SUPER CYRIL & LUNGI

Newly elected ANC president Cyril Ramaphosa ought to ask some one to send him a chart of the rand exchange rate versus just about any other currency over the past 30 days. The dramatic and extraordinary 10% strengthening of our currency is obviously due to his election and the anticipation of the changes that will take place when he becomes president of the country. He must frame that chart and put it on his desk as a reminder of the faith that everyone is placing in him. Then he must call for the chart over the last decade and see the work that he still needs to do.

Recently a rather commonplace US aerospace event took place which initially caught the eye for two South African connections. The first was that the launch rocket was supplied by Elon Musk’s outfit. The other was that the mission was named Zuma. The intrigue thickened when rumours began that the payload was a secret US military satellite and that the launch had been unsuccessful. The news that Zuma might have crashed caused a frisson of excitement here on the southern tip until the details emerged. We sensitive South Africans began to fret that this was just another cause for national embarrassment. But we did also point out that Zuma was an unsuitable name for high tech. To date, despite senior US politicians asking questions, few facts are available. US military won’t even deny that it may have fallen into the fire pool at Nkandla.

Another odd choice of name is the word Zero for the nation’s newest bank. Doubtless there will soon be an excited PR piece of puffery pointing out the pontential and promises of keeping one’s money in Bank Zero. Apparently, it is to be an “app driven” bank so its client base will be ruthless and unemotional about switching to a different platform should Bank Zero fail to perform. This curious name is up there with Castle Free for its capacity to mislead.

Reportedly officials in Eskom’s finance and legal divisions were troubled by the secret R440m “signature fee” being paid to an “obscure offshore entity”. They apparently thought it might be a “disguised kickback”. Oh. Wow! Really? Surely not! Did any of said officials type the entity’s name into Google perhaps? Mind you, that R400m is less than 0.2% of the $2bn principal amount that our electricity utility has borrowed from China to keep the lights on. None of the world’s “fixers” will bother to get out of bed for such a paltry commission rate.  R400m back home however could build a few of the university lecture theatres that are so badly needed to fulfil our president’s wishes.

It’s Davos time again and our official delegation are on their way with those scarves in the colours of the flag that have become their trade mark at these events. It will be interesting to see how finance minister Gigaba, usually a snappy dresser, will handle this rather unflattering garment. By now delegates from other nations are grateful for the early warning served by these garish but iconic items about the approach of a sorry tale about the evils of colonialism and an outstretched palm.

I’m a great fan of the Dakar Rally and watch the snippets that appear on TV without fail. It is an epic event with almost a thousand participants driving odd looking vehicles at very high speed in incredibly rugged locations. It lasts a fortnight and important features of the pastime include getting comprehensively lost, utterly exhausted and sometimes quite badly injured. Amazingly there is frequently a cameraman on hand somewhere along the 750 km long day’s stage to record the confusion, despair and agony. Unlike other activitiess like shopping, banking, metered taxis and sending postcards which have been radically changed in the past decade by technology, the Rally steadfastly eschews the obvious boon of satellite based navigation aids. It also these days takes place in South America, a very long way from Dakar. Altogether a delightful and intriguing display of the human spirit.

As was Proteas fast bowler Lungi Ngidi’s maiden test haul of 6 for 39 in India’s second innings at Centurion this week. Way to go sir. And hopefully way to continue.

James Greener

Friday 19^th January 2018

SOMEONE IS POKING THE BEAR

The suggestion that an outfit called Viceroy Research based in New York is causing share prices on the JSE to go down and up is not impossible. It is probably an indication that diligent data mining is singling out shares which might be sensitive to some well-placed rumours and short selling. There may even be real reasons aside from illiquidity and ownership profiles why the shares are considered overpriced. Indeed, for ages many JSE listed companies have looked expensive when viewed under old fashioned valuation lights. The Steinhoff debacle – which seems to get more complicated every day – has definitely injected some edginess into the local market. Though finding this out has been difficult. Business Day, allegedly the nation’s leading financial daily newspaper, resumed publication after the Christmas break only yesterday. Exactly why they felt able to shut down even while the markets were open and while a very significant local business scandal was unfolding is hard to say. The so-called “dead-tree” media are hard to support when they treat subscribers like this.     

Finance Minister Gigaba may be overreaching his capacity for logic. On his way to celebrate the ANC’s 106^th birthday (Yes, there will be cake. Lots of it) and hoping to arrive in triumphal mode he laid out the requirements for the country to achieve even a modest 2% growth this year. Reportedly he claimed that “There are certain decisions we need to take, and if we take them the economy can exceed our expectations for the year.” Which begs the question firstly what are those decisions? Why were those decisions not taken years ago? And what if “we” don’t take them, even now? Sadly, given all that we know about the minister and his minders, none of the plans will include getting the government out of everyone’s way. The sole useful decision we need is to rewind and destroy the yards of red tape that the scourge of central planning has draped all over the landscape. Instead undoubtedly his ideas will include more instructions about what people must do, with whom and at what price. Calamity.

It looks as if some civil servants have been scaled back from Chocolate Digestives to Marie biscuits with their tea. The average year on year percentage growth in National Treasury’s monthly distributions to the ministries and provinces has plummeted from well over 6% to just 2,5% in just a few months. This has been forced upon them largely by the fact that tax collections are way behind what they had expected. There just is no money for the better biscuits. Conspiracy theories abound about the deliberate destruction of SARS from a once efficient and feared tax collection agency to a dysfunctional institution showing leniency towards JZ’s very many cronies and large family. If true, then the vastly more crucial expenditure items like the social grants and education and health budgets will also soon feel seriously strapped. No wonder Gigaba has begun to fret about the ratings agencies. He has learned how hurtful they can be.

The National Treasury website welcomes browsers with a huge banner advertisement inviting readers to “Name the New Online Budget Portal” and win a ticket to watch the Budget Speech live in Parliament. It’s astonishing that the “prize” of watching a “live” politician drone on in Parliament would have any attraction for someone who even knows what an online budget portal is. But if you do, please hurry. Entries close on the 15^th.  My entry is “Midden”.

Another sport another batch of dodgy administrators. This time it’s SASCOC officials, the folk who supposedly help deserving athletes to participate in international events like the Olympics, who are racing to court “to clear their name”. The levels of suspicion and distrust between the various directors and employees of the organisation has extended to bugging phones and offices. Which merely reveals to cynical observers that undoubtedly money is once again flowing in unusual directions and probably not anywhere close to actual sports men and women.

James Greener

Friday 12^th January 2018

THE MAYORESS AS CALENDAR GIRL

The prognosticators are putting down 2018 as another good year to be in the markets. Whether 2017 was good will depend a great deal on where you were at year end and how closely your portfolio mirrored bench marks like the Top 40 Index which scored a very fine 23.1% pa. This ensured that the All Share delivered 21%pa. However, the Top 40 and therefore the overall index is hugely influenced by shares which while mostly performing very well in 2017 don’t really represent the experience of the national economy. The constituents of both the Mid Cap Index (7.4%pa) and the Small Cap Index (3.0% pa) are also constituents of the All Share and these single figure returns are probably closer to what many investors will have experienced. Because of many factors, including derivatives and so-called index tracking funds this divergence between benchmark and the portfolios of many individual investors is very marked. This of course only hastens the move into the tracker funds which is fine, until the big guys crash. When that will be is impossible to see particularly as it feels these days as if every second set of accounts and reports are suspect. The old Blue Chip descriptor was never perfect. Now its nearly impossible to allocate.

For those of us who wrote matric when ball point pens were not allowed (remember the Parker fountain pen and the bottle of ink on the invigilator’s table?) today’s results frenzy is a bit unsettling. And that’s before looking through the newspaper supplement graced with a photo of the head honcho, Minister Motshega above her assurance that for those who passed “the world is their oyster”. It seems for example there are at least two dozen different languages that may be examined. Other unfamiliar school subjects include Nautical Science, Dance Studies, Equine Studies and Consumer Studies. And yet reports from employers and universities suggest that the reading and writing skills of far too many of these poor oyster catchers are minimal. What a mess. Unless of course you are hoping to find a job selling stuff in Modern Greek to a dancing horse on board a ship.

However, what is even messier is the maelstrom unleased by Number One last month when he stated that just about anyone eligible to attend university would receive government money. This provoked a reasonable reaction from those who actually handle student admissions and a slightly panicky response from finance minister Gigaba who can’t see any way of raising this kind of money beyond mugging all foreign visitors and firing most civil servants. However, the real stupidity has been reserved for the politicians and similar callous rabble rousing loud mouths who are cynically raising expectations of so many wanna-be students  Their contribution to the problem of the gross mismatch between available university places and applications, which was present even before JZ pulled the pin on his hand grenade, have been asinine in the extreme; from telling universities to register first and find facilities afterwards, to proposing day and night sessions to cater for demand. No one has checked what the lecturing staff feel about this. Already under pressure to publish to keep their posts, the good guys and gals are doubtless preparing CVs and looking up email addresses for overseas institutions. It’s a dreadful shame.

Apparently, our city council has published a calendar. It’s not clear who has received them. Certainly mere ratepayers are unlikely recipients. But that’s not a problem as the illustrations are not of the wonderful sights and vistas of Durban but mugshots of office bearers and councillors that few would relish to have hanging in their proximity. Astonishingly though, instead of rapidly binning these terrifying documents some recipients have bothered to study the almanac and now a squabble has broken out because it seems that only ANC party members will stare out at you all year. The best remark about the spat comes from the mayor’s spokesman who lamented that “…such a wonderfully informative calendar has been reduced to a political football.”

At last we might be getting some proper test cricket as the series against India gets underway today. This should be a real contest provoking some serious yelling at the TV screen soon.

James Greener

Friday 5^th January 2018