It’s obviously been a tough month for
many people. Beverages, tobacco and pharmaceutical shares have been amongst the
better performers in the last few weeks. Investors would appear to be banking
on demands for seeking chemical help. With the unbundling by Billiton
of a number of assets into a new listed entity named South 32, there is now no
mining share in the top three on the JSE ranked by market cap. Naspers joins
SAB and British American Tobacco on the podium. These are historic and
significant events in the commercial development of our country. Sad too.
Fanatical equity bulls will not be
impressed with the news that actually in the past 12 months the level of the
All Share index has more or less been matched by the price of Krugerrands. Only
the dividend flows has distinguished shares as the better asset since this time
last year. And here we were thinking we were still enjoying a bull market. Be
careful out there, it’s getting very slippery.
A few weeks ago when the government’s
fiscal year-end numbers were announced, there was a modicum of back slapping
and self congratulation about how well they were doing. It is indeed true that
the figures reveal that government income (from tax and such like) is growing
at a rate just over 10% pa, compared to expenditure growth of 8%pa. In the
highly unlikely situation that these trajectories were maintained it would take
about half a dozen years to reach a balanced budget. However, the state is now spending
just over R3bn per day, half a billion of which is not covered by income and
needs to be borrowed. This must be a powerful incentive for National Treasury
to make the occasional call to the Reserve Bank to urge them not to be in a
hurry to raise interest rates. And so apart from the demolition of several
packets of Romany Creams the Monetary Policy Committee left the repo rate
untouched at their meeting this week.
Governor Kganyago did ramble on with the obligatory jargon about risks
and stances and hinted that if (when?) Eskom get permission to punish us with
another huge increase in the price of electricity then that might also be a good time to increase the
cost of credit.
The Department of Home Affairs has
launched a “premium” centre for senior executives to apply for visas and permits.
Apparently available only in Sandton, the application process takes no more
than 10 minutes and the wait for the visa or permit has been slashed to only
four months! Apparently junior executives have to wait eight months or more.
How our bureaucrats distinguish between senior and junior is not explained
although presumably money comes into it. Outrageous. Do they do this stuff by
hand in the dark? Oh wait yes perhaps they do.
Once again waves of foolishness washed
across our country. A very expensive
permit is required to fly a model aeroplane but only if it’s called a drone. If
you lie to the government about your qualifications when applying for a job you
can be put in prison. A soccer boss was made the mayor of a city who never
voted for him but claims that he can do both tasks without any detriment to
either. Our totally insolvent national airline pledges to spend money it
doesn’t have on buying stuff from companies that don’t sell it. And Durban was in turn
embarrassed when it failed to provide a blue light escort for a VIP and
delighted when a far more famous overweight hotel cat returned after an
unexplained short absence. Africa is not for
sissies or for those without a sense of humour.
I rather hoped to be able to boast that
this edition of tidemarks was being composed on the after deck of the yacht
moored in Monte Carlo harbour overlooking the
Formula 1 practice sessions. However, the weather in Monaco
is too rainy to be outside and anyway I’m still in Durban fuming over Eskom’s “ideological path”
which shed my load and prevented me from watching a rare Sharks victory this
afternoon
James Greener
Friday 22nd May 2015
