Reliable - you hope

ZARX, the new stock exchange has arrived and, as an investor in shares, it’s nice to know there is another avenue down which I can trade. Even nicer to know trading is less expensive and quicker.

I don’t know if I’ll ever trade on the ZARX. I guess that depends on which companies list on it and how quickly I want to trade. Cost could also be a factor.

I did recall, though, that SA used to have two stock exchanges, the Johannesburg Stock Exchange (JSE) and the Union Stock Exchange. In my youth I was the ward of an aunt and uncle and the father of the uncle, had been a stockbroker on the Union Stock Exchange until he retired.

At the time, I had not yet discovered the terrain of stocks and shares, and was uninterested. But I did recall that there were two markets. And so, I asked myself what happened to the Union Stock Exchange?

In my youth I would have had to research in a library. Now I have the internet. Here I have been told that the Union Exchange was introduced as a rival to the JSE in 1933 and that it wound up in 1958 when its listed companies were merged into the JSE lists.

Again using the internet, I looked at the history of ZARX and was informed (I quote): ‘South Africa’s first, and until now, only bourse, the JSE, was formed in 1887 during the first South African gold rush.’

Oh well, the internet is quick but who said it was reliable?

Ben Temkin


Strike while the iron’s hot

I like Jojo Khumalo’s call for his fellowers to act now and, in his words, ‘Strike while the iron is hot’.

Khumalo (a pseudonym but it’s the name on the ID he bought) is not one of the some 6 000 employees Kumba who enjoyed R500 000 from Kumba’s BEE share allocation last year. He also did not receive the two dividends the members of the scheme have received since then. He does not hold shares in Kumba. He doesn’t work at Sishen.

I can’t but agree that he is disadvantaged, and I concur he’s not playing on a level field.

Before his sympathisers take to the street of Johannesburg and torch the few trucks still on the roads, I feel it opportune to précis his action plan.

First, shares will be allocated to all residents in SA - citizenship is not a prerequisite as Khumalo isn’t xenophobic - who don’t have shares.

Khumalo’s fuzzy on which shares will be allotted but his cohorts are espying Kumba shares – they’re wary about gold and platinum mining shares but there are murmurs about retailer shares. Mr Price is a popular target and a few fancy Foschini or Richemont – a Rolex would be an envious dividend.

Secondly, the allotments will be fairly allocated, the same rand value to all except for additional bonus amounts to the ones who get the tender to manage the contract for the allotments. The bonus amounts will be in cash and be paid in an offshore account in US dollars – a bit iffy in my view, but these are early days.

It’s also fuzzy who will be eligible to tender for the allotment contract but trade unions seem to be a no-no.

This plan is a go if the third part of the plan works. This part needs a sympathy strike from investors to stop trading their shares. No buyers. No sellers. No sales.

Here’s the cunning bit. Existing shareholders won’t be eligible for the allotment. What will they strike for? Copycat, of course, what workers ask for – more pay. But for bigger dividends not bigger wages.

The plan expects the company managers to cave in to the shareholders because it’s in their self-interest as most of them have share-option schemes.

While the allotments are being made, the JSE will be officially closed for trading. Khumalo doesn’t want share prices to change while the allotments are being made. As some of the shares are traded in other countries, it seems he hasn’t figured they’ll also have to be closed. But, as I’ve said, these are early days and sanctions are a hint - though possibly counter-productive.

Admittedly the plan is seriously flawed and contradictory. But, since when did going to the streets have to have logic behind it?

I’m with Jojo Khumalo – strike while the iron’s hot.


Trekseinde post-Zuma

Seventeen years ago my satirical novel, The Match, was published. Written while I was still in an almost decade-long voluntary exile from South Africa, this satire envisages a post-Mandela South Africa.

My fanciful flight foresaw a rainbow nation still riven by race and rooted in corruption. But I figured we would make a plan and my protagonists in the novel would fare pretty well over time.

Well in another five years or so, perhaps in less time, we’ll be in the post-Zuma South Africa. A few years on we’ll, as The Match suggests, be in the Pula period.

What is Trekseinde and SA like in Pula governance? Here are some snippets:

Pula’s main home is Trekseinde, a burgeoning city with an airport that rivals Dubai and its duty-free shopping centre. Its park now has a third monument, a gigantic bronze of a lithe rugby-player. The base is etched with the words, ‘The Shadow’.

Before he retired from rugby, The Shadow scored five tries in his last World Cup final against the All Blacks at Eden Park. The final score was 46-3.

The bronze is a pilgrimage centre for rugby fans around the world, and Trekseinde is the staging place for the latest Bok Team.

The Gautrain line, long ago linked to Zuma City, was linked to Trekseinde shortly after Pula was instated as president. Lots of people made lots of money from the building contract and gave employment to lots of people.

After the great strikes of 2012 and the subsequent hyper-inflationary period, the mines recovered, their profits bolstered by the rand’s weak currency.

With the Boer War reparations paid by the British government, assisted by the EU (with Germany backing the financing) the SA currency was restored and the rand was renamed the ‘buck’.

Johannesburg is now the financial centre of the world; London remains an important tourist attraction. Libor is extinct; international banks prefer Jobor.

Corruption remains an important financial industry and race relations in this industry are healthy.

Transkei Airlines, changed to Zuma Air, has taken over SAA, and tolling on the aircraft has been constitutionally legal for domestic flights. The governing party has a significant shareholding in the toll company.

Trekseinde boasts a world-class university, two giant sports stadiums, dozens of excellent high schools and a massive warehouse to store textbooks for schools.

Pula’s home cannot be seen from the road. The palace’s garden is enclosed by a reinforced steel and concrete wall, designed by Israeli engineers and built by Palestinian contract workers. These former workers, now on pensions, live with their families in their own enclave in the western outskirt of the city. They worship in the mosque endowed by the Republic of Saudi Arabia.

Trekseinde’s mayor is not a drunk.

Trekseinde’s Beeld is available only on the internet.

(The Match is available from Amazon Kindle – go to Books on this website)

Ben Temkin

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Ben & Jean share their thoughts on the Investment World & its opportunites, plus anything else that they think will be interesting