Economic review

What drives the Rand – US $ exchange rate volatility? Primarily US surprises.

Contrary to all expectations, the Rand bucked it’s losing trend over the past months supported, so it is said, by developed-market investors seeking yield.

I was one of those who decried the possibility of the State cutting its wage bill: Stats SA’s quarterly financial statistics has shown that the State has done just that; its real employment costs growth has been cut by more than 28% in the past quarter.

Freudenschade: Can you recall the dismay when Nigeria was set to overtake (and had done so) South Africa as the leading African financial centre? Nigeria’s banking industry is experiencing a full-blown financial crisis as failed fiscal policies have led to a credit crunch which might even see some banks going down.

Business review

Morningstar has rated South African fund managers and, whilst the rating methodology is not simple, suffice it to say that Alan Gray and Foord came out on top.

In the same vein, the Association for Savings and Investment SA has introduced a standardised cost disclosure system whereby weighted average costs over the period of investment is shown. Financial services companies will be expected to provide the EAC (effective annual costs) from June 2017 and a year later, all investments sold must be compliant with such disclosure. This is the gist of it as the full truth is too complicated to repeat here.

Scientists have accidentally discovered a way to reverse the combustion process turning carbon dioxide back into fuel, in this case ethanol. The difficulty is, of course, that one needs energy to do this.

The 7de Laan actors have not been paid by SABC 2. I confess that I am uncertain if onewhether this is a good or a bad thing…

I had not really understood how many students were affected by the campus unpleasantness we have been experiencing of late: we have some one million students enrolled for higher education in South Africa.

VWSA has said that, if it were to meet government targets for BEE compliance, it alone would need 500 black suppliers of which it could find but 41 (with no guarantee that these would be able to grow into what is needed). What to do if that manufacturer loses its subsidies owing to non-compliance? Factually many businessmen face this dilemma.

The hoo-ha surrounding vehicle emissions has resulted in predictions that vehicles will return to larger engines as we have apparently reached the limits of downsizing.

On the subject of vehicles: the spectre of a strike in the retail motor industry and manufacturing sector is on the cards. Numsa will face an interesting dilemma in that vehicle sales are some 12% down, Volkswagen has started to dig in its heels on state intervention and if that union is not careful, the golden goose may well become an extinct species.

The CSIR reports that electricity generated from wind or solar sources is 40% cheaper than new coal electricity production. Hopefully this will put an end to the arguments which do not centre on continuous supply.

The investigation into a Gaurain link from Lanseria through Honeydew to Sandton; a line from Mamelodi to Naledi and an extension from Boksburg to OR Tambo, is completed and will be made public soon.

Property review

Catalyst says that listed property continues to be an attractive investment, compared with other asset classes, but is likely to return single digit returns this year. Sounds great, except that this does not bode well for other investments!

The JSE’s only listed specialist logistics property developer, Equities Property Fund, grew its dividend payout 20% in the six months to August.

What do you do when you wish to buy or sell and there are no building plans available for the buildings on the relevant property. Usually the seller is compelled to provide building plans, which holds matters up for a long time. There is another option available, albeit not great one: the purchaser may be persuaded to buy subject to him obtaining plans himself.

If you wish to transfer your property to your spouse, you had better do so now, as one of the recommendations by the Davis Tax Committee is that inter-spousal donations be removed. Of course, this is not law yet and is but a recommendation.

The 2 new acts on which I reported some three weeks ago which affects sectional title schemes, will necessitate changes to be made to how schemes are governed. You could attend our seminar next year on the subject or take a look at the following : http://www.iolproperty.co.za/roller/news/entry/key_changes_for_trustees_in

Practice review

Mr Abrahams has tipped his hand: whilst unnerving, it is an interesting exercise that awaits. In a week or two he will be asked to play with the big boys and one suspects that, in Afrikaans—iemand gaan sy tjank aftrap.

State legal advisers: when one sees the apparently uninformed machinations of those who guide us (think the McBride affairs, the current International Criminal Court debacle and several other U-turns that have had to be made) one wonders whether our leaders do not ask legal opinion, are badly advised or simply don’t take the advice proffered. The latest revelation is that it has cost our state nigh well R1bn in legal fees (outside of the Attorney General’ office) fighting off lawsuits. (Of course, rom a legal perspective this is great!)

The RAF was fine until 1994 where after it gradually crept into insolvency? Apparently not: it is said that that institution has been insolvent since 1981 but is now turning the corner. For the record, the fuel levy represents about R2.50 of each litre of fuel sold. If the statistic given is correct, then an announcement that the RAF will turn the corner after 35 years of insolvency may be viewed with some scepticism.

Hot: “Always the griller. Never the chicken,”

Nandos on Thuli

Five students appealed an interdict of the High Court against their activities at UCT. One wonders who paid the costs of an SCA urgent appeal? Such costs would easily pay a student’s costs for an entire degree; clearly they are activists on someone else’s behalf.

I received a letter from a national chain of attorneys in which it was said they would no longer attend to work sent to them if we had not confirmed that we had Fica-ed our client. It would be interesting to receive opinions from others on this topic as, for one, I cannot see that one needs to stand for the obligations of another?

Cases

Taxation of an attorney and own client bill

This week past our practice took the Durban High Court taxing master on and obtained a judgement against that worthy for refusing to tax such a bill on the basis that one has to produce proof of a valid fee agreement between attorney and client before taxation can take place. In brief, this is not necessary. Ask me for a copy of the judgement.

Can one agree to register your property in the name of another as representative?

Yes, but one is not allowed to register property in the name of another as agent. If one does register one’s property in the name another, one needs proof when it comes to a dispute whether the property was truly yours or not.

Grouse v Mdyogolo ECHC http://www.saflii.org/za/cases/ZAECELLC/2016/2.html

Full compliance with conditions

The Zephan case, referred to below, is a salutaryexercise in making sure that a purchaser fully complies with the conditions of a contract. Failure to do so might well render the contract invalid or capable of being cancelled.

http://www.saflii.org/za/cases/ZAECPEHC/2016/66.html

Personal injury: the capacity to earn money

The capacity to earn money is considered to be part of your estate and the loss or impairment of that capacity constitutes a loss and may be claimed.

Kleinhans v RAF [2016] JOL 36311 (GP)

Quotables

Map out your future – but do it in pencil. The road ahead is as long as you make it. Make it worth the trip.

Jon Bon Jovi

Comment

V/d Merwe jokes: have you noticed that v/d Merwe jokes have all but disappeared? There is some respite though: have you noted who represented the Guptas in threatening Madonsela?

Unintended consequences: It is ironic that the percentage representative political voting system that the whites fought for in 1994, is probably one of the reasons why corruption is easy in South Africa. A representative does not stand in his own right; he is appointed at the behest of his party. This allows that party to promise places to politicians. In the space of less than one generation we have descended from the lofty heights of a nation held up by the world as a beacon of success, to just another African nation riddled with corruption. Whilst on this train of thought: the ANC is pushing for the idea that the election of its top six officials should not be contested. Plato’s quip that the penalty of non-participation in politics is to be governed by someone worse than ourselves is as apt now as then.

A rare plaudit must be given to our chief statistician; Pali Lehohla is doing a magnificent job of placing State statistical results within reach of everybody.

Des: the compliant minister is alleged to have used staff members to write his assignments… He holds several diplomas and an MSc from the University of London. Clearly the man understands how to fully use resources…

Private institutions of higher education are manifestations of capitalist wickedness? Perhaps; consequentiality is starting to kick in and the erosion of those who could fund others at State universities has started.

The Arch raised a subject some two weeks ago which is near to my heart: it was reported that 82% of those polled supported assisted dying, yet our State persists in a Roman-law fiction that the life of its citizens belongs to it – a fiction taken over by religion and thus elevated beyond argument. This is truly a cause deserving of support.

The king can do no wrong? Our law punishes those in authority more severely than underlings for the same transgression. The rationale underlying this, is that such should know better and should set an example. The bid to have the abaThembu King pardoned for serving his 12-year prison sentence should be resisted.

Lighten up

A Scotsman takes a huge jar of urine to the lab for analysis. A few days later they notify – nothing untoward has been detected. He picks up the phone: “It’s me Wullie. Tell auntie Mary there is nithin wrang with her, you, me, grampa or the dog.”

“Can you think of any book that has changed your life?”

“Oh certainly; my husband’s cheque-book.”

Two reasons why it's so hard to solve a Brakpan murder:

1. The DNA is all the same.

2. There are no dental records.

Who invented the toothbrush?

A Brakpanner (If it had been invented by anyone else, it would have been called a teethbrush)

Did you hear that the Brakpan Mayor's mansion burned down?

Ja, almost took out the whole trailer park.

Die bokser se vrou en haar vriendin gesels. 'Is dit nie moeilik om met 'n bokser getroud te wees nie?' vra die vriendin.

Die bokser se vrou antwoord: 'Ag nee wat. Dis eintlik opwindend. Elke keer wanneer hy van 'n geveg af terugkom, lyk hy anders.'