There is less than 5% left beneath the All Share if it is not going to set a new low for he year. I think the probability that it will pierce that level is high because at last a few of the familiar relationships have appeared. Like the rand weakening. Like sellers popping up with shares that report disappointing earnings and like the dawning realisation that far too many dangerous socialists are squeezing into the wheel house and tugging at the ship’s wheel. The country is drifting leftwards deeper and deeper into the seas of intervention and control. Pretty soon it won’t just be the Olympic athletes who are being told when to wear what clothing. I may have to go and buy some shoes soon. The FSB are certain to have a view on a dress code for rural stockbrokers. I am disturbed by the mutterings that so far government programs have failed to deliver the required targets of transformation and so the polices need to be toughened up. Fellows, we have a severe shortage of skills in this place. No legislation will ever solve that problem. Only making the country safe and pleasant to live in will retain and grow those skills.
There is a well established precedent for retirees from the local financial regulatory scene to choose a life in Switzerland after they have accepted the gold Rolex and the card filled with illegible messages. A previous minister of finance was pleased to join his money in that Alpine haven just as soon as he could. However, given the Swiss people’s new-found eagerness to blab about some of their clients and also the sudden fragility of previously rock-solid banking names Governor Mboweni might do well to have a chat with Barend about the braai and potjiekos scene on Lac Lucerne before buying a large cowbell and some skis.
I look forward to the day when I will not have to express surprise that the US dollar has enjoyed yet another strong week. This time however, it does not look as if the foreign money was looking for shares on Wall Street. Maybe the cash inflows to the US are flowing to bargains in property and other deeply distressed segments of the economy. Americans themselves are preoccupied with coping with storms with names like Gustav, Ike and Sarah. The first two of these wild and windy phenomena have threatened to close down oil production platforms, while the other one is keen to punch holes for oil wells into every corner of America. Especially in places where there are polar bears. The prices of oil and gold (and probably other stuff) have been swooping and swooning on the slightest excuse and these alternate threats and bounties appear to feed through to investor sentiment in every area. Interestingly the Japanese Yen is the strongest currency of the moment.
We are right in the heart of results season now and with only a few notable exceptions most businesses are revealing that it has become more difficult to grow profits than a year ago. One banking group has warned that their results yet to come will admit to lower earnings so confirming that not everyone in this industry has managed consistently to buy low and sell high or to lend to folk who can pay you back.
SA Breweries have announced that they will be launching a new brand of beer. To be called “Quart Behind Noscore” it will be the new sponsor for the Proteas.
James Greener
5th September 2008
