails to succeed. It is a big and difficult mess to clean up especially given that many parents are content to pass the buck for educating their offspring onto someone else.
So Exxaro, the listed mining company that supplies a great deal of the coal that Eskom burns to provide our electricity, seems to have become fed up with the government’s efforts to impose a politically based system of asset allocation. Dressed up in a melee of Bs and Es and other jargon the policy seems to promise that ownership is a guaranteed route to wealth. This is not truthful. Only a few enterprises make sufficient money to cover all their costs and then still provide enormous income for the owners. While being a shareholder sounds all sophisticated and clever it may take many years before the flow of profits covers the cost of the shareholding. It does of course help enormously if that cost is paid by someone else – a feature of many of these schemes – but a listing on the JSE for many firms is largely about acquiring a list of people to approach next time you need some cash. The JSE’s mining sector – a particular target of the state for these “transformation” deals – has failed to deliver any return for an investor who has toughed it out for the past 10 years. Individual companies have of course soared and crashed over shorter time scales and there will be smug speculators amongst us but overall it has been a poor industry in which to grow rich as an owner.
National selectors have a hard enough job in picking the best on form sportsmen (and presumably women) for the national sides. Understandably the athletes choose to go where their medium and long term benefits are best. Undeniably it is hard to match overseas salaries. But if the guy is eligible and keen to play why is the task made more complicated by the various rules and regulations because of those choices?  Sad and frustrating. Just what is Kolpak anyway?
James Greener
Friday 6th January 2017