Jun 30 2009
When local is lekker and foreign not
TheBigPond was born out of the “insight” that SA’s mainstream media were underestimating the importance of what SA managers were doing on the global stage.
Look at every SA financial news medium and you’ll see “international news” tagged on at the bottom of the page. The “other news”. Even though SA businesses are very busy on the international markets. And are continuosly growing the foreign shares of their total turnovers.
One would expect the SA media owners to notice this trend and re-deploy their resources (journalists) to reflect the growing importance of what’s happening abroad…
To remind you just how important SA companies with global aspirations are, I give you a few quotes from a story about the drive (by the SA Reservebank among others) to get SA companies with primary listings abroad reclassified as “foreign companies” (published on Fin24.com):
JSE chief executive Russell Loubser says that every citizen in the country would be affected (should these companies be redefined as foreign), and that there is at present a very poor understanding of the possible consequences.
The companies that would be affected are among South Africa’s largest, and reclassification would mean that they would no longer be constituents of the South African share indices.
This could remove 37% of the JSE’s market value in one fell swoop. Loubser says it would make the JSE both irrelevant and illiquid.
The shares of the companies that would be affected number among the top 10 trades in value every day.
Stockbrokers says the step would wipe out the broking industry in South Africa. “If brokers can no longer trade in these shares, what would they trade?”
If companies like Anglo and Billiton are traded as foreign entities, foreigners would have no further reason to invest in South Africa.
What is more, the JSE’s earnings would be seriously impacted. Reconstitution of the portfolios would destroy the companies’ share prices, as there would be so many forced sellers of specific counters.
Here the full story.
Irrespective of what finally happens (whether they are reclassified “foreign”, or not), they are important and their foreign operations are growing ever more important, making it ever more important for local investors, analysts and the public to know about the news they make outside SA.
…in case you were still in doubt.