Friday 26 April 2019

PARTY TIME


There is little sign of pre-election nervousness in the local markets. The currency is off a shade but no more than caused by an injudicious remark by someone who should know better. Company results are all over the place with seemingly similar businesses having very different experiences with similar customer bases. Sadly, the threat and suspicion that even a set of audited financials is likely to have been massaged remains a factor when assessing company reports. An analysis published this week highlighted what seems like an excessively wide pay gap between a CEO of a South African company and the other employees of the business. But then one remembers the floods of undeserving mendicants, nosy shareholders, trouble makers and clueless officials who appear at the door and one wonders how they cope.
Evidence that the benefits of becoming a politician outweighs the nuisance of having to pretend to serve the electorate can be seen in the number 48. Amazingly, that’s the number of parties that has registered to take part in the upcoming elections. A goodly number of these parties have been formed only since the last election in 2014 and many only in the last few months and that illustrates an interesting aspect of proportional representation election systems. Which is to have any chance of a seat in parliament you need to be at the top of a party’s “list” and that is best achieved by forming one’s own party. 
Now it is true that, despite the frantic claims to the contrary of the current opposition party, a vote for any party whose candidates will never consider coalition with the ANC is a vote for the opposition. And if the sum of the votes for all the anti-coalition parties approaches or even surpasses the number of votes for the leading party, we will have a very much healthier democracy. Mind you, even if the maths says it’s OK, a vote for The African Content Movement formed by Hlaudi Motsoeneng sounds like a bad idea. Yes, the chap who broke the SABC. Whatever happened to the “lose their deposit” disincentive?
This phenomenon is the opposite side of the same coin that is causing so much anguish in the Brexit debacle. There the tax-eaters in London and Brussels are trying hard to ignore and reverse the clear message sent by the British voters that having two layers of politicians and bureaucracy is costly, unnecessary and a severe irritation. Patronage is probably the chief cause for public employee bloat around the world. In South Africa the problem is made worse because beneficiaries are largely incompetent at and uninterested in their tasks. There’s an awful collision happening between fulfilling the ever-growing list of civic obligations proclaimed by the regulators and the shrinking number of officials with the wit and will to provide the necessary service.
It’s the hospitality industry’s turn to face disruption of their business from the internet’s ability quickly to match customer and supplier. The cause of the unhappiness is likely expressed as too many beds and too few travellers. Typically, however, our government has failed to spot this simple reason and instead has penned a couple of hundred pages of new legislation to address a different and non-existent problem. The state’s proposals are unsurprisingly mostly ridiculous and costly for all involved. But what actually is needed is for them to work at making all of South Africa an attractive and safe place for every type of traveller in need of a place to sleep. Only the hospitality industry itself has the need, interest and capacity to solve its own problems. Especially if it’s a nice one caused by a surge in travel and tourism and demand for rooms.
The answer to the question about whether the Sharks have a coach is “Not really. One of the Dads just helps out” is cruelly observant. And by the end of the last bottle of wine the other evening some of us were admitting that watching Super Rugby is not very entertaining and the English Premier Soccer League can while away boredom. Provided the ref is harsh on the “divers”. Meanwhile the Proteas squad for the Cricket World Cup may not comprise the best players the country has produced but we wish them well and hope never again to see the word “chokers”.
James Greener
Friday 26th April 2019

Thursday 18 April 2019

EASTER TIME. BUNNY OR EGG. WHO CAME FIRST?


A slew of different economic statistics for various periods in the recent past don’t signal that economic growth is about to sweep us all forwards and upwards anytime soon. The only increases are in the numbers of people who depend on the taxpayer’s money for their salary, grant or stipend. The thousands of private businesses who together with their employees are the payers of most of that tax, battle at this time of the year when working hours are impacted by the sequence of shortened working weeks that our calendar serves up. This year it’s exacerbated by the election day holiday.
As an aid to those managers who have set aside the Easter weekend for crafting a message to shareholders, Tidemarks offers the following useful paragraph used to great effect by the CEO of a company in which the PIC has recently increased its shareholding.
“We know the road ahead isn’t going to be easy, given the amount of work to be done around entrenching sound business practices and critical (…….[1]) basics within the company. We’re constantly challenging ourselves to find the best solutions to move (…….[2]) forward and remain firmly committed to turning the ship around despite the economic environment being unsupportive and weak industry fundamentals.”
Plenty for them to mull over there. And perhaps better than the bold “Surprises at Eskom are over” from Phakamani Hadebe, the CEO.  One would think that the message to keep one’s head down and mouth shut would by now be carved into the large mahogany desk in the corner office at Megawatt Park. Or just scrawled in lipstick on the mirror in the en-suite bathroom. There are just so many skeletons in so many cupboards in that business that surprises are never over. What about the company’s debt book? A huge concern both for Eskom and the whole nation’s credit rating.
Now its our turn to be surprised by President Cyril who has been listed by Time Magazine as one of the worlds top 100 influential leaders. Wow. That’s a big call for a chap who seems to be dancing on eggs trying not to offend the powerful panjandrums in his own party. Affable and likeable certainly but its hard to recall anything influential Cyril has done since inauguration. Like discarding the many crooks and incompetents from his cabinet. What influence has he wielded to shift SA from its Bloomberg ranking as the world’s 3rd most miserable economy?
We have remarked before about the pleasant-sounding name Sagamartha for a company that wanted to list on the JSE but failed to pass some or other trivial accounting condition.  According to its founder and fervent champion Dr Iqbal Surv, this was because South African investors totally failed to grasp the opportunities offered by a loss-making company that is very highly valued (mainly by himself it should be said). Now he is off to try and list it elsewhere, so clearly there is a pressing need for some cash inflow into his stable of interests which most of us prefer to watch from afar.
The joke that a fan who called about the availability of places at Kings Park for the Sharks match against the Reds did the rounds this week. The punch line is that the pleasant young lady on the switch board assured the caller that there were plenty available and in which position would the caller like to play! Utterly unpredictable is the only pertinent phrase to describe the performance of the SA teams this year. Charges of nepotism, racism and financial mismanagement all have validity in trying to unscramble the mess. And this scribe is not about to try, beyond repeating my age-old cry that the state has no part to play in sport of any kind and that the ministry must be closed immediately.
Already the traffic flows are building for this long weekend and any number of worthies with the word transport in their title are boast warning about “round the clock policing” and “pulling out the stops” to ensure safety on the roads. We all hope they are successful. Please take care of yourselves.
James Greener
Maundy Thursday 2019


[1] Insert name of industry here
[2] Insert name of company here

Friday 12 April 2019

REVENUE DEPRIVED


Trawling through a selection of possibly significant price charts of securities such as the price of money, major shares and share indices and some commodities, it looks as if the bear which scared us  6 months ago has been forgotten. Hats off to those analysts, especially in the US who called that right. Even in SA with its looming election, bulls appear to believe that company earnings and the government deficit are under control or at least already priced into the markets. Eish!
It turns out the phrase “Son of the Soil” that appears on the EFF election banners next to the portrait of Julius Malema beneath his trademark red beret is packed with meaning, only some of which might be humble beginnings. It also refers to using the native language of the region and shows that the Economic Freedom Front is spending money not just on classy posters but on advisors who ironically have a fine grasp of English. Meanwhile serious sedimentologists are flocking to a traffic island on the M4 here in Durban North to view the wonderful example of bedding taking place on a row of flagpoles. As each new posse of party workers adds their own flimsy cardboard mounted poster to the top of the pole it soon slides down compressing those beneath it and after some rain there is a perfect layering of portraits and promises at the base of each pole. Wind weathering is adding to the geologic processes. It is interesting to record that the face of Mangosuthu Gatsha Buthelezi, now 90 years old has appeared on posters for every election since 1994. The lower levels could be nearly fossilised by now.
In Tanzania it is illegal to deprive the government of revenue and currently there are five Vodacom employees who have been arrested for this vile crime. Here in RSA, government is also anxious that we are depriving them of revenue hence we are obliged to report just about everything we do from putting up solar panels and rain water tanks to drilling boreholes. They already know about our sugar consumption and carbon dioxide emissions. Just as soon as they hear that we all must use oxygen they’ll be on it like a pack of dogs.
For a book which is described by its protagonist as utterly inaccurate it seems rather odd that his acolytes took the trouble to go down to the book store and tear up a few copies. That suggests it’s not fiction after all and even the secretary general of the ANC Ace Magashule is anxious about the skeletons in the cupboard. But not even a man of his power can prevent the electronic copies of this controversial book by Pieter-Louis Myburgh from whizzing about.
Its very pleasing to watch the commissions probe and hear the whistles blow and have these books get published, as it means a far healthier democracy than the crooks would like to see. However, the missing piece in the puzzle remains lost. When can we expect a successful prosecution of these thieves?
If Brexit were to mean British people exiting their country, then it is in full swing. The lazy London accent was everywhere in the Hluhluwe Game Reserve this week, with the locals working flat out at taking Pounds in exchange for hospitality and views of wildlife. Very pleasing when the media would have you believe that everyone on that soggy island is digging bunkers and laying in stocks of gin and pork pies.
So Ebat is the newest device to be used to identify drunken drivers and reduce the road accident rate. That’s fine, but without seeing a single traffic cop in 500km on the N2, except for those plonked on a chair behind a radar speed trap gun one hopes something else will change. The prizewinning driving display witnessed on my recent trip was the fellow who came down the off-ramp, crossed in front of two south-bound lanes of traffic and the central reserve to merge with the fast outer north-bound lane.
The story used to be that not even members of Augusta National Golf Club were allowed on the hallowed course in the weeks leading up to the Masters. And yet a week ago there were women amateurs having a tournament! Surely that signals the end of something? Discrimination perhaps?  And no one is to talk about Lions rugby please.
James Greener
Friday 12th April 2019