Economic review


Taking a broader perspective, the IMF has predicted a 3.4% global economic growth for this year. Sub Saharan Africa is predicted to grow at 4.2% and South Africa at 0.7% (but see below).

It is interesting to see that China’s economic growth is forecast at 6% plus. China needs a 7% economic growth if it is to reach its intended goal of building a moderately prosperous society by 2020. At the same time it is now said that China had fudged its economic growth figures in the past. Hence there is some scepticism as to the actual growth that will be attained in China.


At home the BETI report simply confirms that South Africans are consolidating and the reducing their debt levels and are reluctant to take on new debt.

Our new/old finance minister will seek to “surprise” the IMF and has stated that we should see what can be done differently this year to attain greater growth than expected. Amen, but I wouldn’t hold my breath. Factually, many of those who invested here have voted with their feet. Our foreign direct investment into South Africa fell 74% last year and the price of capital will become more expensive.


The Sake24 consensus economic forecast has been published. Notable are a few of the predictions:

  • Real GDP growth                             1.5%      Compare this to the IMF figure above
  • Rand/Euro exchange rate              14.8
  • Rand/Dollar exchange rate           13.8
  • CPI inflation                                      4.8
  • Prime lending rate                           9.6


Business review


WhatsApp is reported to be exploring doing away with its current approach that it asks for users to pay $1 per year. The intent is to provide its services free. One wonders, given that it intends remaining ad-free, how its business model will work.


It had to come: Master Drilling is set to unveil a shaft sinking machine which will revolutionise mining. The mining move to machinery has begun in earnest.


An optimist would buy shares with the intent of selling when the value of the shares picks up. What does one do when the market is in a bear phase? Sell short. Betting on declines is proving very profitable at present says Markit.


An interesting article on our economic structure, written by Michael Power, a strategist at Investec Asset Management, was published this week. He says that we use a demand-side valuation methodology to determine our currency’s fair value (the purchasing power parity model). In a world characterised by oversupply, we should be using a selling power parity index. Theory no one applies. What I found interesting was his statement that our Johannesburg Dollar wages to be way out of line with emerging market peers i.e.: 3 times that of Mexico, 4 times that of Manila and 3 times that of Bogota. Amongst our BRICS compatriots we pay much higher dollar wages than do Moscow, New Delhi, Mumbai and so on.


Property review


It is quite interesting to compare the institutional take on our residential property market compared with that of agency groupings. The former takes quite a bleak view of property prices this year. Fitch, for instance, has predicted that there will be no real house price growth this year and says that a decline of about 3% next year may be expected. This is more or less in line with the predictions by/FNB and the like. Absa goes even further by saying that it expects a slight drop in property prices in real terms.


It appears that price growth might occur in isolated pockets such as secure lifestyle estates and so on.


However, it is an ill wind… with home loans becoming harder to obtain, TPN predicts an increase in demand for residential rental properties and subsequently higher rentals. This, ultimately, may encourage buy-to-let investors.

TPN says that, nationally, the yield on gross property rental is currently 8.3%.




Status of settlement agreements made an order of court


Ordinarily the purpose of a settlement order is that, in the event of non-compliance, the party in whose favour that order operates, should be in a position to enforce it through execution or contempt proceedings. An order made, pursuant to a settlement agreement, is an order like any other and the terms of that settlement agreement becomes an enforceable court order.

Eke [2016] JOL 34112 (CC)


Divorce settlements limiting rights to deal with property


If a settlement agreement has been reached that, the owner of a property requires her ex-spouse’s consent to the selling price of a home, she cannot sell the property.

Pieterse [2015] ZAGPPHC 815


Voetstoots & silence


A latent defect may, broadly speaking, be described as an abnormal attribute, which substantially impairs the utility of the item sold, for the purpose for which it has been purchased. In this case, a property which was sold was found to be subject to a road servitude. The seller failed to disclose this to the purchaser, which failure was found to amount to a fraudulent concealment of the truth, made with the intent to induce the purchaser into entering into the deed of sale. In such circumstances the purchaser is entitled to rescind the contract. If such a misrepresentation was fraudulent or negligent the purchaser may also be entitled to damages. In the contract of sale there is a duty on the seller to disclose latent defects of which he is aware.

Ismael [2015] ZAGPPHC 835.


Mortgage bond for balance of purchase price


We often are faced with parties selling a property where the purchaser cannot obtain a bond. The seller then proceeds to give the purchaser credit and wishes to secure that credit by way of a bond. In a recent case such a bond was declared invalid and, ultimately, the underlying contract also, because the seller was not registered in terms of the National Credit Act as a credit provider. Be careful

La Mer Jeffreys Akkomodasie BK [2015]’s JOL 34617 (ECP)




We buy things we don't need with money we don't have to impress people we don't like. Robert Paulson


Weird and wonderful


Zimbabwe has an interesting dilemma. It cannot find a hangman. There are at least 18 prisoners languishing on death row who have been waiting between 4 and 18 years for the privilege of being put to death. Surely there has to be a white extremist somewhere-- if we were to ignore BEE…


In the next few weeks until February 20, we will be able to view 5 of our solar systems planets – Mercury, Venus, Mars, Jupiter and Saturn in so-called “planetary alignment” before dawn. You need to wake up 45 minutes before sunrise to see the event in the South East. Wait for the pseudo-science predictions.


The idea of “social cohesion” has its roots in Canada where, it is said, white intellectuals, nervous at the increasing diversity of society, wanted to assert their culture as the norm to which immigrants must conform. Social cohesion is, therefore, at its heart, a conservative concept, demanding conformity.


Another interesting aside is the AbaThembu who refuses to eat pap, wear a prison uniform and so on. Fortunately, given that he still draws a salary as King, he is able to afford a private hospital (does this not remind you of someone else who set the tone in this respect?).


Interestingly the last two years saw a drastic decline in motorcycle sales. This is attributed to motor biking catering for mainly a leisure market and with bikes becoming subject to homologation rules (emissions issues). Given that all motorbikes are imported, we can expect to pay drastically more for new motorbikes with the drop in our Rand exchange values. Buy one now.


Racism has become news. One of the few level-headed notes on this subject that I have recently read suggested that we should all back off. By way of example, to criticise Zuma has now become a racist sentiment? We are all too sensitive about this issue and should really take a break.


Lighten up


De mensen worden met de dag kritisher, klaagt een handelaar in levensmiddelen. Ze bekijken een kip vijfmaal, betastenze en besluiten dan uiteindeliok om ze tocht maar nie te nemen. Ik weet wat je zegt, antwoordt de klant, ik hebt drie huwbare dochters.


What do you call a smiling, courteous person at a bar association convention?

The caterer.