Of the 20 or so important local company and economic announcements
and updates this week, about only three or four could be rated as
disappointing. These would includes Impala’s dreadful labour debacle, Murray
and Roberts’ sizable rights issue and Eskom’s woeful attempt to put a positive
spin on the fact that their planning remains dreadful and power shortages are
likely. The top good news item would probably be Sasol’s update that their
earnings will be nearly double last year’s figure. It is not hard to see why
the bulls have been prancing about around goring great big holes in the 34 000
All Share ceiling. I still don’t recommend a full-on buying program but it is
probably a time to reduce liquidity levels a bit. (Translation: if you have
lots of cash on hand, buy some shares with some of it.) (Wealth Warning:
Whenever a life-long bear says buy there is probably something really bad about
to happen!)
The sort of bad things to fear would be statements from the likes of
Minster Shibangu who castigated the country’s mining companies with being “obsessed
with a bottom line approach at the expense of national objectives…” This
obsession, which creates wealth and jobs, is
far less dangerous than the government’s obsessive loathing of the
business (and incidentally tax-paying) sector.
Internationally the fascinating news was the planned IPO for
Facebook. What is little more really than a computer program that allows people
to tell the world about themselves has created a very deep and valuable mine of
personal data about tens of millions of individuals. It seems this mine may now
be worth around $100bn. That’s a lot. The actual listing of that share in New York later this year
could well be one of the more entertaining rocket launches of the season now
that the Shuttle has flown its last.
The headline that said some accountants were going to introduce an
“Insomnia Index” at the forthcoming Mining Indaba was quite misleading. What
seemed like a brilliant idea for scoring speakers on their potential for
sending the audience to sleep, turned out to be a much less fun attempt to
identify which latest government stupidity was most likely to keep managers
awake at night. Pity. I stopped going to conferences when my personal Insomnia
Index fell to zero the moment anyone dimmed the lights and clicked onto the
first Power Point slide.
South Africa’s candidate for the top job at the African Union failed to win a
majority and her staff came up with an ingenious excuse for why this was just
as good as winning. I was more interested in the surroundings in which all this
was taking place. The Chinese have very kindly and generously presented the
continent with a $200m glass and marble palace in which to hold their
deliberations. African officials insist that they were not being manipulated by
the Chinese. Oh really? Just try selling your minerals to our other new best
friends in the BRIC.
Even if SA does not get to host the Square Kilometre radio telescope
Array, there is really exciting news from the fellows at Joburg City Power.
They are planning to use “low pressure solar water”. Sadly I will never learn
exactly what this scientific revolution is since the explanatory document for
persons wishing to tender for the supply and installation of this wonder costs
R2000 (non-refundable) One would have hoped that the discovery of water on the
sun would have raised more interest.
At least more than the African Cup of Nations is raising. How’s that
idea for a white card in rugby ?
James Greener
3rd February 2012
