HAPPY NEW YEAR

There is little need to waste much space wondering why the cabinet minister in charge of our police should be spending Christmas in Dubai; or why the BBC needed to get a prince in to interview an ex-president; or how a humble pastor manages to drive a sleek and  expensive coupe; or if JZ knows where the money will come from to pay almost all student fees; or what the mortgage holders (i.e. the banks) think about a policy of land seizure without compensation; or what is the true value of a Bitcoin?

And the really serious stuff like Cape Town taps running dry, and Durban motorists being killed by rocks dropped from bridges will also not be solved in 700 words

The Proteas’ demolition of Zimbabwe in a so-called cricket test (4 days, pink ball!) has left most of us wondering what on earth is happening in the corridors of sports administration. All we can cling to is that there may be a South African taking part in the Winter Olympics skiing events.

So I wish you a safe, healthy and comfortable New Year, happy in the knowledge that when it comes to displays of incompetence and foolishness by those who regard themselves as superior to everyone else, the best is still to come.

Thanks for reading.

James Greener

Friday 29^th December 2017 (My buddy’s birthday)

LITTLE TO SHARE

If this writer were a proper analyst he would be mining the price charts and company reports for insights and hints about which sectors and shares to pick in 2018. There are many reasons including apathy and cynicism why this is not happening. A significant development in the past few years is the “hollowing-out” of the JSE as the number of listed companies which might be considered “blue-chip” dwindles. That blue-chip label is dangerously misused since currently few large local companies seem to be able to find and develop a sustainable and winning business model in the face of government regulation and international competition.  While the newly opened local exchanges are not yet posing a worrying threat to the JSE, its own boards are shrinking with at least half a dozen sectors having just a single member. Steinhof, as the sole constituent of the Household Goods index, which is down more than 90% this month, is currently the most notorious example. Hopefully the numerous smaller unlisted players in this sector are doing far better.

Another anomaly is that despite the ridiculously long list of new car models on offer in this country and the ceaseless flow of huge and apparently fully laden car carriers in and out of Durban harbour, the JSE’s Automobiles sector contains just Metair, a small R4bn market cap parts supplier. One can’t even get exposure to the profitable fuel supply business. And given the crying need for a new refinery capable of producing fuels that modern engines prefer, it’s odd that no one is thinking of a listing to raise that sort of cash.  Our bourse is not a good proxy of the economic landscape and so investors are mostly just looking for special situations.

Which is exactly the position in which the new leader of the ruling ANC party finds himself. Whilst no actual chairs were launched at the interminable conference, Mr Cyril Ramaphosa’s victory obviously surprised many who thought that Number One’s ex-wife was a dead certainty for the job. However, the old guard seem to have managed to surround the new chap with a coterie of “minders” but Jacob Zuma still faces the unexpected and uncomfortable position of being president of the nation without a trusted ally as the head of the party. How long that will work, is already cause for fervent speculation.

Cyril, in turn has been lobbed some early hot potatoes. The parting shot in JZ’s valedictory address was a promise of free university education while the congress delegates instructed him to legalize fixed property theft. Oh, and the comrades would very much also like to own the SA Reserve Bank. Presumably they think it’s full of cash. Or that it will be handy to take charge of the pesky bank supervision department?   None of these ideas will help to sustain the 10% strengthening of the rand against the US dollar that happened when news of Cyril’s victory was first leaked.

But it’s year’s end. The solstice was last night, and Christmas holidays are confirmed by the migration count of over 3000 cars an hour pouring down the N3 and into Durban. Parking at the shops is already inducing seasonal outrage.

So please have a very merry happy and safe Christmas.

James Greener

Friday 22^nd December 2017.

COUNT DOWN AND CAN’T COUNT

It was very touching how many readers noticed that Tidemarks hadn’t appeared for a few weeks and sent solicitous emails. Thank you for your concern but the hiatus was simply because I was away on 4 successive Fridays. And so, today’s problem is what to leave out. The craziness has been rife these past few weeks and includes a political crescendo and a business fiasco. Somehow these two have become enmeshed.

This weekend the innumerate, illiterate and morally deficient but genial and charismatic dancing JZ ought to be relinquishing the presidency of the ruling party. The process of choosing a new leader of the ANC is complicated. Colourful graphics have been published detailing the bone-achingly correct and proper democratic steps that are required to ensure that the victor is truly the party members’ top pick. Unfortunately, not only does the process drag on but it is open to abuse and doesn’t take into account the passions that have been aroused by the opportunity to board the gravy train and to defenestrate those already seated. The new leader of the party will almost certainly become the new President of the country when Number One retires in 2019. With a prize this large the violence has included many assassinations, several chair slinging contests, simple fisticuffs and all too often expensive shouting matches in court. Hapless judges caught between a rule book and a conference start date have been dragged on to their benches to be droned at by over-paid counsel about infraction of process.

Those citizens who are not members of the ANC can merely watch in terror as the lacklustre candidates are trotted out for inspection. Perhaps the least appealing candidate is JZ’s ex-wife, handily tagged as NDZ (look it up) who has used the campaign to launch an offensive attack on all whites who she claims have been stealing since they first arrived on the southern tip almost 400 years ago.

While manifestly wrong she was almost immediately presented with a fine example of her assertions when the (white male) CEO of Steinhof, the listed industrial behemoth, slipped out of his office leaving a note of apology for any inconvenience caused and admitting that the soon to be released financial statements didn’t quite add up. Although there are a few investment analysts who now claim to have been worried about the company, most completely missed this very large fraud. As this writer has often remarked, company announcements are deliberately framed to conceal and obscure since no one needs the tax man or the competitors to learn too much. As for shareholders and staff, they are just collateral damage.

The “white monopoly capital” camp are squirming in embarrassment and anger not to mention smarting over the substantial sums that have been written off portfolio valuations, including the state’s own employee fund. This has spurred the regulators to gallop into an investigation and has raised enough dust to allow NDZ to slink away, so far unscathed by charges of racism or worse.

Hard on the heels of the news that SA women are the globe’s greatest binge drinkers and SA children are the worlds worst readers, comes the news that we rank first for school bullying. What a comedown after leading the world in areas such as share trading settlement and audit standards and compliance.

Many years ago, when all the stockbrokers had offices in the same building in Diagonal Street, listening carefully in the lifts used to be a great source of information. Further, the maxim was that when the secretaries and messengers started to talk about a share it was time to get out. Today’s version of that must be when the talk on the treadmills in the gym is about Bitcoin, the mania might be about to pop. The truth is that very very few people understand the distributed apps and block-chain structures that underlie these so-called crypto currencies. And even fewer have any idea how to value them. The inherent and deliberate so-called “censorship-free” nature of these developments is appealing and will in due course gain appreciation and traction. In the meantime, Caveat Emptor!

Equally byzantine is the procedure for firing a ‘bok coach (or an Eskom boss)

James Greener

Friday 15^th December 2017