Economics

 

Mr Godongwana debunked the notion of using pension funds to bail out SOEs this week past. This pleased me immensely as, on checking, the only SOE that is making a profit, appears to be SAFCOL ; investing in trees is hardly a great pension move. The idea is that pension investments in infrastructure projects, which are profitable, would be allowed. Great idea. Managed by the state…mmm.

More on pension funds; Heystek (a once useful squash player, turned investor adviser and SA pessimist) published graphs in BT, showing that the JSE substantially under-performed, over the past three years, when measured against other indices such as NASDAQ, S&P, Dow Jones and so on. Whether you agree with his take on South Africa or not, what is true is that the South African Rand will weaken against at least the dollar and the euro over time. Holding external investments will probably give a reasonable return, in Rand terms in future – aside from making one sleep easier.

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More on investments: a report by ASISA holds that South African investors put R88bn into local unit trusts, apparently, owing to their low volatility and inflation-beating performance (paradoxically, these have not performed well over the past years). Clearly the money is here – but what to do with it?

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You will recall the somewhat acrimonious debate on BEE and mining: once a mine had given up 26% of its equity, was it necessary to top this percentage up if those who benefited, sold to non-BEE shareholders? It would appear that this dispute has not yet been settled but the consequences of dithering are clear: some 50,000 miners have lost jobs over the past 10 years. Capex has halved. Ten years ago, mining accounted for 17% of our GDP, whilst it is now 5%.

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Where to get employed? The major recruiters of graduates, this year, have been in banking and finance. The median graduate starting salary, this year, for a graduate, is R220k pa. or R18k pm. Actuaries, quantitative analysts (whoever they are), lawyers, investment analysts and engineers averaged R350k pa. Of the above, only lawyers cannot do sums – the best example of this was a conveyancer who called me to ask about shares in property. A one third share was about to be transferred to two people and she asked what would be the share of each – I said a sixth: silence; she asked, how did I get to that?

Oh yes; candidates who started jobhunting well prior to graduation, were most likely to secure a position.

 

Business

 

Business Maverick reports that the African Continental Free Trade Area zone will take off in January, owing to CV19-occasioned delays. This could be the world’s biggest free trade zone, by area, with a potential market of 1.2bn people.

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Sanlam sliced R6.3bn of its market cap by “repositioning” with a view to establishing a black-owned asset management company. The intent is to boost its empowerment credentials and give it better access to institutional flows of cash.

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A fun comparison on the costs of funerals, found that South Africa is the fourth most expensive country to get buried in – R26k on average. I suspect that this has more to do with the traditionss held by our majority, than the actual costs.

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A Myboadband comparison of bottom-end banking accounts, shows that there is not much to choose between the banks, save that Capitec seemed to have nosed ahead.

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Whilst on comparisons: BT published a review of our universities – ratings are based on medals won, publications and so on. Top of the pile is Wits, UCT, Stellenbosch, UP, KZN and North-West. I can claim personal or vicarious interaction with six of our top universities, and, in terms of functionality, I would rate North-West at the top with UCT definitely at the bottom.

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Yawn: of more practical use to business people are the following:

• Bloomberg reports that Finns have discovered a cure for hangovers – a dose of the amino acid L-cysteine;
• you can now renew your vehicle licence via https://www.chatback.co.za/ ; and

 

altogether more fun, is a report on a multi-Mach, hypersonic (Mach 5+) propulsion system in development by Rolls-Royce https://www.flightglobal.com/air-transport/rolls-royce-deepens-partnership-with-reaction-engines-on-cooling-technology/139844.article

 

Property

 

Are tall buildings on expensive mid-city properties an economic proposition or is it just ego: https://voxeu.org/article/economics-skyscrapers-synthesis

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Commercial properties losing value: less so, apparently, green-certified offices, which held their value and have a significantly lower vacancy rate of 8%, as opposed to 11.5%.

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IOL reports that there is a move to exempt certain public buildings from property rates. Examples are clinics, schools and public service buildings.

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Home makers: Leadhome reports that women now constitute 58% of its buyer-enquiries and 55% of its seller-enquiries. About 50% of people making offers on homes are in their thirties.

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This week past Moneyweb interviewed Rode: much was said, but what interested me was his prediction that our gradual decline in GDP, foreshadows a downward trend in house prices, even entering negative territory; the first such trend since the GFC.

 

Practice

 

Delays & stuffups:

• our regional and district magistrate courts have a 60,000-case backlog (added to 200,000 backlog from the past financial year that ended in March) from March to the end of June;
• our forensic laboratories have a policy of dealing with 80% of submissions within 90 days. These laboratories have a current 100,000 item delay. This impacts directly on the functioning of our national prosecution system; and
• the registrar of the National Register of Sex Offenders has said that the register is not readily accessible to the Department of Education.

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Going after the big boys! Our wonderfully newsworthy JP Hlope, has accused CJ Mogoeng of his lacking integrity, on the latter reaching a decision that Hlope should face impeachment. Fun.

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On a much more serious note (and our profession is serious) is that Parliament has binned RABS: after six years of debate, on the basis that it would have cost over R320bn to implement – more than the RAF’s current actuarial deficit. (See, it is not only lawyers that can’t do sums) So, what’s next? The fact is that the RAF, in its current form, is unsustainable.

Whilst on the topic of vehicle liability, is a write-up on Uber’s liability towards passengers outside of the RAF: https://www.iol.co.za/motoring/industry-news/can-injured-passengers-claim-damages-from-uber-legal-expert-weighs-in-55304c2c-f62c-416c-b7a1-c3fd8d694dd7

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Two hoary but, for new practitioners, noteworthy items on trust majority and the in duplum rule may be found at:

• https://www.iol.co.za/business-report/opinion/trust-to-trust-minimum-and-maximum-number-of-trustees-8a181612-50c0-40c0-9311-6eb16a5c1061
• https://www.golegal.co.za/in-duplum-rule-debt/

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Rental claims: if you have sued for arrear rentals, can you again claim for future losses? https://stbb.co.za/wp-content/uploads/2020/08/stbb_plu18-2020_s1.pdf

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Can one bind shareholders to vote in a certain way at a general meeting? Unfortunately our SCA did not finally pronounce on this owing to the issue having become moot (courtesy of advocate Crots): http://www.saflii.org.za/za/cases/ZASCA/2020/95.html

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The Deeds Registries Regulations and Sectional Titles Regulations have been amended. You need to look this up. https://archive.opengazettes.org.za/archive/ZA/2020/government-gazette-ZA-vol-662-no-43614-regulation-gazette-dated-2020-08-14.pdf

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CRC 2/2020 imposes a R200 fee for withdrawing a deed from lodgement at any deeds office. “Test” runs are now more expensive aside from being verboten…

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The Chief Master issued directive 1/2020: this deals with advertisements in non-print papers which are not published on the same day as the Gazette. Ask me for a copy.

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Can you compel the opposition to make use of a virtual trial to avoid delay? http://www.saflii.org.za/za/cases/ZAKZDHC/2020/30.html

 

Quotables

 

You must live in the present, launch yourself on every wave, find your integrity in each moment. Fools stand on the island of opportunities and look towards another land, there is no other land; there is no other life but this.

Thoreau

 

Comment

 

1. Aceing it: the egregarious looting by scavengers of PPE funds and gatvolness with corruption has led to the ANC (apparently) taking action! Cde Ace has called for colleagues to declare interests in tenders. His call is welcomed. Furthermore, calls have arisen for the disclosure of the ultimate beneficiaries of tenderers; it is high time that the beneficial ownership of tenderers be disclosed (think the ANC-related car-wash owner who won a tender to procure PPE). The difficulty here is interpretation: cde Ace is clearly up to his neck in this (think Estina, his sons winning tenders and so on) but it bothers him none. Either he is exempt from investigation (the NPA has said that it cannot investigate all these transgressions) or he interprets this to mean as long as you don’t make money into your own pocket, benefiting those who you know/owe is not wrong: after all, there is an ANC hierarchy who needs a hand up – witness our latest KZN MPL (she in the throes of a corruption case). An oft repeated refrain is that, as long as an individual in power has not been proven guilty by our courts, he may continue with impunity. Yet, most of us are not that stupid – we understand how corruption works.

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Bias: two interesting examples of bias presented themselves this week:

• The tired argument that blacks cannot be racists. The definition of racism implies that one distinguishes between races, holding another race to be inferior (generally inferior but also superior) to oneself. Whatever the technicalities, it is high time that we acknowledge that racism is a human condition and that, today, race does not exempt one from such a belief.
• A Ted Talks presentation on bias is worth a listen: we all hold biases – my personal take has always been that I grew up a racist but that I live past it. The fact is that bias on race is not confined, again, to any race. In my research (25 years ago) I had found that even blacks held the perception that whites were superior to them/their institutions. I have little doubt that many are, like myself, gatvol of the never-ending BS debate around firstly BEE and lately BLM. Jislaaik, we really need to move on. Do take in: https://www.ted.com/talks/verna_myers_how_to_overcome_our_biases_walk_boldly_toward_them?

 

Lighten up

 

Gender bias:

As their plane is going down, the woman turns to the man next to her. “Make me a woman before I die,” she says. He takes off all his clothes, hands them to her and says, “Fold these.”

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What do you do when your dishwasher stops working? You hit her.

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What do you call a man with 99% of his brain missing?

Castrated.

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What did God say after creating man?

I can do better.

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Confirmation bias:

I collected a lot of data trying to disprove confirmation bias.

The results were exactly what I expected.

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So: why and how do we laugh?

https://www.ted.com/talks/sophie_scott_why_we_laugh?

 

 

 

 

 

 

 

Author: Dr Daan Steenkamp

 

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Still looking for your dream home. Feel free to give one of our developers a call today.

Tom Eastwick – The Gates, Hilton and Garlington, Hilton | 072 297 2699 | tom@devdirect.co.za
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