Friday, 28 July 2017


From a very simplistic standpoint it’s astonishing that our currency is not far weaker than it is. If the social media is to be believed the very influential Gupta family resident in Saxonwold, Johannesburg are shifting funds offshore as fast as their private jets can refuel. And they are doing so also on behalf of the scores of useful idiots who have arranged satisfactory outcomes and situations for the family. Then there’s the less opaque stuff such as credit worthiness down-grades, the repo rate cut and business unfriendly cabinet decisions which even the mainstream news services are probably reporting correctly. Curious.
The unfriendly stuff seems to be a consequence of two factors which loom large in official thinking (oxymoron alert): shortage of state income and a desire for retribution for increasingly distant injustices. The country no longer has (and actually never really did) the time to do anything else but get every single able-bodied person into productive work; which excludes shuffling papers in a government office. It would be really good if we no longer had debates, meetings, conferences and symposiums about who owes whom what because why.  The recent change in the tax treatment of South Africans working overseas will raise scant income but will discourage many of the diaspora to think fondly of returning one day.
Exchange Traded Funds (ETFs) have been around for a decade or more and still cause suspicion and hostility. They are nothing more than a version of the familiar Unit Trust (grandly aka Collective Investment Schemes) in which the fund manager makes few investment decisions. He or she (actually, it – a computer) merely has to mirror the constituents of a benchmark such as a popular market index (e.g. JSE Top 40). Arguments for and against this “no brains required” investment technique have consumed acres of paper, but the buyer of an ETF pretty much gets what it says on the tin. The NewGold ETF is no longer new but provides convenient exposure to the price of gold in rands. The Krugerrand does this too but is accompanied but the costs and worries of delivery and safe-keeping. Theory suggests that the prices of these two instruments ought to be comparable but in fact the KR enjoys a premium which over the years has ranged from under 5% to over 10%.  Just why this premium is currently at it’s all time high of 11.4% is unknown, maybe it means that NewGold is cheap. Especially if the rand is going south.
The downside to cleansing an organisation of its assorted shysters and crooks is that it is usually very costly. In addition to not doing their jobs properly and honestly the now departing executives have clearly spent a great deal of their very expensive time flipping through the pension fund rule book searching for loopholes. Probably these rules were written in a different age and time when it was never imagined that Mr Molefe’s 15 months of “service” to Eskom could in certain light, be read as 13 years.
It is both amusing and alarming that the country is about to be landed with a so-called “Intelligence Boss” who seems to possess neither skill. He also does not have any documents to support his claimed academic achievements and has asked his new prospective employers to overlook this shortcoming. Why he has not sought duplicates is not explained. The good news for him however is that his alleged criminal record will not be a barrier to entry once he finds his degree certificates.
Not only are there no Australian teams in the Super Rugby semi-finals this weekend but there might also be no Australian cricket team this season. There is, it seems, a disagreement about money. Back home, the folks who run our athletics seem to have encountered a different problem. They can’t rely on simple maths to decide who of the athletes looking for a place in the national squad has set the shortest time or greatest height or distance. They need to have a quota as well, though no one is prepared to say how to measure that. Here on the edge of the Indian Ocean the Currie Cup has seamlessly claimed all rugby fans’ attention and my pleas for someone to help me cheer the Lions tomorrow have been ignored.
James Greener
Friday 28th July 2017