Thursday, 13 April 2017


The waffle level reached new heights when another of the ratings agencies threw its hat into the ring and also declared us to be junk. There is widespread puzzlement that markets have not plunged as far and as fast as the prophets of doom would like. In fact the JSE All Share is at the year’s high.  Part of the reason for the muted immediate response to the news is that real analysts running actual portfolios had long ago formed their own opinions about the likelihood that SA would default on its international debt obligations and made the appropriate adjustments to their positions. Hopefully for reasons of objectivity ratings agency people don’t have exposure to the markets on which they so grandly pass judgement. But who knows. There are small scraps of tantalising evidence that some insider trading took place ahead of the recent cabinet reshuffle and subsequent events. After all there were presents to buy for a president celebrating his 75th birthday this week.
The new Minister of Finance is very excited about the policy of Radical Economic Transformation. He is sure that this will place South Africa firmly on the path to growth and wealth. This is an outcome everyone would welcome but the details of how it will work are scant. It seems to lay great store in the ability of politicans to allocate resources and assets. Unfortunately, few governments have managed to do that successfully but this escapes the attention of the people in charge who mysteriously are always the first in line for the allocated goodies.
The difficulty of trusting and interpreting the deluge of data available to investors was nicely illustrated by the juxtaposition of the news that the nation’s 12 largest retailers reported sales of R600bn in 2016 while the net wealth of households declined by R120bn. Many people including our president can’t grasp just how much money these numbers represent and only accountants know what these terms mean but something is not quite right. Are retail shares a buy or a sell? It’s not easy.
It’s an excellent piece of advice: “Don’t Get a Traffic Fine This Easter” is the message placed in the newspapers by an outfit called The Road Traffic Infringement Agency. Sadly, it is doubtful if this message will have any effect on the customary accident-fest we endure at holiday times. Just who RTIA are is unclear but they seem to be yet another of the innumerable organisations that we so love forming here in South Africa. A resolution of the bus driver’s strike affecting large swathes of the country depends upon the South African Bus Employers Association and the Commuter Bus Employers Organisation reaching agreement with the strikers’ representatives at the South African Road Passenger Bargaining Council. And have you noted the outbreak of ombudsmen? They’re popping up everywhere, in theory to help citizens fight the injustices of their government. But really to swell the tally of state employees.
Most ratepayers were rather relieved when the Commonwealth Games were taken away from Durban. The financial benefits to a city of hosting these jamborees are never certain nor clearly revealed. However, next month the World Economic Forum circus is coming to town so we will once again be privileged to watch the great and good blasting through our streets in multi-vehicle cavalcades. The whooping sirens and flashing blue lights are so exciting. It won’t be as chilly here next to the Indian Ocean as the delegates experienced in the snows of Davos but nevertheless Number One and his entourage are sure to use the opportunity to wear those trademark scarves in SA colours. Have they wondered perhaps if those garments also signal to other delegates that they should dash for the exits and avoid the begging bowl.
Amidst all the information washing up around us one piece in particular is quite horrifying. Beer volume sales have declined! Even the new folk running SA Breweries have admitted that this is unexpected. This country is in far worse shape than any of us thought.
It’s a bit unfair that the criteria for selecting which two teams to drop from next year’s Super Rugby competition will be the balance sheet and not the score sheet. If the Bulls carry on as they are they will be lucky to come last and yet they can’t be dropped because they have money.
James Greener
Maundy Thursday 2017