The market is getting a caning. In just a few days the All Share has lost over 5% as it watches developments on Wall Street with wide eyes. Once again I must point out that very few of the results and trading statements released on the JSE this week were upbeat about making profits. The reality is that in the US particularly and crucially, jobs are still being lost and house values are below mortgage loan balances. Nevertheless spurred on by the sight of amazing and unprecedented government relief and rescue programs the professional pundits world-wide feel obliged to bang on about how the worst is over and economies are showing every sign of improving. Remember the green shoots of six months ago? More and more investors are coming round to the idea that someone is crying “wolf’ rather often. I believe that the recession is a really big mess that is not yet finished with us. But in places some value is going to be revealed.
Luckily once again my invitation to join the great and good in the snowy luxury of Davos failed to arrive. The sole downside is that I did not score one of those natty scarves in SA colours that our delegation were sporting, but frankly the weather down here in the kingdom has little call for neck warmers. President Zuma made lavish use of the word “culture” when he was asked rather impertinently to explain his domestic arrangements to an international audience. My guess is that most of the delegates in Davos would be loath to discuss some of their own cultural activities which take place around a glass of gluhwein in a cosy hotel room far from home. Our President is far too engrossed in his calls to Zululand every night to indulge in that sort of thing.
The background hum of muttering about the need to nationalise the mines just does not stop despite some of the big guns denying that the government has any interest in the idea. The current demand is that mines ought to be “thoroughly democratised and controlled by the people”. There is scant evidence that any enterprise, let alone one as technically complex as mining, benefits from this undeniably cumbersome style of management. That this program could begin with expropriating mines which are not profitable is extra bad news for taxpayers. Pouring money into a bottomless pit, which is both figurative and literal, is even more unappealing than usual. There are plenty of loss-making mining companies on the JSE boards if high risk buying is your game.
On the subject of shareholders, it is puzzling to see that a portion of the rather avaricious golden handshake demanded by the departing Eskom head man comprises shares in that business. If I were the board I would seize the opportunity of his implied valuation and print up a truck load of share certificates worth R85m and send them round by courier pronto. It may not take long to find out if ex-CEO Maroga left behind a solvent business or not.
Departing Protea’s coach Mickey Arthur, will, however, wisely have asked for his package to be paid in folding money with the Reserve Bank Governor’s signature on it. The Cricket Board have confirmed their place amongst the elite and inept cohort of SA sport administrators who would rather destroy their sporting code than tell the government to get lost. The dismissal of the coach and selectors this week was even more disappointing than the news that beer will not be available at any World Cup match. Instead some insipid American brew will be on sale and the suppliers might well be right with their claim that they will not run out despite having to ship tiny cans of the undrinkable stuff in from miles away. In this country gentlemen, a carry pack of beer is a dozen Castle quarts.
James Greener
29th January 2010.
[1] In the days of open outcry trading floors a buyer could accept an offer with a shout of “mine” while a seller could satisfy a bid by shouting “yours”.
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