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

HAPPY NEW YEAR

There is little need to waste much space wondering why the cabinet minister in charge of our police should be spending Christmas in Dubai; or why the BBC needed to get a prince in to interview an ex-president; or how a humble pastor manages to drive a sleek and  expensive coupe; or if JZ knows where the money will come from to pay almost all student fees; or what the mortgage holders (i.e. the banks) think about a policy of land seizure without compensation; or what is the true value of a Bitcoin?

And the really serious stuff like Cape Town taps running dry, and Durban motorists being killed by rocks dropped from bridges will also not be solved in 700 words

The Proteas’ demolition of Zimbabwe in a so-called cricket test (4 days, pink ball!) has left most of us wondering what on earth is happening in the corridors of sports administration. All we can cling to is that there may be a South African taking part in the Winter Olympics skiing events.

So I wish you a safe, healthy and comfortable New Year, happy in the knowledge that when it comes to displays of incompetence and foolishness by those who regard themselves as superior to everyone else, the best is still to come.

Thanks for reading.

James Greener

Friday 29^th December 2017 (My buddy’s birthday)

LITTLE TO SHARE

If this writer were a proper analyst he would be mining the price charts and company reports for insights and hints about which sectors and shares to pick in 2018. There are many reasons including apathy and cynicism why this is not happening. A significant development in the past few years is the “hollowing-out” of the JSE as the number of listed companies which might be considered “blue-chip” dwindles. That blue-chip label is dangerously misused since currently few large local companies seem to be able to find and develop a sustainable and winning business model in the face of government regulation and international competition.  While the newly opened local exchanges are not yet posing a worrying threat to the JSE, its own boards are shrinking with at least half a dozen sectors having just a single member. Steinhof, as the sole constituent of the Household Goods index, which is down more than 90% this month, is currently the most notorious example. Hopefully the numerous smaller unlisted players in this sector are doing far better.

Another anomaly is that despite the ridiculously long list of new car models on offer in this country and the ceaseless flow of huge and apparently fully laden car carriers in and out of Durban harbour, the JSE’s Automobiles sector contains just Metair, a small R4bn market cap parts supplier. One can’t even get exposure to the profitable fuel supply business. And given the crying need for a new refinery capable of producing fuels that modern engines prefer, it’s odd that no one is thinking of a listing to raise that sort of cash.  Our bourse is not a good proxy of the economic landscape and so investors are mostly just looking for special situations.

Which is exactly the position in which the new leader of the ruling ANC party finds himself. Whilst no actual chairs were launched at the interminable conference, Mr Cyril Ramaphosa’s victory obviously surprised many who thought that Number One’s ex-wife was a dead certainty for the job. However, the old guard seem to have managed to surround the new chap with a coterie of “minders” but Jacob Zuma still faces the unexpected and uncomfortable position of being president of the nation without a trusted ally as the head of the party. How long that will work, is already cause for fervent speculation.

Cyril, in turn has been lobbed some early hot potatoes. The parting shot in JZ’s valedictory address was a promise of free university education while the congress delegates instructed him to legalize fixed property theft. Oh, and the comrades would very much also like to own the SA Reserve Bank. Presumably they think it’s full of cash. Or that it will be handy to take charge of the pesky bank supervision department?   None of these ideas will help to sustain the 10% strengthening of the rand against the US dollar that happened when news of Cyril’s victory was first leaked.

But it’s year’s end. The solstice was last night, and Christmas holidays are confirmed by the migration count of over 3000 cars an hour pouring down the N3 and into Durban. Parking at the shops is already inducing seasonal outrage.

So please have a very merry happy and safe Christmas.

James Greener

Friday 22^nd December 2017.