Buyers on the JSE have demonstrated their
belief that companies are around 15% (after allowing for about 5% inflation)
more valuable than they were when the year began. The All Share Index has
tested the waters above the 46 000 level. But it is now very tempting to
suggest that the bull has now run out of steam. An important downside factor that
feeds us bears is the government’s seemingly deliberate and concerted attempt
destabilise the business operating environment. For foreign participants
particularly, the ground rules are being changed at a startling rate. Only
Minister “Red” Rob Davies can see how the scrapping of bilateral treaties with
major trading nations will comfort investors. Fresh from this disaster he is
terribly excited by the plan to “cleanse” credit histories and so deny lenders
some potentially useful and pertinent information about borrowers. This is very
foolish when already many parties on both sides of that transaction are in
difficulties. So-called unsecured credit providers are reporting an ever
growing pile of bad debts while deeply indebted borrowers are also struggling.
So much so that Minister Trevor Manuel pointed out that this was a factor
fuelling labour unrest. Don’t these guys ever talk to each other?
Does anyone in charge even read? It is
very frustrating to watch how in the face of all evidence and prior examples
the government still insists that South Africa will be converted into
a socialist utopia. Of course the
powerful glitterati have scant time for anything except for whizzing about
attending meetings and ceremonies that are invariably followed by lavish catering.
An amusing example of this apparently deliberate indifference to information includes
President JZ claiming that he had no knowledge that his nickname amongst his
staff is “Number One” and so the Number One who allegedly facilitated the
landing of a friend’s private plane at a military airbase was not him.
The picture of a burning toll gantry proved
that the southern tip is not alone in having aggrieved citizens. The green and forested
countryside next to the highway turned out to be in France where a few furious farmers
were demonstrating their disappointment with their government’s attitude.
Reportedly, however this act of arson caused them to change it!
There was huge
excitement at the New York
stock exchange this week when a new listing nearly doubled in price on its
first day. The company concerned was Twitter; one of these Internet based
so-called social media sites. At the peak it was being valued at around R300bn
which is bigger than Standard Bank. Now that I have a bit more time on my hands
I signed on with Twitter a few weeks ago.
After discovering that one can filter out all messages from the hundreds
of millions of bored teenagers, and also from anyone who wants to send you a
picture of their lunch, it turns out to be a rather interesting way of wasting
incredible amounts of time. The point, however, is that so far it has cost me
exactly nothing to participate and so it’s quite hard to see where all that
value in the company lies. Sell Twitter buy SAB.
Hopefully the
fellows at AECI who have just sold 1600 hectares next to their dynamite factory
in Modderfontein to a Chinese developer, have checked that no one buried a rejected
batch of product on the site. An unexpected bang could quite ruin the developer’s
plans to spend R80bn and build the “New York of Africa”. This would be a bargain
price for not even one run-down block in the Big Apple so something’s not
adding up. Nevertheless the artist’s drawings show that that style and grace
are not part of the design brief so Sandton might just be facing a challenge.
History and form are
on the ‘bokke’s side in their match against Wales tomorrow. Pity the match will
overlap the Proteas perhaps clinching the ODIs.
James Greener
8th
November 2013
