Perspectives of a lone ranger

Life in South Africa is not as bad as we tend to tell ourselves.

This article was first published in the latest issue of the Moneyweb Investor. To read the magazine click here.

I’ve recently had the pleasure of spending some time in Amsterdam. I find spending time out of South Africa always lends a sense of perspective. For a start, its late spring weather left a lot to be desired when compared with Cape Town’s glorious autumn weather. But I also noticed that in Europe crime is on the up, racism is increasing and the effectiveness of government is decreasing. We are not the only ones with problems.

On returning home I couldn’t help reflecting that life in South Africa is not as bad as we tend to tell ourselves. Yes the politics is toxic, the economy is growing at 0.5% and racism remains massively polarising. We have our share of challenges.

That said, there is nothing to beat a genuine smile from a Home Affairs official when they say “welcome home”.

Yet as the thrill of travel fades, I have become as despondent as some of my fellow countrymen and women. Recently my housekeeper announced with pithy disgust that she will not be voting. When pressed she said because “nothing changes – the poor get poorer and the rich get richer”. The working class – on all social rungs – is dissatisfied with its lot for one reason or another.

At the same time the shoulders of the unemployed on the side of the road sag with every passing day, and no one really cares.

And our students – the elite in our society – remain angry.

So it was with this cloak around my shoulders that I was struck by the business news headlines recently – they seem to reflect a different country. Consider these headlines:

What is going on? These results do not seem to reflect an economy on the brink of recession. Are things really as bad as they seem? The Ascendis deals are astonishing – the combined value of the two acquisitions is R7.3 billion. That is more than the company’s current market capitalisation. Credit must go to that management team.

A closer look suggests that while many big companies are delivering acceptable results, it is inflation or foreign remittances rather than local consumer demand that is driving growth.

Consumer demand is fragile at best. However, I think big listed business is always going to be okay. Many of our listed firms are geographically diversified and others are vertically and horizontally integrated, which means those at the top control much of the value chain. Think Tiger Brands, Pioneer, Famous Brands, Shoprite. When things get tough they cut back in a bid to become efficient. This means retrenching people. Trade union Solidarity is fighting this battle tooth and nail. The latest company to suggest restructuring is Netcare, which in May reported a currency-assisted 11% rise in half-year profit.

The companies that are battling are the small ones that skirt around the outside of the value chain fighting for scraps. A recent survey from Deloitte on business restructure, suggested that 80.6% of restructuring teams expect an increase in activity in the next 12 months.

We are facing some of the strongest headwinds of the democratic era – but there will always be growth and profit for innovative and hard-working companies – large and small. Specifically those in sectors such as food, communications, education, health and food nutrition, apparel, energy and specialty chemicals. Resources including mining, agriculture and construction are still at risk of being in distress in the next year.

The problem with the uneven and patchy growth that we are seeing is that the rich (shareholders) get richer and the poor (workers) get poorer. And that is not a great recipe.

However, I take some heart from the fact that behind the scenes there is an unprecedented level of cooperation between senior business leaders, labour and government in a bid to pull the economy right. In our cover story this month we ask whether this is enough to rescue the situation. As the article points out, the good people in business, labour and government are battling “malevolent forces” in parts of government and and I pray that what is for the good of the country triumphs over self-serving greed.

On another note, I have a request: We are bringing you the 14th issue of the Moneyweb Investor this month. Many of our readers engage with us directly – last month’s interview with a forex trader was a direct result of reader interest.

Please keep the comments and story suggestions coming on

Please consider contributing as little as R20 in appreciation of our quality independent financial journalism.



You must be signed in to comment.




The Budget Speech explained
Moneyweb’s 2020 national budget offering, including infographics and audio ratings, as well as past budget coverage....

The Investor Issue 48
Separating out the noise from useful information in the markets is not easy. The trick to staying the course is to keep an eye on ...

The Investor Issue 47
Some people intuitively understand that investing for future gain is a long-term process that cannot be rushed. The management of ...

The Investor Issue 46
While US innovation soars and its tech listings continue at a ferocious pace, SA has no real plan for how to embrace the 4th Indus...

The Investor Issue 45
As the investment world falls more and more in love with the simplicity that ETF investing offers, index providers are realising t...

The Investor Issue 44
Company financial statements are the last line of defence for investors wanting to protect their investments. But these cannot alw...

The Investor Issue 43
What makes one CEO great and another mediocre? The Moneyweb Investor ponders this and other leadership questions in the latest iss...

The Investor Issue 42
Stagnant economic growth and questionable economic policy is hampering the development of mid-sized - and investible - businesses ...

The Investor Issue 41
If you are one of those people who invests more energy into your credit card or medical aid rewards programme than you do your ret...

The Investor Issue 40
Volatility in global markets is higher than it has been in years, giving investors the jitters. Some 'experts' are suggesting a re...

The Investor Issue 39
From lessons from Buffet to building your own crypto-portfolio (a risky endeavour by anyone's standards), this issue of The Moneyw...

The Investor Issue 38
They say the art of investing is to ignore the short-term noise and focus on attaining long-term goals. That's true, but that does...

The Investor Issue 37
Getting the economy on the correct footing requires that everyone pulls their weight. Our writers this month have gone above and b...

The Investor Issue 36
The past year is littered with train wrecks like Steinhoff, SAA and Eskom. But there is real sense of ‘back to business’ in So...

The Investor Issue 35
Stock markets are soaring, but productivity is not. Innovation continues, but leads to fewer new jobs. And the great and the good ...

The Investor Issue 34
South Africans are fed up with corruption, or anything that has even a whiff thereof, as JSE rockstar Naspers is currently experie...

The Investor Issue 33
As the year races towards its close, investors will be forgiven for feeling a little breathless. The British WWII propaganda phras...

The Investor Issue 32
Anyone would think that getting an economy moving is rocket science. It's actually not. It requires single-minded commitment. Whil...

The Investor Issue 31
We examine the opportunities of forex trading, the best unit trusts, e-commerce at Richemont and more. ...

The Investor Issue 30
Despite what the astrologers say, there are no shortcuts when it comes to successful stock picking. Fundamental analysis counts. T...


Follow us:

Search Articles:
Click a Company: