Financial Mail - - EDITORIALS -

The mar­ket is never wrong . . . or so they say. If that adage holds true, the lo­cal econ­omy looks set for some vi­brancy in the medium term. Though it must be said that to date there is not much mar­ket move­ment — in terms of eu­phoric share price shifts — to sug­gest in­vestors are to­tally cap­ti­vated by the po­lit­i­cal changes that re­sulted in Cyril Ramaphosa wrest­ing the ANC and state lead­er­ship away from Ja­cob Zuma.

Cer­tainly, shifts in the rand at the time of writ­ing could eas­ily be con­strued as in­vestors los­ing faith in SA once again.

But let’s look at the big pic­ture. In the past two weeks two size­able con­sumer-aligned busi­nesses — glass­maker Con­sol and house­hold-brands con­glom­er­ate Lib­star — have de­cided to wend their way to the JSE. While these busi­nesses do have in­ter­na­tional or African am­bi­tions, the main op­er­a­tional fo­cus is firmly on ex­pand­ing prof­itable footholds in SA.

Both com­pa­nies will ear­mark the cap­i­tal raised in their re­spec­tive list­ings to bol­ster ca­pac­ity, which does show a sense of con­fi­dence in the long-term vi­a­bil­ity of con­sumer in­dus­tries in SA.

One might also re­mem­ber that these are not the only con­sumer-cen­tric busi­nesses to have eyed the JSE lately. Long4life, an ac­quis­i­tive in­vest­ment ve­hi­cle steered by deal-mak­ing doyen Brian Joffe, and Kaap Agri, a spe­cial­ist re­tailer with the ad­ven­tur­ous PSG as a large share­holder, listed on the JSE last year. Health-care re­tailer Dis-chem also listed last year, and has since en­joyed a strong run as in­vestors backed its com­mand of a cap­tive con­sumer niche. The emer­gence of new fish­ing en­ter­prises, in­clud­ing Sea Har­vest and Pre­mier Fish­ing, also speaks to an econ­omy with in­creased spend­ing power across the mid­dle class.

While it may be a lit­tle pre­ma­ture to speak of a con­sumer-driven list­ings boom, there are per­sis­tent mur­mur­ings of other con­sumer-type list­ings — most no­tably Bounty Brands (backed by the Coast2­coast team that formed health-care brands spe­cial­ist As­cendis) and Pre­mier Group (a con­sumer-goods con­glom­er­ate con­trolled by Brait).

Acorn Agri and Over­berg Agri, two un­listed agribusi­ness play­ers, are in the throes of a merger that is ex­pected to cul­mi­nate in a list­ing on the JSE.

What’s more, Home­choice — a cat­a­logue re­tailer which seems to har­bour am­bi­tions to be­come the Ama­zon of Africa — has cho­sen this del­i­cate junc­ture to raise sub­stan­tial cap­i­tal for its var­i­ous growth en­deav­ours.

List­ings booms seem to roll around ev­ery 10 years or so. On this ba­sis, the JSE (and maybe some of the newer bourses that have sprung up re­cently) is slightly over­due for a rush of new list­ings. Are we see­ing the start of a se­ri­ous newlist­ings ad­vance?

Ev­ery list­ing boom has a theme — the late 1980s be­ing fo­cused on (some­times very wonky) venture cap­i­tal and en­tre­pre­neur­ial en­deav­ours, the 1990s brought the tech­nol­ogy wave and the late-2000s the in­fra­struc­ture thrust.

The list­ing of a slew of con­sumer-re­lated coun­ters would sig­nal con­sid­er­able long-term faith in the lo­cal econ­omy (not­with­stand­ing the ripple ef­fects of the re­cent Vat in­crease). But would it not be a real con­fi­dence booster, of the nitty-gritty kind, to see an Sa-fo­cused min­ing ex­plo­ration com­pany with de­cent scale seek­ing a list­ing on the JSE? That would re­quire a greater de­gree of cer­tainty around key reg­u­la­tory is­sues, though that might not hap­pen too soon.

But hope­fully we don’t have to wait un­til 2028 to see some mean­ing­ful pick-up in min­ing ac­tiv­ity on the bourse.

In a coun­try as starved of in­vest­ment, en­trepreneur­ship and jobs as SA, the loss of one cor­po­rate firm is one too many, as is the loss of one job. SA should try to pro­tect ev­ery job, ev­ery en­tre­pre­neur, ev­ery in­vest­ment.

It is in this con­text that the demise of au­dit firm Nkonki Inc, which has an­nounced it will file for vol­un­tary liq­ui­da­tion af­ter the au­di­tor-gen­eral can­celled its con­tracts with state in­sti­tu­tions, is re­gret­table and takes SA back­ward on many lev­els. Nkonki is one of those pro­fes­sional out­fits that lent their enor­mous cred­i­bil­ity to the state-cap­ture project, a crime against the peo­ple. The first point on which Nkonki’s demise is re­gret­table is that it is one of only a few truly black­owned and man­aged na­tional au­dit and ac­count­ing firms with, more or less, the ca­pac­ity to con­duct this im­por­tant work.

The demise of Nkonki, brought about by the greed and un­eth­i­cal con­duct of those whose job it was to look af­ter the firm and its em­ploy­ees, re­moves from the au­dit pro­fes­sion a key black in­sti­tu­tion with a proud his­tory of re­silience in what has been a hos­tile en­vi­ron­ment. But, it must be said, Nkonki should not be the last au­dit firm or con­sul­tancy to die among those who fa­cil­i­tated the loot­ing of public re­sources. The up­stand­ing and eth­i­cal among Nkonki em­ploy­ees should have no prob­lem find­ing other jobs. Their skills are widely sought-af­ter.

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