The company results that are coming out here at the rump end of the
December year-end reporting season appear to be somewhat less stellar than
those who crowed earlier on. Some doubt has crept into the mind of the 4 month
old bull calf and the All Share index sauntered off briskly below that 34 000
level. It was certainly a nice run up until then and largely missed by us bears
who like to do most of their buying at historically tempting valuations. The
last such opportunity was in 2009. The next one will be in…Well, who knows; but
it isn’t here.
The really interesting instrument is our currency which is fast
recovering from the slump it suffered in the third quarter last year. There are
more buyers of rands than there are sellers and this can’t be all because folk
want to collect samples of the old “Big 5” currency notes before they go
extinct. Neither can lower imports versus exports be the reason as the exact
reverse is happening with a vengeance. The 12 month rolling trade balance is
now at a 2 year high deficit. We are sucking in the imports – largely iPads by
my observations! It must be that foreigners are coming back and buying anything
that isn’t nailed down. And perhaps some stuff that is.
Up in Greece
meanwhile everyone is getting ready to play a round of debt swap. Whatever this
means exactly, when it is finished there will still be some winners and some
losers. The winners are those who pocketed the loot, no questions asked.. The losers get to lend Greece even more
money. In these days where the buzz word is “sustainable” – that model doesn’t
sound as if it is.
In the light of faintly hysterical and foolish waffle about SA and Nigeria
fighting to be the continent’s economic giant, it is useful to note that here
on the southern tip we are gently and happily showing what matters most. The
two largest listed companies on the JSE are now a cigarette manufacturer (BAT) and
a brewer (SAB Miller).. The days of mining and industrial behemoths dominating
the Johannesburg
boards are fading away in a haze of tobacco smoke and beer froth. Standard Bank,
our largest financial sector share has a market cap just one third the size of
SAB and Sasol, that unique and outstanding all-South African energy business,
is also just one third the size of BAT. I wonder if the medical sector is
undervalued?
An important election looms for us South Africans. It is to choose
the Team SA mascot for the London Olympics. Cast your ballot by magazine and
cell phone. Isn’t democracy wonderful? Once that is out of the way, an even
more worrying matter is the design of the opening ceremony outfits. The
committee hopes that 100 or more athletes and an unannounced but probably
larger number of officials will need to be clothed. A very dodgy forecast calls
for as many as a dozen medals. That too, however, is causing headaches since
the committee has yet to find the R50m required for incentives for the medal
winners. Apparently in 1996, gold medal winners each received a R1m present
from the tax payers. Well good luck
anyway to those focussed and dedicated souls who are putting their all into
qualifying in their chosen sports. You are welcome to anything you can wring
out of National Treasury. Most of the rest of us cant.
It is not that long since the Lions smashed the Sharks and claimed
the Currie Cup, so feelings are running rather high down here in the kingdom as
the two sides meet in the Super rugby fixture this weekend. My Christmas
present of a Lions Cap will get its first official outing and based on what I
saw at Newlands last week the Sharks are set for a hat trick of losses. I may
have to buy my own drinks at the bowling club this evening.
James Greener
9th March 2012
