Today’s markets. The inefficiencies at Eskom and a new look at the IT sector.

ALEC HOGG: David Shapiro is with Sasfin. Wow, Dave, we've got a scoop tonight! Susan Olsen, the lady who was a global consultant brought in by Eskom to try and sort out their issues on coal, and kicked out - in fact, had her contract terminated by the people who do the coal procurement - in 2007, after she told them "You've got to sort this whole place out". She then wrote a memo, gave the memo to Jacob Maroga, who said: "This looks pretty good, I need to investigate." And he also confirmed her firing - and we know what happened as a result of coal procurement. Anyway, we got hold of her today, and we've had a lovely interview with her. There's a 12-minute podcast on Moneyweb, but cut down to what's going on tonight. I guess the whole Eskom saga remains uppermost in most people's minds.

DAVID SHAPIRO: It is. Of course, from an inflation point of view, what's going to happen to the increases in charges there is very, very important for the South African economy. I think don't underplay it. It's an incredibly important area of South African...

ALEC HOGG: The trouble is we can't go anywhere else. We can't say if you have a problem with the Post Office you can start using couriers. With Eskom you just can't use anything else.

DAVID SHAPIRO: And also we've got to make up for years of inefficiencies, and also for years of low payments, underpaying Eskom. So there's a lot we have to absorb, and we've heard it on the show.

ALEC HOGG: The inefficiencies. A lot has been said now about Eskom not increasing its tariffs, but I remember looking at Warren Buffett's annual report and American, when they did the deal in Idaho, had a guarantee - I think it was from '96 - that they would not increase their tariffs at all, any time. So they have ... by better efficiencies. Yet we are just going the other way.

DAVID SHAPIRO: Ja. Strangely enough, I am talking to Eskom tomorrow morning.

ALEC HOGG: Ask then to bring Olsen back.

DAVID SHAPIRO: It's a finance strategy committee meeting, and it's whole lot of people there, about 90 people, so I'll see what I can gather from them as well.

ALEC HOGG: What she does say is she thinks the people running the power plants are wizards, anyway. Let's not take more away from that.

    We are also going to be talking to Jeremy Ord in a  little while. What did you think of Didata?

DAVID SHAPIRO: Great results. You know, finally they are delivering. And I think we've been watching the margins for some time, and it's also top line as well. So there efficiencies are coming in and, as they say, they are in the right area of the market. How many people today are using Internet phones? We use it, we certainly use it at our firm. Everything is combined into the Internet, so I think Internet Solutions is doing brilliantly. Profit up there about 27%.

ALEC HOGG: You liked the numbers, though, from Didata?

DAVID SHAPIRO: I think so. You know, we've ignored it. Unfortunately at our peril we have actually ignored it.

ALEC HOGG: No - in 2007 there was a competition, and there was actually an article on Moneyweb that said that David Shapiro's got the hots for Didata.

DAVID SHAPIRO: I did. And instead of continuing with it, I just ignored it for other stuff, and I'm really, really very sorry.

ALEC HOGG: It's nearly R10 today. You should have put some of those in your portfolio.

DAVID SHAPIRO: You know, we've given up on a lot of the IT stocks, looking elsewhere for gains, and maybe it's an area of the market that we've got to start focusing on again. There are no very big companies here, Didata probably being the biggest, but maybe we should start looking there again.

ALEC HOGG: Well, we are going to cross to Jeremy Ord - it's our phone bill. We are the ones phoning London, or he's phoning us, or hopefully its IPT technology, but we'll be picking up with him in just a moment.

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