The JSE All Share index is back to where
it was 8 months ago, around the 52 000 level. Between then and now we have seen
46 000 (in October) and 53 500 just a few weeks ago, but that does little to
capture the wild gyrations in between. Hopefully a few traders may be happy,
but there will be many who will have retired hurt. Investors, however, should
take note that the proportion of companies reporting moderate or even severe
declines in earnings is increasing. It
is always hard to sell especially when there are no great alternatives to the
share market; nevertheless it does seem like a suitable time to review
liquidity levels with an eye to nudging them up a bit.
Several commentators have already noted
that the problem with stories in South Africa on April Fools Day is
that it is nearly impossible to distinguish the real from the ridiculous.
Virtually every one of the utilities owned by the state and managed by its
satraps is in the midst of a dreadful drama which no writer could have ever composed.
Furthermore they are interwoven in cunning and mystical ways. The SAA has not
been paid by the post office and so will no longer carry any airmail. National
Treasury is withholding municipal grants because those entities have not settled
their bills for lights and water. The SABC will soon be unable to reach its
audience because the ministry can't make up its mind about how to divide the
spoils. The king moans about hard working foreigners displacing locals and then
expresses surprise when his subjects attack the poor souls. The outfit
responsible for building and maintaining the national road system is forced to
reveal that it is hatching a plan to levy punitive tolls around Cape Town. And students
claim that a 100 year old statue on their campus causes them unbearable pain
and demand its removal. Even this last tale is not a joke.
Finance Minister Nene seems very confident
that he is going to bank R23bn from the sale of various items from the state
storeroom in the next few weeks. This sounds like a really good idea but it is
fraught with difficulties that will be interesting to watch develop. So far his
confidence has not yet extended to announcing what goodies are being sold or
who he believes the buyers will be. Furthermore his valuation of the assets may
exceed what those buyers are contemplating spending. And the biggest spoke in
the wheel is likely to be the understandably noisy reaction of the employees
when they are told that they will be leaving the security and comfort of the government
payroll. Private owners have an unfriendly habit of requiring a profit margin.
Nene’s problem is that Eskom very badly needs that money. If nothing else there
are leaving presents to be purchased for virtually the entire board of
directors.
As if by magic, the Sharks are top of the
conference and third overall. It all seemed so unlikely just a few weeks ago.
This resurgence has however caught the eye of the SANZAR bigwigs and they are
nitpicking their way through the rule book seeking ever more draconian sanctions
for already punished offences. Shocking stuff. We Proteas fans can be quite
sure that without the midnight selection intervention of a pigheaded politician
valuing ideology over national pride, we would have ensured a much more
exciting and competitive World Cup Final than was provided.. And I trust you
noticed that following my wish last week, Ferrari did indeed score a win.
You’re welcome.
Have a safe and happy Easter weekend
James Greener
Thursday 2nd April 2015
