Few sparks of light in a gloomy landscape
IT FEELS LIKE FOREVER since our year-end edition of last November, with so much happening on the domestic political, economic and investment fronts.
I wish there was better news to buoy us up in the first edition of 2023. On the positive side, the JSE, thanks to some global heavyweights, has made a sprightly start to the year.
What also heartened me was the overflow of ideas from the IM team; small-cap maverick Anthony Clark, for example, had enough story ideas for five editions. I had a tough time making selections for this edition. But that’ sa headache I can handle .…
Some older readers may recognise a new contributor, Ari Jacobson, who started off his career more or less at the same time as me in Business Day’s Diagonal Street offices in the late 1980s.
My abiding memory is of Jacobson luring the late, great financial journalist Mervyn Harris to the graphics room and then locking the door on him. This was so he could quickly use the single Reuters terminal that Mervyn guarded 24/7.
Jacobson and I were fierce rivals in Cape Town for the Cape Times and Argus respectively in the early 1990s, before he went on to greater things — including a stellar turn as CEO at Master Currency and the listing of the Vividend Property Fund.
Jacobson’s story on the rand confirms his journalistic flair has not diminished; neither have his contrarian ideas.
Looking ahead to the rest of the year, those dabbling in domestic stocks, which on paper seem awfully cheap on any number of metrics, are by now familiar with the new load-shedding reality.
Local businesses, by and large, are a tough bunch. They have survived several political and economic setbacks, water shortages, infrastructure collapses, punitive lockdowns, currency fizzles and inept policymaking.
As a journalist I hardly feel the cost of load-shedding. I have a few solarcharged bulbs to keep the lights on and a R1,300 inverter that keeps me online. My biggest hitch was when the power went out while I was halfway through clipping myself a No 1 haircut with my swish electric razor before an interview with Business Day TV.
But the chickens are coming home to roost; some of the costs tallies for overcoming disruptive load-shedding are truly ominous. I saw one mid-cap counter pencilling in generator and diesel costs of R450m in six months. That’ sa chunk off bottom line, but also an unavoidable factor that will necessitate further tinkering in what I already regard as a lean and mean business model. In short, jobs will be lost as further operational efficiencies are sought and consumers whacked when margins are rebuilt with price increases.
Welcome to 2023.