In the past six weeks or so the JSE has steadily
ground its way mostly upward in steady but unspectacular fashion. Compared to
most other markets, especially our so-called BRIC “peers” we have been very
pedestrian, however. In what way will this resolve? In a burst of upside
enthusiasm to bring us in to line? Or will we just lurk here ready to join the
others when reality bites and the bear returns. Certainly there have been a
number of good statistics about jobs, inflation and growth, both offshore and
here. In the US
a familiar bubble is inflating around the worth of two men and a dog computer
program ventures that have shorter track records and fewer real assets than any
paddling team currently in the “Duzi” canoe race. And the storms rage wider and
stronger in euroland with almost every country there now deemed to be less able
to pay its debts than a few months ago. The old adage about “neither a borrower
nor a lender be.” must be gathering fans.
Have you noticed that our leaders have suddenly
become quite concerned about the weather? A few weeks ago they proposed
legislation that could send to prison anyone forecasting bad weather without
getting official permission. Then there was a General Notice specifying a
tariff for “Aviation Meteorological Services”. This seems to introduce a price
for providing a weather report to any pilot of a plane above a certain size.
The actual cost depends on the square root of the mass of the plane. Presumably
the logic is that larger planes use slightly more of our weather than smaller
ones. And this week “deputy minister Ms Rejoice
Mabudafhasi together with the South African Weather Service (SAWS) has embarked
on a weather awareness road show” with the theme “power our future with
weather, climate and water”. Attendance is presumably free but raising money is
clearly important for the department since the dear old weather bureau’s own
website carries a light-hearted yet gruesome cartoon on the perils of not
subscribing to their early warning system for lightning strikes. It is all
rather sad as there are already plenty of free weather reports and forecasts
available on the internet. Not even the “official” one is ever always correct!
The JSE has entered the investment analysis business by proclaiming that
a number of listed companies are publishing reports and accounts which do not
meet certain standards of accuracy, self-consistency and transparency. This is
not news to professional (and probably many amateur) investors who understand
that any company publication is a trade-off between concealing things from the
tax-authorities, competitors and employees while revealing things that will
make them look attractive and smart to shareholders and investors. If a company
really told the whole unvarnished truth of what it had been doing in every dark
corner of its business the investment decisions might be much easier. But life
is never like that.
I have some sympathy with Telkom over the incredibly large fine
imposed on them by the Competition Commission. (Another example of revenue
raising?) The company is undoubtedly inefficient and corrupt but making them
sell assets to meet a fine seems foolish. Telkom should sell assets only when
they can no longer manage them to provide an economic return, perhaps because
of regulation. Dismantling these huge government-instigated monopolies is
proving tricky all over the world.
Sports teams enjoy the sometimes quite substantial income derived
from the sales of replica kit. Will the Blue Bulls ever sell any of their new,
hideous and dreadful zigzag patterned pink jerseys? Fortunately the
blue-blooded faithful of Loftus will never have actually to witness in the
flesh their team prancing about in pink as these abominations are for away
games only – presumably to induce the opposition to laugh themselves out of the
game. My guess is the marketing team from the supplier included several good
looking young women dressed in these shirts who distracted the board long
enough until the chairman signed the order.
James Greener
17th February 2012
