Economic review

Every year the consulting firm AT Kearney publishes a list of the top 25 destinations for Foreign Direct Investments. This year, not a single African country has made the cut, despite South Africa having been on the list last year.

Temptation? The Reserve Bank of Zimbabwe has decided to print own banknotes equalling 4% of the total deposits held by banks in Zimbabwe. The question on everyone’s mind is whether this will herald the return of the Zimbabwean dollar by another name; i.e. whether, when in dire straits, the government will be able to resist the temptation to print more.

The BETI (an index measuring bank transactions underR5m) has showed 3 consecutive months of marginal positive growth. Not great, but progress.

The IMF has said that bribery costs the world economy between $1.5 and $2 trillion per annum. This is tantamount to 2% of the global economy.

Business review

The SA Plastic Pipe Manufacturers Association has taken on the SABS for failure to fulfil its mandate in that it had not renewed plastic pipe manufacturers’ licenses. Whilst this is not breaking news and represents merely unpleasantness, the SABS has, for years, formed the backbone of quality guarantees in South Africa. If this institution stumbles…

The PIC has decided to invest in Independent Media. A black attempt to create Naspers? Whether this is good or bad depends on one’s perspective. On the one hand, any local investment is good; on the other one might not want this entity spending public money on a risky business?

The SAA chair wants to set up an employee share scheme for this SOE. Normally, giving away State assets would raise some concerns but, in this case, I reckon one should give it away wholly! As long as we don’t have to ever fund SAA again; frankly as long as it works – or doesn’t – few of us would really care.

Education export: it is said to be difficult for non-SA students to study here. One should compare this to both Australia and New Zealand, where education export, i.e. fully paid for degrees taken by foreigners, forms a major part of the generation of foreign currency. The fact is that we have a good product and can sell it, using the profit to fund local who cannot afford this themselves.

Our Minister of Trade and Industry has heralded in the 8^th iteration of the Industrial Policy Action Plan. He, correctly, says that all SOEs have to assist in addressing our structural economic problems such as those which prevent us from benefiting from commodity booms. The difficulty with such statements is that the instruments that he refers to are a part of our problem.

Property review

Since 2001 the cumulative SA house-price growth has been as follows:

Gauteng 286%;
KZN 320%;
Western Cape 290%.

Whilst this looks as if KZN is performing well, the poverty in this province is such that houses are relatively less affordable than elsewhere. Consequently we also have fewer rental tenants in good standing at 81%, compared with a national average of 85%.

Currently, on average, some 13% of sellers are selling owing to financial pressure.

The price gap between the cost of a new and comparable existing housing has increased marginally, but is still on a narrowing trend. Absa’s latest review reveals this to be some 22.1%. The close of these to become the more profitable it is to develop.

The average price of an existing house in SA increased by a nominal 6.5% for the 1^st quarter of this year with no real year-on-year price growth expected for the balance of the year. In fact, Absa says that the nominal house price growth will slow to 4.7% this year and 4.3 percentage next year. Not a great time to invest in housing.

Practice review

The KZN intra-provincial conveyancing tariff has been published by the Law Society. https://www.lawsoc.co.za/default.asp?sl=&id=1810

Cases

Amendments to offer to purchase tantamount to a counter offer

This is old hat but it happens often: an offer for the purchase of property is made and the recipient makes changes on the offer and “accepts”. If those changes are material, this amounts to a counter offer and has to be re-signed/initialled by the initial offeror.

Cooper [2016] ZAGPJHC 79

Access to a company’s securities register

Section 26 (2) of the Companies Act provides an unqualified right of access to a company’s securities register. A person’s motive for access is not relevant.

Nova Property Group Holdings SCA case 20815/2014

Quotables

Only entropy comes easy. Anton Chekhov

Comment

For the 1^st time in a while I have come across predictions that our current world financial situation is unsustainable. This source is Druckenmuller, one who cannot really be described as an optimist, who says that with the current low interest rates, investors are seeking yield and taking risks that they may not fully understand.

The Chinese government has banned “seductive eating of bananas” on webcams. Is there another way?

Why does Nordic companies have fewer women in senior managerial positions than the rest of Europe and the USA? Sanandaji has provided a new take on this issue: he attributes this to higher corporate taxes in the Nordic countries. This limits the amount of household services supplied through markets and makes it harder for women to invest the time to climb the career ladder. Further, generous maternity leave policies may encourage women to take off too much time thus stymieing their corporate progress. It is not explained why women are destined for household services….

Lighten up

Knock! Knock!

Who’s there?

Control Freak.

Con—

Okay, now you say, “Control Freak who?”

A first-grade teacher can’t  believe her student isn’t hepped up about the Super Bowl. “It’s a huge event. Why aren’t you excited?”

“Because I’m not a football fan. My parents love basketball, so I do too,” says the student.

“Well, that’s a lousy reason,” says the teacher. “What if your parents were morons? What would you be then?”

“Then I’d be a football fan.”

Never keep up with the Joneses. Drag them down to your level. Quentin Crisp