The All Share index started off the year
with a triumphant and dramatic surge through the 46 000 level. It peaked out
seven months later at just over 52 000 and then pleased and teased the bears by
plunging back to the opening value in mid October before bouncing back
considerably. That bounce may however be running out of steam and it would take
a mere 2000 point drop in the next fortnight for the index to end down on the
year. This would be sad but not unexpected.
A great many ducks are standing just too far out of line for any
reasonable arguments for a bull market to sound sensible. The rand, the rating
agencies and the refusal to recognise a crisis are three interlinked reasons for
the bear to take heart.
As usual the deluge of data that confronts
the investor every day from both the official sources and the companies is very
mixed and seemingly trendless. Bulls and bears alike are therefore equally able
to make their cases. It may be worth noting that several property companies
have recently come to the JSE to raise funds and seek a listing. These people
at least think it’s a good time to be selling shares. Interestingly at least
two of these funds have considerable portfolios of non-South African
properties.
No
matter how the apologists for and supporters of the new regime try to explain
otherwise, the plain fact is that far too many state-owned and run institutions
are unable to deliver what we need in order to be a winning country. Presumably
someone somewhere is keeping a spreadsheet (thank goodness for computers) that
tracks the procession of clowns as they rotate through the posts of chairman,
board member, CEO, COO, CFO and security guard at the many parastatals. A second worksheet will be
needed to join the lines of patronage, family ties and cronyism. And a third
will be useful for recording the lies and deceits about education, experience,
achievement and performance. Any idea of keeping a record of the flows of money
in unusual directions will collapse because most of the numbers will cause
overflow errors.
Also supposedly overflowing are
warehouses around Joburg being used to store the assets of Muammar Gaddafi,
once President Jacob Zuma’s best friend. This now deposed and deceased previous
leader of Libya is rumoured to have entrusted the care of a great deal of his
wealth to South Africa. This is a fascinating story but one that may turn out
either false or badly. Custodians of valuable things are easily tempted and
there may be great disappointment in store when the key is turned and the doors
to the vault are thrown open. Noticeably, JZ’s newest best friends Presidents
Xi and Putin are sending nothing here for storage except pieces of paper with
their names on them as well as Jacob’s and perhaps a deposit slip for a bank in
Lichtenstein. What do you suppose those two very serious power players think
after our man and his wife of the day waddle up the stairs into the welcoming
interior of the executive jet that whisks them back to Nkandla?
The government proposal to put a levy on
the purchase of every electrical appliance and gadget is uninformed and very
poorly timed. Undoubtedly there’s a problem with the proper recycling and
handling of all the potentially valuable and hazardous gizmos that we toss out,
but money collected by such levies is not usually ring-fenced for the promised purpose
and disappears into the maw of general state spending (e.g. the fuel levy)
Secondly, to raise this matter when we are not getting enough electricity to
run anything is pretty tasteless.
Lets hope the Sevens lads don’t trip up
against Wales
like the ‘bokke did recently. It’s a great sport to watch if you can remember
to turn on at 19:58 tomorrow evening in time to catch the 20 minutes of frantic
action. Nevertheless it will still be much cooler in PE than at Leopard Creek
where the Dunhill Championship golfers are facing mid 30s today! That should
thin out the field.
James Greener
Friday 12th December 2014
