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Archive for December, 2008

Dec 19 2008

Until next year

Published by under Opinion,Top Stories

Dear blog,

I’m about to go on holiday. Will be back on 12 January. When the two of us will rock ‘n roll again. Take it easy until then. 

Christo

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Dec 16 2008

Dark, darker, pitch-black

Published by under More News,Opinion

I have never read a newspaper with more bad news in a single issue than this morning’s Financial Times Deutschland (FTD). And bad news not of a trivial kind, but of the big, system-endangering kind. 

At least the bankers will have food on the table this Xmas time.

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** The articles from Wikinvest below this post of mine, pull in automatically. And I noticed at least one very negative article pulled in. I don’t like these alarmist kind of stuff. (Of course, I don’t view what I wrote above as alarmist, but as sober, informed observation.)

I’m reconsidering my participation with Wikinvest, the global network of business blogs I belong to for sharing articles.

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Dec 15 2008

Two SA managers conquer Europe

Published by under Companies,More News

I missed this bit of news early in November. Should nevertheless be on my blog and no better time than now.

It’s about awards for management excellence won by two South African managers in Europe. Go here to see who I’m talking about.

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Dec 13 2008

About money and press freedom

Published by under Companies,Top Stories

In 1979 I was working at Rupert International in Stellenbosch, when I had to help prepare for an “important meeting”: Anton Rupert had summoned the then-editor of the weekly Financial Mail (FM) to Stellenbosch to “remind him” how much money Rupert spent on advertising in the FM and to “point out” to him that his publication had only been writing negative stuff about Rembrandt and its related companies for who knows how long. And to “remind” him that advertising spend can always be cut. [Read on]

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Dec 13 2008

IAM targets Japanese investors

Published by under Companies,More News

Shinsei Bank, a bank in Japan, will help Investec Asset Management (IAM) market the IAM managed rand-denominated money market fund called The Horizon Trust in Japan.  

According to this report, the Japanese might be attracted by the high interest rates earned by money market funds in SA (relative to what are on offer in Japan).

Japanese investors will be exposed to the currency risk, however. Let’s hope they don’t read my blog.

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Dec 13 2008

Intsaki buys stake in UK listed company

Published by under Companies,Top Stories

The black empowerment group Intsaki Consortium acquired a 26% equity stake in WSP Group Africa (Pty) Ltd, a subsidiary of LSE-listed engineering services provider and construction project manager WSP Group, for 3.5 million pound sterling. Investec Private Bank was Intsaki’s financial backer. [Read on]

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Dec 13 2008

Anglo’s Cynthia Carroll trims the fat

Published by under Companies,More News

Since becoming boss at Anglo American, Cynthia Carroll has concentrated on trimming fat. And she’s done a good job of it, reckons Charles Cooper, mining analyst at Evolution Securities.

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Dec 13 2008

Why I’m so negative on the rand – Part IV

Published by under More News,Opinion

This article was first posted to my old blog on 10/12/2007. I’m republishing it here as part of the on-going migration to my new blog. 

I’ve alluded to the “frail-Mandela factor”, the “populist-Zuma factor” and the “let’s-get-rid-of-Trevor-Manuel factor” as grounds for being bearish on the rand in the next 12 months. There are more reasons for being negative, of which the most important is the “let’s-get-rid-of-Mboweni factor”. This factor has the potential to destabilise the rand in the coming months like no other. 

(And strangely, to date the SA media have hardly mentioned it….) 

Tito Mboweni has been president of the SA Reservebank (central bank) since 1999 and has done an excellent job protecting the value of the rand, which is the primary goal of the central bank according to section 224 of the new Constitution of South Africa. 

The president of the SA Reservebank is appointed by the president of the national government for a 5 year period. Mboweni’s second 5-year term will come to an end in 2009, but the decision about the renewal of his contract for another 5-year period will most certainly have to be made already in 2008 – while Mbeki is still in the chair. 

How this decision is made and who is appointed as president of the SA Reservebank for the period 2009 – 2014 could be a major destabilising factor for the rand throughout 2008 – if it’s not handled carefully. 

For instance, if Zuma is selected as ANC president in the next few weeks and the appointment of the president of the SA Reservebank is NOT made by Mbeki next year, but postponed until Zuma is in the chair, this will make the forex markets nervous no end. 

And then, of course, there is the scenario where he is not appointed again, but a “more populist” candidate is appointed instead. Now, that would really cause instability. The worse case scenario: Trevor Manuel and Tito Mboweni go within months of one another. 

No, no, there is still another (even) worse case scenario: Mboweni, Manuel and Mandela all leave the stage within a few months of each other. But, let’s not sound alarmist. 

I couldn’t find anything in the Constitution, the Reserve Bank Act, or the regulations thereto, prohibiting Mboweni from accepting a third term. As far as I could make out, Mboweni could go on as long as he wanted to. And really, there is no reason to throw out a man who obviously knows what he’s doing. And is still very young. South Africa simply hasn’t got so many “potential central bank governors” hanging around, to just throw Mboweni out – and with him the government’s hard-won market credibility. 

Nevertheless, at this point it seems very, very likely to happen. In fact, in the next 18 months South Africa could be without it’s 2 best functionaries in the Mbeki era, namely Manuel and Mboweni. 

If the prospect of this happening doesn’t make the forex markets nervous in coming months, I’ll eat my hat.

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