The All Share is down about 6% this month and unless Monday is a belter, this will be one of the worst months for the JSE in a long time. February’s record up-run is now a distant memory. This bear is looking all-powerful and he is certainly international. Sellers seem to dominate most markets at the moment. In the face of all this we should be pleased with the rand holding at better than 8 to the US dollar.
There were two especially bad pieces of news that caught my attention this week. Firstly our own Governor Mboweni received praise and congratulations from Sir Alan for how he is carrying out his duties. This worries me a lot. The Governor will at this very moment be thumbing through back numbers of Central Banker Weekly absorbing the fact that Sir Alan was the man who took 2 years and 17 steps to raise US rates 425 bp. Given the bad piece of news about producer price inflation leaping to 16.4%, the camera-shy one is undoubtedly already ordering that the “Rates Up” lever in his office be greased and polished. Once again I have to tell you that I still don’t understand why ruinously expensive money in South Africa will make Saudi oil sheiks drop the price of oil.
I thought that the idea behind a “happy hour” was that it was a marketing ploy by the bar keeper who discounted the price of drinks for 60 minutes, to entice customers who might then stay on when normal prices were resumed. I am therefore puzzled to read about the insults that were allegedly traded at the Armscor “management board happy hour”. Presumably the price of booze at these shindigs remains at zero for much longer than an hour since it will almost certainly be the shareholders (i.e. taxpayers) who are picking up the tab.
Apparently the slick and professional way in which Gautrain have told its financiers (i.e you and me) that the bill for the train set will be far higher than the last R25bn estimate has deeply impressed an outfit called the International Association of Business Communicators who live safely in New York. They handed over a “Gold Quill Award of Merit” to the chaps who manage the media strategy for this hole in the ground. I guess they will be parading it from a topless bus through the streets quite soon.
Not due for a Gold Quill anytime soon are the fellows over at the post office who deny all knowledge of the wholesale theft of items in the mail. Reports suggest that there are some members of their staff who are impeccably dressed in very expensive shirting and who have compiled an extensive library of books and discs. Presumably if an investigation were ever to uncover the larcenous crooks they would employ the tactics offered by the MPs who were found in similar circumstances and claim that they were “forced to confess”.
The South African Wine Investment Trust is complaining that expert evaluation of the current discounted value of a R170m the loan they made to the Phetoga Consortium would cost about R30 000. Aside from the fact that the source of their funds seems to be primarily the KWV and that the money was used by the consortium to buy shares in that company, it does seem a lot of money for someone to do a simple compound interest sum. On the other hand why not sell the shares which have more than doubled in price, and plan for a “happy hour”
I like the flair of the Spaniards. I hope they lift the cup.
James Greener
27th June 2008
