With just
one week of April left (and it’s a short one at that) the All Share is barely
1% better on the month but the dispersion across the various sectors is huge.
Some mining shares are up over 20%. This is another piece of evidence that the
dreadful and prolonged slump in commodity prices may be over. What isn’t over
are the arrangements for the merger of Anheuser Busch In Bev and SAB Miller.
Many parties, particularly SAB management are anticipating substantial
windfalls when the deal is finalised, but this news has caught the attention of
employees less highly placed on the food chain and they are threatening to
derail the process unless they too share in the bounty. Those of us who also
forgot to buy SAB a few years ago share their frustrations.
One of the
saddest developments in our country in the past decade has been the rise in
officially practiced and condoned racial discrimination of our citizens.
Together with unpunished outbursts of terrifying hate speech and near
treasonous incitements to violence, it is not just Number One who is in
contempt of the Constitution. The possibility of all South Africans getting the
country we were promised is fading.
The present
government has resurrected the immoral and inhuman race classification criteria
in order to identify people who it believes should benefit from a political
allocation of resources. That now nearly half of the country’s millionaires are
from a previously disadvantaged background shows that this policy has certainly
worked for the well connected. But there are problems and issues with this
redistribution program
For example,
the percentage of black-owned shares in a mining company may never fall below
26%. Therefore, if a sale by a “black” investor would cause a breach of that
limit, the seller must hold off until a bid from a sufficiently “black” buyer
appears. Bids from “white” investors cannot be accepted. The seller is
immeasurably disadvantaged all over again. The market’s reaction will be to
have two prices for the same thing. Ironically the “black” market price will
generally be the lower. This is already happening with the listed “blacks only”
counters on the JSE. Surely this is not the state’s intention?
The purely
practical difficulty is that the investment industry (like all law-abiding
entities) does not record the race of each of their clients, customers and
shareholders. To do so would mean that someone would have to meet and classify
each client which would be an impossible and illegal task. And further, the
race of an investment fund is meaningless. But despite these facts, every day
brings news of further edicts which apparently have been compiled mainly to
hassle, hamper, hurt and hinder a shrinking proportion of the population which
poses no threat to government power but ironically supplies it with most of its
money. It is as we said at the outset, so sad.
There was
recently a meeting in Washington of most of the world’s finance ministers and
central bank governors. It would be fascinating to learn what this crowd
thought of the fruit of their labours on the global economy. Negative interest
rates, deep recessions, volatile currency exchange rates and widespread poverty
and unemployment are hardly chapter headings for a success story! Only half a dozen of the 100 or so delegates
posing for a rather overcrowded group photo are not in suit, collar and tie and
they are all women. But that small group does include the two most powerful
people there. Namely Mesdames Yellen and Legarde who are among the handful of
heavy hitters seated in the front row, of which our own Governor Lestja
Kganyago occupies the end seat. Goodness. “Respect” as they say! But perhaps he
was just late for the photo session and the bleachers were already full.
The mood at
the bowling club bar will be a bit lighter this evening with the amazing last
minute victory achieved by the Sharks this morning in New Zealand. Fortunately,
there are no Cheetahs fans to rain on the parade. This rather unusual
scheduling with two SA sides completing their weekend fixtures before the
Friday beer is quite unsettling.
James Greener
Earth Day 2016
