It’s been 4
weeks since the last edition of Tidemarks and a careful study of what has
happened in the markets in that time reveals little to write home about.
Perhaps in the last few days the JSE has taken on some of the sadness that the
rest of the country is feeling after the death of ex-president Mandela. The
currency in particular is rather weak and against the pound sterling and the
euro it is now lower than it was even in the 2008 crisis. What that means is
that those of us still living in this dangerous but excitingly beautiful place
will soon be getting emails from hitherto dismissive relatives demanding to be met at the airport and ferried to a
place where they can watch lions and elephants while ordering beer at less than
a quid a pint!
Nevertheless
despite this holiday time softening, the All Share index will still come in
with a total return for the year of almost 20% which just about its long term
average. Strip out the mining shares and it’s way better than that. The
market’s industrial sector is growing earnings and share prices at a much faster
rate than the GDP figure released a few weeks ago would like you to believe.
Those of us who spent most of the year warily expecting the wheels to come off
this bull market are totally discredited. Even without any especially good news
about stable educated workforce, predictable business-friendly political
climate and growing domestic and export markets, investors could not refrain
from paying more and more for shares of companies battling with the converse of
all those things. Being invested in the JSE has proved a so much better place
for money than languishing in a bank account.
There fad of
appointing directors and even executives with little or no knowledge and more
importantly experience of the industry into which they are parachuted is not
always a success. Champions of this practice are probably found mostly not
running big successful businesses. The government is also very keen to see
people in jobs where their reward far exceeds their contribution. The JSE has
long embraced the practice and even in the days before its de-mutualisation there
were non stock brokers on the Committee.
Most of these “external members” pitched up only on the day of the official
photograph. Today the JSE is itself listed on its own boards and profitability
for shareholders obviously comes before service to members. That this is true
is shown by the appointment of a chairman who offers many skills, attributes
and experience but unfortunately none of them appear to have been acquired in
stock broking. Of course we all wish Ms Nonkululeko Nyembezi-Heita the very
best in her new appointment but ask that she does take great care of our old
and fragile exchange which is in great danger of being crushed by regulation
and unimaginative bureaucracy. Watch the share price.
All this fuss
over an interpreter who translated politician-speak into gibberish seems
overdone. Just look what the poor man is usually required to translate at party
rallies and government gatherings. The computer world has long had an acronym
for it. GIGO: Garbage in, garbage out.
Is anyone else
uneasy with the outcome of some of international cricket matches played against
teams from the sub-continent? There are frequently some amazing swings in form
from one game to the next. The press
dutifully repeat the breathless warnings about the strength and potential of
this or that team about to face the Proteas, but not long after the toss, the
threats disappear. Or is it simply that our boys are just so very good?
James Greener
Friday the
thirteenth. December 2013
