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contents

financialmail.co.za December 21 - December 27, 2023

fox Finding SA’s dirtiest beaches

features Held to account

investing Taxi trauma cuts deep

life Opera hits the high notes

Andre Oosthuizen

cover

20 R EG U L A R S 4 Ed i to r i a l s 5 Ed i to r ’s Note 6 State of Play 7 Le t te rs 8 At Home & Abroad 36 On My Mind: Craig Butters 37 On My Mind: Shirley de Villiers 38 Your Money 40 On My Mind: Jeremy Sampson 57 C ro sswo rd 58 B a c k s to r y FM FOX 9 Sea & Sand 10 Another Week 11 Tre n d i n g 11 Dinner Party Intel

12 Diamonds & Dogs 13 Pa l a e o n to l o gy 14 McLeod Computing 15 Pattern Recognition 16 N u m b e rs 16 Hot Property 17 Pro f i l e 18 Boardroom Tales NEWSMAKERS 2023 20 Kg o s i e n t s h o Ra m o kg o p a 23 Civil Society 24 B u s i n e ss 26 Po l i t i c s 28 I n te r n a t i o n a l 30 Sport

32 Cape Independence Co m m e n t

Kgosientsho Ramokgopa: nine months on

AFRICA & I N T E R N AT I O N A L 34 Z i m b a bwe I N V E ST I N G 42 Transaction Capital 44 Pro p e r t y 45 Re t a i l 47 On My Mind: Adriaan Pask 48 The Ghost Train 49 Market Watch 50 JSE Top Stocks 52 Economic Indicators

Hunting SA’s bum beaches P9

Suspensions rock accounting body P31

Meet Lesufi’s Keystone Cops P37

Jawno’s plan to jump-start SA Taxi P42

www.financialmail.co.za December 21 - December 27 2023

SA: R46.50 inc Vat Botswana: P34.00 Eswatini: E46.60 Lesotho: M46.50

NEWSMAKER OF 2023

KGOSIENTSHO RAMOKGOPA SA’s WORST YEAR OF

DARKNESS UNDER NEW ELECTRICITY MINISTER

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OTHER NEWSMAKERS Nicole Fritz P23 Fighting Motsoaledi on Zimbabwe Mike Bosman P24 Stemming the bleeding at Spar Fikile Mbalula P26 Mindless megaphone on the loose

F E AT U R E S 31 Acco u n t i n g

FM LIFE 53 T h ea t re 55 Trave l

Benjamin Netanyahu P28 Mighty vengeance backfires Siya Kolisi P30 How SA’s warrior king did it

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December 21 - December 27, 2023

Cover: Shaun Uthum

. financialmail.co.za

editorials RAF’s TASTE FOR IMPUNITY A BAD OMEN

f one theme has risen above all else in political governance over this past decade, it’s the thinly veiled attempt by state institutions to keep extracting higher rent from taxpayers, while weaselling out of the responsibility to provide anything in return. The most obvious culprits include state utilities such as Eskom (whose prices have risen 450% since 2008, despite providing less power than ever), and crumbling municipalities which charge rates that bear no relationship to the “service” provided. But the ease with which state officials have been able to insert their proboscises into the public vein, with little obvious protest, seems to have emboldened other state-run entities. It’s a disturbing trend which civil society needs to monitor, and fight against, at all costs. Take the Road Accident Fund (RAF), set up in 1996 to compensate victims of crashes. In August 2022, RAF CEO Collins Letsoalo took a unilateral decision that the fund would stop processing claims from medical aids. Until that point, medical aids had paid for the expenses of members involved in accidents upfront, then claimed back from the fund. Medical aid administrator Discovery Health took the RAF to court in October 2022, and high court judge Mandla Mbongwe declared Letsoalo’s instruction to be unlawful. The RAF “is not entitled to seek to free itself of the obligation to pay full compensation to victims of motor vehicle accidents”, he said. He described it as “unfathomable” that Letsoalo’s fund chose to go “rogue and arbitrary”. Which would seem to be clear enough. Yet the RAF continues to reject claims from medical aids. So Discovery has gone to court again, arguing that Letsoalo and the RAF be held liable for contempt of court. The RAF’s Mampe Kumalo countered, unconvincingly, that it isn’t paying medical

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Ed i to r i a l Editor: Rob Rose. Deputy editor: Natasha Marrian. Writers: See bylines for writers. Assistant editors: Shirley de Villiers, Giulietta Talevi, Archie Henderson. Digital editor: Nelisiwe Tshabalala Managing editor: Kevin O’G ra d y. Contributing editors: Sarah Buitendach, Bruce Whitfield, David Williams.

schemes because of two new directives — not the earlier one declared unlawful. Kumalo said the RAF shouldn’t be forced to pay because it is a “financially ailing” social welfare fund. But even if that were so, why does this entitle the RAF to pick and choose what it’ll pay? It reeks of an arrogance all too evident in other instances too. Three weeks ago, the RAF board held up its middle finger to parliament when it said it would proceed with a court case against auditor-general Tsakani Maluleke, even though it had been told a year earlier by lawmakers to settle that case. In that instance, the RAF took another bizarre decision, to switch from international financial reporting standards to a new set of accounting standards — a move journalist Carol Paton said was designed to cause the RAF’s liability to drop by 90%, from R331bn to R34bn. Maluleke described this as a “material misstatement” in the RAF’s accounts, so it took her to court. Both these incidents smack of an unwillingness by RAF leaders to be accountable to the public which pays its salaries. On the first issue, medical aid members contribute to the RAF by paying a levy on every litre of fuel. Why should they be disallowed from benefiting from the fund they finance? Second, Letsoalo is an employee of a state fund — if anyone should comply with a court order and accept the authority of the auditorgeneral, it should be him. The same remarkable hypocrisy is evident in so many public offices funded by taxpayers: give us your money when we want it, but don’t expect anything in return. It’s the reason so many South Africans are sceptical of plans to create National Health Insurance (NHI). If parliament, and the government, can’t haul the RAF into line and insist it comply with something as black and white as a court order, what hope would there be for NHI? x Subeditors: Magdel du Preez (Chief), Dave Landau (Deputy), Dynette du Preez. Proofreader: Helen Smith. Creative director: Debbie van Heerden. Contracted artists: Colleen Wilson, Vuyo S i n g i swa . Graphics & statistics: Shaun Uthum. Photographer: Freddy Mavunda. Personal assistant to the editor: Onica Buthelezi. Office assistant: Nelson Dhlamini.

. December 21 - December 27, 2023

SUN COMES OUT he silly season traditionally throws up a few desperate transactions that companies might hope will be overlooked while market watchers are sunning their assets. Yet gaming giant Sun International’s proposed takeover of unlisted rival Peermont is anything but desperate. It might be controversial, though, as it will send the gaming group’s debt back to levels last seen when it bet on casino assets in Latin America. How the competition authorities view the proposed deal will also be interesting. If it goes through, the local casino sector will be a two-horse race between Tsogo Sun and Sun International, even if there are other sports-betting players such as Hollywoodbets and Betway. For Sun, the ace is Emperors Palace, Peermont’s flagship, highly profitable Gauteng casino, which will complement Sun’s casinos — Time Square and Carnival City — in the province. But Sun will also inherit from Peermont an array of small casinos in outlying areas. Perhaps bundling these together with some of Sun’s own smaller casino operations for sale would not only appease the competition authorities but also nudge debt down? x

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editor’s by Rob editor’s notenote by Rob RoseRose court, where judge John Smith ordered the government to produce a “revised” action plan, and the police to protect the buses. “It boggles the mind why it is so difficult for a law enforcement agency to appreciate that when armed assailants take potshots at moving buses, deleterious consequences inevitably ensue,” Smith said in his judgment. Again, rather than doing the obvious thing, the government appealed the ruling. Which left Intercape, as Ferreira put it, in a situation where “there is no plan, there is no protection, and the violence continues”. If anything, it escalated. On November 24, in the rural town of Dutywa, taxi drivers blocked 41 passengers from getting onto a bus as police watched from the sidelines. This continued for days, with passengers being intimidated and buses stoned. Intercape’s gambit in court last week — seeking a contempt order against Masemola and Mene, sentencing them to prison for 90 days if they don’t act — felt like a last throw of the dice. Ferreira says despite judgments in his favour, which should embarrass the politicians into doing their job, this hasn’t happened. This cuts to the heart of the issue infecting South Africa’s body politic: an inability of elected leaders to do their job, with nobody holding them accountable for this delinquency. “South Africa is now an incredibly dangerous place to live — if you go up Table Mountain, you get attacked; if you take the wrong road, you get attacked. I’ve never experienced anything like this, even in places like Mexico or Brazil. And it’s because criminals have no expectation they’ll be arrested,” he says. Intercape has opened 176 cases with the police, covering everything from assault and vandalism to murder. Yet Ferreira says there hasn’t been a single arrest in five years. It suggests that while people still open cases with the police, the service, under police minister Bheki Cele’s watch, has become little more than a first responder for the insurance industry, there to provide case numbers to underwriters. “Cele should be fired on the spot,” says Ferreira. “That is absolutely what President Cyril Ramaphosa should do if he wants to get our crime situation under control, but Cele seems to have political immunity, so he doesn’t have to perform.” It’s not as if these commissioners aren’t paid handsomely, by taxpayers, to do their job. Cele, for example, the person with political accountability for the police, is paid R2.54m a year. While Intercape has lost an estimated R50m in this longrunning case — including legal costs and damage to vehicles — it is far from alone in being targeted. The difference, however, has been Ferreira’s response. While some companies buckled and paid “extortion money”, Ferreira resisted. “The wolf that survives is the one you feed. I’ve refused to feed this one, because I know it’ll eat us alive. Others have taken a different approach, but I’m not that person,” he says. Other CEOs, especially the ones who cynically simply accept these “toll fees” as the “cost of doing business”, must ask themselves what their role has been in the demise of law and order in South Africa, Ferreira says. x

JUDGE NAILS TOP COPS FOR SITTING ON THEIR HANDS Intercape CEO prevails as the high court declares the police officials in contempt of a court order. If they don’t act now, jail awaits

“I

don’t want anyone to be jailed, I just want those in charge to do their job,” says an exasperated Johann Ferreira, who runs Intercape, the largest bus company in Southern Africa. “I’ve got to make sure my passengers are safe, and I’ve got a responsibility to make sure the police comply with the court ruling ordering them to do this. But if they ignore it and the police commissioner has to go to jail, then so be it,” he tells the FM. These fighting words came on the eve of a watershed ruling this week in which national police commissioner Fannie Masemola and his Eastern Cape subordinate, Nomthetheleli Mene, were declared to be in contempt of court for failing to implement earlier court orders to protect Intercape buses from eight years of unrelenting attacks from taxi operators. On Tuesday, Makhanda high court judge Motilal Rugunanan ruled that unless Masemola and Mene provide visible policing to Intercape, and report back to court within a month on the steps they have taken, they can be jailed. Ferreira says he had no option but to go this route: “I didn’t invite myself to this fight, and I didn’t ignore the court order,” he says. It’s a towering victory for the man leading the company started by his father in 1971, which carries 1.9-million people every year throughout the region, from Cape Town to Livingstone. More pertinently, he has distinguished himself as one of the few CEOs to fight back against ever-expanding industry mafias extorting companies out of existence, even as the police sit inert on the sidelines, ruminating over their metaphorical doughnuts. Intercape’s story is emblematic: since 2015, its buses in the Eastern Cape have been regularly attacked by taxi drivers and taxi associations protecting their turf. It was, Ferreira said in court papers, “one prong of a deliberate stratagem of extortion”, alongside demands that he “increase prices” and pay a “cash levy” (read: protection money) for using specific routes. He refused, sparking a wave of attacks on his buses. Scores of passengers were wounded, while bus driver Bangikhaya Machana was shot and killed in April 2022. Left to fend for himself, Ferreira won a court order in September 2022 against then transport minister Fikile “Fixfokol” Mbalula and officials in the province, ordering them to “develop a comprehensive plan” to protect the safety of “longdistance bus drivers and passengers in the Eastern Cape”. It will no doubt surprise you to learn that no such action plan emerged. So in August this year Ferreira went back to

December 21 - December 27, 2023

. financialmail.co.za

state of play by Natasha Marrian state of play by Natasha Marrian ZUMA SPURS ‘OPPOSITION OF A SPECIAL TYPE’

resident Cyril Years of pussyfooting around the ex-president The ANC’s loss of popular Ramaphosa’s support has been clear since have come back to bite the ANC administration 2016, and was set to deepen is paying the regardless of Zuma’s antics. A price for having failed to deal decisivemajor setback at the polls next year is inevitable, not ly with the recalcitrant Jacob Zuma. least because South Africans have little or nothing to His administration has treated Zuma with kid show for Ramaphosa’s promised reforms after gloves, perhaps most notably when Ramaphosa’s Zuma’s damaging decade in office — in fact, things pardon spared him from a forced return to the have become even worse. Estcourt prison in August. Zuma lieutenant Arthur Zuma’s announcement will probably affect the The trajectory ANC most in KZN and parts of Gauteng — the two Fraser, who had earlier freed his patron on medical of doom is parole, was also mollycoddled by the Ramaphosa most populous provinces — where polling had government. already showed it was highly vulnerable. likely to One might expect Zuma, comfortably ensconced The ANC in KZN faces the likely prospect of continue next in his taxpayer-upgraded Nkandla compound, to moving to the opposition benches. The IFP’s support year, not so while away his golden years in quiet retirement, but much because in the province is resurging, from 20% in 2016 to 26% no. Over the weekend he denounced the state of the of the party’s in 2021. The Zuma-endorsed MK Party may lure ANC under Ramaphosa, saying his conscience (he voters away from the ANC, the IFP and the EFF, but internal has one?) would not let him vote for the party under not enough to give it much clout. feuding but its current leadership. What is significant about Zuma’s announcement is because it has his move to unite MK and like-minded parties such He urged his supporters to join him in voting for mishandled the newly formed MK Party — which the ANC has as the EFF, the UDM and his earlier political project, every aspect accused of stealing the name of the real Umkhonto the African Transformation Movement. The character of public life of these parties is clear: they are elite projects, driven we Sizwe, which was disbanded at the end of the armed struggle. by powerful business lobby groups, former spooks Now Ramaphosa has no choice but to treat Zuma and even the criminal underworld, using the masses with the contempt he deserves; failing to do so will as voting fodder to capture the state. leave him looking even more impotent and weak. Mapungubwe Institute for Strategic Reflection The ANC in KwaZulu-Natal, which had been courting director Prof Susan Booysen describes this dynamic Zuma to campaign for it, has been forced to turn as “opposition of a special type” — referring to the fact against him. It described Zuma’s weekend that the parties are largely made up of disgruntled announcement as the highest form of ill-discipline. former ANC members. Zuma has effectively drawn a line in the sand that Such an alliance could yield interesting dynamics the ANC itself should have drawn some time ago. in KZN, Gauteng and perhaps the Northern Cape, What is crucial now is what this development means provinces where, to remain in power, the ANC will for next year’s elections. probably have to enter a coalition with someone. The ANC’s electoral support has been in The ANC national executive committee has steady decline over the past 15 years. It was already expressed its displeasure at the coaliunder Zuma that the party recorded its first tion deals that the party’s provincial strucdramatic fall, losing control of three of the tures have made with the EFF in Gauteng country’s eight metros in the 2016 local and KZN. After the Zuma snub for the government election. The trend continRamaphosa leadership, coalition agreeued in the national elections in 2019, ments with the EFF are likely to fall even held a year after Ramaphosa had further out of favour. replaced Zuma in the Union Buildings. But if the ANC did decide to co-operate Jacob In 2021, the ANC’s support declined with an MK-EFF-UDM grouping, Zuma’s Zuma again, falling below 50% for the first desperate bid to extend his political life time. would gain traction. Whether it feeds the monsters of its own The trajectory of doom is likely to creation will determine the pace of the ANC’s continue next year, not so much because of painful decline and ultimate removal from the party’s internal feuding but because it has office. Sadly, South Africa itself will be forced to mishandled every aspect of public life, from the suffer along with it. x economy to the criminal justice system. 6

financialmail.co.za

. December 21 - December 27, 2023

you said... letters

Jardine brings hope to SA

123RF/dontree

The word no-one wants to say

The ANC and its cadres have ruined this country. It is morally and financially bankrupt. Roger Jardine, equipped with struggle credentials and a successful business career, is someone we could all vote for. If the Multiparty Charter can agree that he is their presidential candidate and have his face on their posters we can fix South Africa. It is time all politicians stopped promoting their own political ambitions and put the country first.

Graham Barr and Brian Kantor’s column “Busting the Compound Returns Myth” (On My Mind, November 30-December 6) refers. I hate to sound like a stuck record, having given Esther Mukumbo a wind-up in April last year about it as well, but I’m afraid I have to once again bring up the word that apparently can never be mentioned in financial circles when talking about compound interest and the time value of money, whether invested in a bank or stocks and shares: inflation. As no doubt one of many hundreds of thousands who were conned in our earlier years by the slick salesmen selling us retirement annuities and the like that would bring us untold wealth in 30 or 40 years’ time, I eventually came to understand the definition of net present value, and the fact

that a rand today would be worth far less relatively than one back in, say, 1972. Barr and Kantor did a great job demystifying the wonders of compound interest, but they unfortunately said nothing about the inflation that is reducing its monetary value at the same time. Taking their example, if the rate of inflation were also 1%, then the two lots of R1,000, the starter stash and the interest 72 years into the future would, in today’s terms, be worth twice R488, or R976 — R24 less than when you started out. Not much of a win to me. I think the financial world, including journals like the FM, should perhaps try to help us poor souls with this unspoken word? It could really help.

Here today, gone tomorrow

is geared to a voting pattern where voters are enabled to cast votes for political parties. Though provision has ostensibly been made for independent candidates, the fact is that even during the previous constituency-based system, an independent candidate was last elected to parliament more than 75 years ago. The numerous pop-up political parties at national, provincial and local government level basically only serve the personal interests of the so-called leaders of the parties. They have a relatively insignificant political influence, in spite of some impressive views. Reality is not based on wishful thinking.

Living in South Africa often takes on a surreal quality. The ANC entertaining Hamas during the 16 days of activism against gender-based violence (GBV) is truly one of those moments. Hamas, let’s be clear, is proud of its massacre in Israel on October 7 and has vowed to repeat it until “Palestine is free”. In December the UN held a special session on sexual and gender-based violence during Hamas’s massacre called “Hear our Voices”. The event included survivors, first responders, police and legal experts who presented evidence. Hamas has denied that its fighters committed sex crimes, but there is substantial evidence of GBV: bodies of women found partially or fully naked, women with their pelvic bones broken, nails and different objects in female organs. There are eyewitness accounts — one is said to have watched Hamas terrorists gang-rape a young woman, mutilate her and then shoot her in the head. Despite the president and other government officials expressing how important eradicating GBV is, it’s A-OK to proudly lay out the red carpet for Hamas in South Africa. And will the ANC Women’s League speak out? I won’t hold my breath.

VA Volker Pietermaritzburg

Michelle K Blumenau Women’s rights activist

Suddenly the media is cock-a-hoop about a new potential “star” on the political horizon. We have had several in the past, but their bright light can be likened to that of a shooting star: their durability isn’t rooted. There have been several comments suggesting that potential leaders should consider aligning themselves with existing political formations that have established political infrastructure. Put differently, it is mostly gravediggers who start digging at the top; in public life the chances of success are invariably improved by starting at the bottom and working yourself upwards. South Africa’s present political system

Dave Stephens Gordon’s Bay

Paul McNaughton Stellenbosch

Government’s GBV hypocrisy

The FM welcomes concise letters from readers. Letters must carry the name and address of the sender. They can be sent to The Editor, Financial Mail, PO Box 1744, Saxonwold 2132. E-mail f m m a i l @ f m .co. z a

December 21 - December 27, 2023

. financialmail.co.za

at home & abroad by by Justice Justice Malala Malala

HOPE IN HARD TIMES Our story seems like a bleak Charles Dickens tale, but the best may be yet to come

or many South Africans, this year has sometimes looked and felt like we are living through Charles Dickens’s “the worst of times”. Load-shedding continues to hammer the economy. Transnet has stuffed up the country’s logistics, with cargo sitting at ports and on inland trains for weeks on end, unable to reach its destination. Parts of Joburg haven’t had water for nearly two weeks. The economy won’t grow by even 1% this year. Worst of all, corruption-accused former president Jacob Zuma, the Grinch who sold South Africa to the Guptas, is back, playing victim as usual and threatening to reveal lies he has been threatening to reveal for years. Yet the worst of times can be the best of times too. Much as I share many citizens’ concerns and fears about where we are today as a country, I cannot help but feel positive about the journey we are on. We are in transition and the events around the 2024 election campaigning bode well for South Africa. There are many reasons for this, but the first and main one is that with the 2024 elections our country is becoming a vibrant, multiparty democracy where power is gained and lost and exchanged by different political players. For 30 years we have taken it as read that the ANC will win elections. Those days are gone. Today the polls give us a very different reading of the future. In the national elections of 2019, the ANC received 57.7% of the vote. In the local elections in 2021 it plummeted to 47% of the

national vote. In November, the latest Ipsos poll put it at a miserable 39%. In October the Brenthurst Foundation/SABI Strategy Group poll put the ANC at 41%. The most optimistic picture for the ANC is presented by the Social Research Foundation survey, which said the ANC will likely get only 46% of votes cast in 2024. Power doesn’t always corrupt, but power that resides in one person or party for too long will absolutely corrupt that entity or person. Worse, power will corrupt any leader who does not face the possibility of losing that power. With the kind of results that will surely come out of the 2024 elections, South Africa will hopefully be ensuring that it dodges the bullet of becoming a state perpetually dominated by one party. Even if the ANC goes into a coalition at national level and in some provinces, those coalitions will represent only about 55% of the entire electorate, mitigating any radical policies. Radical policies would require the constitution to be changed. A constitutional

change would require a 66% vote in both houses of parliament. South Africa is becoming a truly multiparty, centrist country with contestation for power every five years. It’s becoming a democracy in reality, not just on paper. Even the Zumas of this world, thoroughly disgraced, are coming up with desperate attempts at political relevance through parties like his MK Party. What excites me even more is the fact that we see the emergence of some refreshing new leaders in the political space. I have written about what a fantastic addition Chris Pappas, the DA’s candidate for premier in KwaZulu-Natal, is to the political landscape. I have been impressed with former corporate executive and journalist Songezo Zibi, whose new party, Rise Mzansi, is making steady inroads in the political space. Even more impressive is how Zibi breaks the mould of the “big man” in politics. In this mould, politicians are always telling us what they are going to do for us. Pappas and Zibi’s impressive lineup of cerebral comrades are just the tip of the iceberg. There are many other interesting new voices — and new ideas — animating our politics as we head towards the 2024 election. They are slowly emerging as alternatives to the fascists, populists, and corrupted, self-obsessed losers we’ve had to choose from over the past three decades. It might not always seem like it, but we are in an exciting and potentially positive period of change for our country. The old is dying, the new is being born, and of course such a transition is full of bumps. That does not mean that this is the worst of times. It is a time of opportunity for those who can deal with and work through change. The future is ours to shape. x 123RF/yupiramos

financialmail.co.za

. December 21 - December 27, 2023

Digging up unusual, interesting tidbits in and around the business scene

SEA & SAND

Finding SA’s dirtiest holiday beaches Many beachgoers this summer face the danger of sharing the sea with ‘E coli’ nasties Shirley Jones

● There are reports of sewage pollution off Western Cape beaches and rising E coli levels off Eastern Cape beaches, but it is KwaZulu-Natal that is struggling the most after the floods of 2022 wreaked havoc on water and sewerage infrastructure. The KZN south coast has five (out of a national total of 54) blue flag beaches. It also has seven beaches in the blue flag pilot programme. Durban, which abandoned the blue flag system in 2008, has since returned to the fold. During the 2020/2021 season, 12 beaches had blue flag status. eThekwini spokesperson Gugu Sisilana tells the FM that the municipality is still rebuilding roads and sewerage networks damaged by the floods, but water quality off the city’s beaches is “not as dire as it is in other coastal cities”. On December 8 she told the FM the quality has consistently been “excellent or acceptable … especially on Durban’s popular

Red flag: South Beach. Durban abandoned the blue flag system in 2008 but has since returned to the fold Jono Wood

beaches along the Golden Mile”. Just a week later Durban’s main swimming beaches were closed again because of high E coli levels after heavy rains. Brett Tungay, east coast chair of the Federated Hospitality Association of Southern Africa, says Durban is not to blame, it’s just “where the crap ends up”. “The sea has nothing to do with it. It is just the final recipient. The problem starts in Pietermaritzburg and the Dusi basin, which flows into the uMngeni and to Durban.” Flying over the area recently, he ob-

served that the Dusi “is not a river, it’s an effluent waste disposal channel. When the water level drops, you can see all the toilet paper. It’s disgusting.” He says pleas from struggling local businesses a year after the floods have fallen on deaf ears. The province’s water problems are not just in the sea. Tungay says there are municipal water supply or quality problems along the south coast and in Durban. “In Ugu [municipality] there’s a hell of a lot of water but it is not getting to the taps.” Resorts are drilling boreholes and installing water

tanks. “Tourism businesses are having to pay municipal rates but also having to provide their own services,” he says. Nelson Mandela Bay does not report E coli levels and a local conservancy has gone to court to force it to do so. Last month an independent investigation found that blue flag beaches at Hobie and Humewood had good water quality. The beaches at St Georges Strand were clean but high levels of E coli were found at nearby New Brighton beach. Of the smaller beaches along the Garden Route, Herold’s Bay, in the George

December 21 - December 27, 2023

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ANOTHER WEEK

Reuters/Maxim Shemetov

municipality, has temporarily closed its beach because of high levels of E coli. It has also lost its blue flag. The nearby Victoria and Wilderness beaches have retained their blue flag status. In the Kouga municipality in the Eastern Cape, popular destinations such as Jeffreys Bay, St Francis Bay and Cape St Francis have good seawater, enabling local authorities to focus on banning alcohol from beaches. Mayor Hattingh Bornman says the motivation is to ensure people’s safety. In Cape Town, which has three sewage outfalls on the western shoreline of the peninsula, Camps Bay and Clifton have retained blue flag status. Monitoring of coastal water quality is done by an independent lab. It samples water at It’s an effluent 99 sites waste disposal twice a channel. When month the water level and the drops, you can results see all the are cattoilet paper. egorised It’s disgusting as excellent, good, — Brett Tungay sufficient or poor. High bacteria counts have been found at a number of beaches including Fish Hoek, Strandfontein, Hout Bay and the Camps Bay tidal pools, according to the city’s water quality review. Water quality is “chronic” at central False Bay beaches, Lagoon beach at Milnerton, from Macassar to Gordon’s Bay and at Three Anchor Bay. Remote stretches of the coastline are usually free of such problems. Indeed, some provide unusual discoveries. In Port Nolloth, the water may be cold but the beach is pristine and recently provided excitement for scientists who found an iridescent blind mole, long thought to be extinct, in the sand dunes. x

WAR AND PEACE Moscow is all lit up for Christmas with lights and decorations while 872km to the south its forces light up the Ukrainian capital, Kyiv, with bombs and missiles. The Christmas contrast could not have been greater since Russia’s war against neighbouring Ukraine began almost two years ago BY THE NUMBERS

HOW MUCH ARE COMPANIES INVESTING IN AI? Total global corporate investment in artificial intelligence*, ($bn) 276.1

189.6 146.7

95.6

The analysis estimates that total M&A, minority stake and private investments and public offerings amounted to $934.2bn from 2013 to 2022

79.6 53.7 14.6

2013

2014

25.4

2015

33.8

2016

2017

2018

2019

2020

2021

*M&A, minority stake investments, private investments and public offerings

. December 21 - December 27, 2023

Stanford University in the US recently released figures showing how corporate investment in AI has grown around the world. The figures are based on the data tracking of investments of more than 8-million public and private companies

2022 Source: Statista

DINNER PARTY INTEL...

“He’s a little bit out of touch with what’s going on.” Former All Black star Sonny Bill Williams on Eddie Jones being appointed coach of Japan’s rugby team, ahead of South African Frans Ludeke. Williams also said the appointment was a “disgrace”

1. To catch a kreef

TRENDING

Fossil fools of COP28 Poetry to remind the summiteers, doggerel to ridicule them

Big Oil: COP28 president Sultan Ahmed Al Jaber Reuters/Amr Alfiky

Paul Ash

● Quinquireme of Nineveh from distant Ophir, Rowing home to haven in sunny Palestine, With a cargo of ivory, And apes and peacocks, Sandalwood, cedarwood, and sweet white wine. With apologies to John Masefield but his poem Cargoes is a blueprint of the unholy resource extraction that has brought our fragile blue planet to its knees. Stately Spanish galleon coming from the Isthmus, Dipping through the Tropics by the palm-green shores, With a cargo of diamonds, Emeralds, amethysts, Topazes, and cinnamon, and gold moidores. As the hot air from COP28 dissipates over the aptly named Empty Quarter of Arabia, the delegates have jetted home (for no-one came by foot or bicycle or even electric train to the UAE) with promises to wean us all off fossil fuels and, eventually, cull methane-spewing beasts on factory farms.

The topics you have to be able to discuss this week

Kreef season opened at the weekend on the west coast, but only for “recreational fishermen” and only for 12 days. Between now and April 1, there are only 10 designated days left. Anyone older than 12 can buy a R94 permit, which allows four of the west coast’s famous rock lobsters to be caught. The problem is finding the elusive crustacean — or a post office that sells permits.

2. Bloodbath in the Arena

Dirty British coaster with a salt-caked smoke stack, Butting through the Channel in the mad March days, With a cargo of Tyne coal, Road-rails, pig-lead, Firewood, ironware, and cheap tin trays. As Big Oil and Big Meat, whose mendicant, rentseeking lobbyists were a vocal presence at COP28, continually remind supporters of Deep Forest and other impecunious and bothersome Earth-first dreamers, they’re the ones paying the bills and creating economic growth. Unlike some lost tribe of

the Amazon who would rather be left alone to live out their simple hunter-gatherer lives and not be chopped, mined, smothered, coerced, killed, corrupted and evicted from their patch of the planet. So, in the spirit of the times, and again with apologies to Masefield, a final stanza for Cargoes: Private jet of Big Shot leader Flying to Dubai “to save my precious time” With a cargo of bombast, Hot air and vapour trails, And smirking at the rest of us boiling in the grime. x

The Arena Group (not to be confused with Arena Holdings, publisher of FM) is in turmoil. The US digital publisher, whose titles include Sports Illustrated, has fired its CEO, Ross Levinsohn, amid a C-suite bloodbath in which three other executives were also dismissed. It came after an embarrassing debacle in which Sports Illustrated published reports with fake bylines and pictures generated by AI.

3. An effing lot of swearing A study of more than 60,000 TV shows and films has revealed that the annual number of swearwords they contain has rocketed from fewer than 5,000 in 1985 to more than 60,000 last year. The data, compiled by the recommendation service Enjoy Movies Your Way, using AI, shows that “fuck” has already been uttered more than 22,000 times on screen this year, after hitting a high of 30,000 in 2022.

December 21 - December 27, 2023

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DIAMONDS & DOGS BY JAMIE CARR

If you fancied a frock from a talented yet little -known s ea m s t re ss operating out of a yurt on the outskirts of Ulan Bator, this was the website for yo u 12

OpenAI

Farfetch

Smart move of the year

Going out of fashion

There’s no doubt that AI has been the story of the year. Just as investors were growing weary of the tech sector, and blowing a particularly resonant raspberry at the metaverse in particular, OpenAI launched ChatGPT, and a tsunami of funding reinvigorated the market. Suddenly every man and his dog were launching start-ups to harness this incredibly powerful technology, the chipmakers that powered it couldn’t churn them out fast enough, rivals were scrambling to launch their own AI models and those that got in early, like Microsoft, were looking distinctly smart. It was certainly an eventful year for OpenAI CEO Sam Altman, who was given the order of the boot by its board in November, only to be reinstated days later after pressure from its employees and investors, including Microsoft boss Satya Nadella. Altman was clearly never going to win the big prize of Time’s person of the year — no tech bro is ever going to rival the might and majesty of Taylor Swift — but he can be happy to walk away with the lesser gong of Time’s CEO of the year. In an interview with Time, Altman says he believes artificial general intelligence “will be the most powerful technology humanity has yet invented”, and that as a result by the end of the decade “I think the world is going to be in an unbelievably better place”. There is clearly a chance that this pivots towards a Robert Oppenheimer moment with the old “Now I am become Death, the destroyer of worlds” routine, but let’s hope that Altman is correct. x

Investors who have watched a few promising online fashion marketplaces flare up and then fizzle out may well take a peep at Farfetch and be reminded of the fragrant Britney Spears’s seminal work Oops! ... I Did It Again. Farfetch began with the idea of connecting fashion-conscious consumers with high-quality niche brands the world over, so if you fancied a frock from a talented yet little-known seamstress operating out of a yurt on the outskirts of Ulan Bator, this was the website for you. Unlike Net-a-Porter, Farfetch acted as an intermediary between buyer and brand without the risk and costs of owning any stock, and by the time it listed on the New York Stock Exchange in 2018 it had started licensing its technology to major retailers such as Harrods to sharpen up their online offering. Its share price took off in the golden age of sofa-based retail during the pandemic, reaching a peak valuation of $24bn in 2021. However, it struggled to attain profitability and failed to attract the top luxury brands, which preferred to retain control by selling their products themselves. Farfetch diversified by buying Browns, a real-life fashion boutique, and a suite of fashion brands, but investors remained unconvinced, particularly when it became apparent that founder José Neves was about as keen to relinquish control as an Italian mother-in-law, retaining about 70% of the voting rights with a mere 15% of the equity. The market capitalisation tumbled from $24bn to $220m as it became apparent that the company was rapidly running out of cash, and if a white knight does not appear sharpish the end is nigh. x

financialmail.co.za

. December 21 - December 27, 2023

good week

Six years after being kidnapped in Libya, South African paramedic Gerco van Deventer, 48, was freed at the weekend, his release facilitated by Gift of the Givers. Van Deventer was seized in 2017 by an unnamed group and sold to militant Islamists linked to al-Qaeda in Mali, which then demanded a $500,000 ransom. Gift of the Givers, which oversaw his release on Mali’s border with Algeria, said he was returning to his wife and son in South Africa. The news was confirmed to the BBC by a Mali security source. x

bad week

Not even the southeaster that howls through his clifftop refuge in Hermanus would have put the wind up Markus Jooste as much as a recent announcement from Oldenburg in Germany. A prosecutor in the regional court there said an arrest warrant had been sought for the former Steinhoff CEO. This is the court that sent former Steinhoff CFO Dirk Schreiber to jail in August. The warrant won’t see Jooste clapped in irons soon; extradition can be a tortuous process, as Ronald Lamola has found with the Guptas. But the law is closing in. x

PALAEONTOLOGY

Is it a bird, is it a dinosaur? Not exactly ... UCT scientists take a closer look at evidence left by creatures that walked in Lesotho 210-million years ago Abrahams and a colleague, Prof Emese Bordy, visited the ● Across the floodplains of sites in Lesotho and examined prehistoric Southern Africa a published material about the mystery animal stalked the tracks. Much of this work reland. All that scientists know flected what French priest and about the creature, which exis- trace fossil expert Paul Ellented 210-million years ago, is berger discovered between the that it was three toed and left 1950s and 1970s. tracks that look identical to that The two geologists also obof modern birds. tained detailed descriptions of For decades academics footprints from an 80m-long have puzzled over these antrack site in Maphutseng in cient footprints, wondering Lesotho. They were able to whether they were left by an identify two distinct morphoearly dinosaur, a lizard relative logies. One, they argue, belongs or perhaps something else. Re- to certain non-bird dinosaur searchers at the University of tracks, the other looks similar Cape Town (UCT) have reto modern birds. These footcently reassessed the fossil re- prints had been grouped by cord and examined scientists as having prints that were been left by a found at four sites in Even the angle creature called Lesotho more Trisauropodiscus. of the sunlight closely. plays a big role No fossil remains of By using 3D pho- in whether you Trisauropodiscus togrammetry they have so far been can see were able to obtain a found — only its fo o t p r i n t s clearer understandfootprints. ing of what might The animal — Miengah Abrahams have left those walking on these prints, which are the early bird-like feet earliest known examples of a inhabited a land quite different bird-like foot. from what Lesotho is like “We don’t think it’s a bird, today. This was around the given how old it is. It is really time of a mass extinction that ancient, as it predates basal wiped out as many as 75% of all birds [primitive birds] by about species and would have 60-million years,” says ushered in the rise of the Miengah Abrahams, a geologist dinosaurs. at UCT, who is the lead author Abrahams says: “You would of the paper about the research have had these meandering that was published recently in rivers, which were then rethe journal Plos One. placed by ephemeral streams Shaun Smillie

These mystery footprints, dating from 210-million years ago, were found in Lesotho. The hunt is now on to find the fossil remains of the animal that left them. Picture: Miengah Abrahams

with lots of extensive floodplains. And obviously, animals are always going towards water. That’s why all these footprints were preserved.” For years she has been on the hunt, tracking down Ellenberger’s discoveries. Finding these sites has its challenges, however — when the Frenchman was walking the hills of Lesotho it was a time before GPS, and the map co-ordinates he scribbled down were sometimes off. “Sometimes we can narrow it down to a hill and then, being geologists, we know which rocks are more likely to preserve the footprints. Even the

angle of the sunlight plays a big role in whether you can see footprints,” says Abrahams. But when they do make finds, it is exciting. “You have a treasure map, and roughly the location, but you still get that thrill of discovery when you actually find it, because we aren’t always successful.” To get an eyeball on just what left these bird-like footprints across what is now the Lesotho landscape, however, fossils need to be found. “Hopefully, in my lifetime, my palaeontology colleagues will find something and will say: ‘Oh, hold on, these match those footprints,’” says Abrahams. x

December 21 - December 27, 2023

. financialmail.co.za

McLEOD COMPUTING

Vodacom and MTN flex their way into a price war 123RF

There is Christmas cheer for consumers as the cost of voice and data falls

Duncan McLeod

● Mobile telecommunications is getting cheaper in South Africa — and consumers can thank an emerging price war between the country’s two largest network operators for the plunging cost of voice and data services. MTN fired the first salvo in September, when it unveiled a new tariff plan called SuperFlex. Now Vodacom has responded, rolling out PowerFlex, which is similarly aggressively priced (and named — something MTN cannot be amused about). MTN SuperFlex offers datarich month-to-month contracts — 10GB for R299, for example. That pricing is not out of the ordinary in 2023 for a large data bundle, except the 14

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company went much further: SuperFlex also offers unlimited calls and SMSes to any local network, all included in the price. And there’s no lock-in or long-term contracts; you simply bring your own device or load the cost of a new phone onto the tariff plan. It’s built as an online SIM-only product, and there’s no need to visit a store, as MTN will deliver the SIM, free of charge. There’s also a 15GB version of SuperFlex (also including unlimited calls and texts) for R399 and a 20GB option for R479. MTN hasn’t disclosed how many people have signed up for SuperFlex, but logic dictates that it must be considerable, given its relative affordability in severely constrained economic times. Vodacom’s PowerFlex, meanwhile, which the company launched on its website recently without much fanfare, also offers unlimited all-network calls and texts for a fixed monthly fee. Unlike SuperFlex, though, it comes in only two

. December 21 - December 27, 2023

data options: the curiously sized 17GB (for R449) and 22GB (for R579). Though Vodacom doesn’t offer an equivalent to MTN’s 10GB/R299 plan (perhaps it’s worried about its margins), the pricing is still aggressive — and it had to be to respond to SuperFlex. Both SuperFlex and PowerFlex offer data with 60-day validity. The MTN data can also be shared with up to five other users; it’s not clear if the same is true of PowerFlex. Also, Vodacom’s plan is billed as “promotional” — it is set to end on March 31 2024 — while SuperFlex appears to be more permanent in nature. Of course, Vodacom may have little choice but to continue to offer PowerFlex beyond March or lose market share to its crosstown rival. The “yellow network” isn’t standing still either. Just as Vodacom was launching its response to SuperFlex, MTN upped the ante, launching aggressively priced data bundles

for prepaid customers. There are no free calls or texts on offer this time, but the tariff plan, which is called Super Data, offers 30-day validity and comes in three tiers: 30GB for R215, 70GB for R299 and 200GB for R399. The 200GB bundle works out to just R2/GB — or about 1,000 times cheaper than the standard ad hoc rate of R2/MB (R2,048/GB) for data that was common in the industry just 15 years ago. How will Vodacom respond? You can be sure it will devise something similar, even if it doesn’t really want to — it can’t afford to lose market share. The pressure may be felt more by South Africa’s smaller telecoms players, Telkom and especially Cell C, which don’t have the same deep pockets as their bigger rivals that would allow them to engage in a price war for a sustained period. That must be particularly concerning for the new management team at Cell C, led by former Vodacom executive Jorge Mendes. Cell C’s balance sheet remains stretched, despite the recent recapitalisation led by its largest shareholder,

JSE-listed Blue Label Telecoms. A price war is probably the last thing Mendes needs as he tries to get Cell C onto a stronger footing financially. A protracted price war between the industry’s two biggest players would likely make an already difficult turnaround job that much harder. In Cell C’s favour is that it no longer operates its own radio access network, having strategically outsourced this responsibility (and the huge costs involved) to Vodacom and MTN. Telkom is still committed to deploying and operating its own network infrastructure, but one must wonder for how much longer. The emerging price war puts Telkom — which was for years able to undercut its bigger rivals in data pricing thanks to its having access to the right radio frequency spectrum bands — under greater pressure. Telkom lost much of its spectrum advantage in the 2022 auction at which Vodacom and MTN spent billions to buy many of the best spectrum lots on offer. When the Independent Communications Authority of South Africa holds its next auction, which has been pencilled in for next year, its advantage will be eroded even further. The entire sector is under pressure, for a variety of reasons. One of those is that investors are starting to fret about the impact of a protracted price war on earnings. Share prices are flirting with multiyear lows. A few years ago, an activist “data must fall” campaign went viral on social media. Politicians latched on to it, demanding that greedy mobile operators slash their prices. It turns out there was never really a cartel. And data, and the price of telecom services broadly, have “fallen”. x * McLeod is editor of TechCentral

PATTERN RECOGNITION

Hallucinate, the perfect word for 2023 It’s apt for the weird goings-on in South Africa, where blackouts have been at their worst with Russia’s Gazprombank Africa, and then a 2,500MW nuclear deal (read “with Russia”). ambridge Dictionary’s word of Days later news came that ANC MPs are the year is “hallucinate”. It’s not rushing through the new Electoral Matters a throwback to the acid-popAmendment Bill over the Christmas period. It ping 1960s but the bizarre will have public hearings at the same time as choice for when this new those for contentious new home affairs legisgeneration of AI chatbots, well, lation, meaning less time for public participamakes stuff up. tion, according to News24. But, as writer Naomi Klein wrote in May: What does this bill enable? The president “Why call the errors ‘hallucinations’ at all? will be able to set the limits for donations to Why not algorithmic junk? Or glitches?” political parties and declare from which I agree. Talk about cultural expropriation. amount these must be publicly declared. The hippies would sue if they were able to get I feel like we’ve experienced an economic it together after all these years. coup — all to keep the ANC in power and to Hallucination, says Klein, refers to the pay off its R150m debt before next year’s “mysterious capacity of the human brain to election. perceive phenomena that are not present, at As Google CEO Sundar Pichai said this least not in conventional, materialist year: “No-one in the field has yet solved terms”. But the real “warped the hallucination problems.” hallucinations” are being had by Indeed, generative AI isn’t alThe hippies the tech CEOs who “unleashed” ways as good as it seems. Apart AI chatbots. from hallucinations, the video would sue if they “These folks are just triplaunch of Google’s new AI enwere able to get it ping,” Klein writes. “Generative gine, called Gemini, which “highlights some of our favourAI will end poverty, they tell together after all ite interactions with Gemini”, us. It will cure all disease. It will these years according to the official demo solve climate change. It will video, was “faked”, as online make our jobs more meaningful newspaper TechCrunch concluded. and exciting. It will unleash lives of What seemed like a smooth video leisure and contemplation, helping us was actually many still images. Google admitreclaim the humanity we have lost to late ted “we made a few edits to the demo (we’ve capitalist mechanisation. It will end lonelibeen upfront and transparent about this)” — ness. It will make our governments rational something TechCrunch points out the search and responsive.” giant did not admit until Bloomberg noticed. Hallucinate is an apt word of the year, for Gemini underpins Google’s chatbot, called other reasons, and certainly in South Africa, Bard, which made a mistake when it was where blackouts have been at their worst. It’s launched in February and caused $100bn to a word that sums up how so many of us have be wiped off its market value. Bard’s mistake felt about the things we’ve seen in 2023. — not knowing when the first photograph of a Surely, they can’t have been real, we say to planet outside our solar system was taken, ourselves, because they are so surreal. which was 19 years ago — isn’t a hallucination. In the week in December that the sheriff of It’s just a mistake. x the court arrived at Luthuli House to collect on Shapshak is editor-in-chief of Stuff.co.za and executive a R150m debt judgment, the broke ANC’s director of Scrolla.Africa cabinet ministers announced a $200m deal

Toby Shapshak

December 21 - December 27, 2023

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BY THE NUMBERS

ORGANISED CRIME IN AFRICA Overall crime levels (out of 10)

5.08 North

Fauna crimes were the most prevalent criminal market in Southern Africa, which is one of the largest sources of live animals and animal parts in the world

5.44 5.88

West

East

5.06

Fauna crimes grew by +0.30 points, to 5.65, driven mainly by SA (8.0) and Mozambique (8.0), followed by Madagascar (7.50) and Botswana (7.50)

Organised crime syndicates, mainly from countries in Southeast Asia, o en work with their local counterparts and corrupt officials

Despite conservation efforts and the arrests of major kingpins in some countries, the poaching of wildlife, especially elephants, rhino and pangolins (in Zambia, Malawi and SA), continued unabated

Central Southern Africa’s top four crime countries

4.83 Southern

7.18

6.20

5.58

5.47

Mozambique

Madagascar

Zimbabwe

Source: Enact (Enhancing Africa’s response to transnational organised crime)

HOT PROPERTY

WHERE: Hillcrest, KwaZulu-Natal PRICE: R16m WHO: Tyson Properties

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financialmail.co.za

. December 21 - December 27, 2023

PROFILE Matthew Hirsch

● Axolile Notywala may not operate in the full glare of political publicity, but he’s as committed as Rise Mzansi Western Cape convener any other party worker ahead of next year’s general election. Notywala is campaigning on the streets of poor communities in places such as Khayelitsha in Cape Town, where he has been active in social movements for the past 15 years. He has thrown in his lot for 2024 with Rise Mzansi, one of the new political parties on the block which says it has 200 organisers across the country. The party was officially launched in April by Songezo Zibi and former DA Youth member Makashule Gana. They have been recruiting business leaders and young activists such as Notywala, who joined last year and is the Western Cape convener. He says Cape Town’s wealthy areas and tourist atEarly start to 2024 for canvasser on the ground tractions don’t reflect reality for most people in the city. new, he says, but refuse collec- These are spaces where we Crime is a big issue for everytion has been a problem for at have many young creatives one, but in the parts where least 10 years. who do not have the necessary Notywala works extortion is Notywala believes his party support.” especially rife. “It’s primarily will win 7.5% — about 1.8-milNotywala wants everyone affecting townships and people lion votes. “We have organisers to be involved in shaping a who are just trying to make a in communities speaking to better future for South Africa. living. People are scared to people daily. This is not some- “Particularly the middle class, start their businesses because thing that you will see on social because they’ve got a certain they know they have to work media.” class privilege and they’ve got for someone. They have to pay He says education should social capital that they can use someone,” he says. focus on building skills. “We and contribute towards chanOn a more prosaic level, so have not provided enough sup- ging the country. is refuse collection. “Khayelitport to FET [further education “If you look at extortion and sha smells like a dumping site and training] colleges.” Arts, gang violence, it happens because rubbish has not been culture and sport have also primarily in townships. When collected for months. This is been neglected, he says. there’s nothing more to extort the government’s responsibil“Sometimes, if you get a soccer in townships, people are going ity — you start to see these ball, there’s no field to train. to come for the middle class. inequalities.” Extortion may be

Axolile Notywala

It’s going to come to the point where you can’t drive your car without having to pay someone,” he says. “If we don’t care about these things that affect the working class, they are going to affect us.” Elections analyst Wayne Sussman says Notywala can build on his contacts and name recognition in the townships. “He will be competing against Zackie Achmat [an independent candidate] and GOOD, especially the former for the social justice voters in the city bowl and townships. Some of these voters will be disaffected former ANC voters.” Rise Mzansi has been one of the first parties to get election posters up. “It even upstaged some of the more established political parties in the first voter registration weekend,” says Sussman. “Its provincial convener has strong links with the traditional townships and it’ll hope this pays some dividends as we go into the election.” He says 7% would be a remarkable achievement for a new political party, especially as the EFF got 6% in its debut in the 2014 elections. “I think that is easier said than done. I do think that we are in for a very fluid election. This is going to be the most exciting election since 1994.” Sussman says that while crime and service delivery issues will form part of the elections, they won’t be the main issue. “The elections will be fought on a range of matters. I don’t think it will be the principal issue, but it might be a rallying point for opposition voters.” x

Campaigning out of the spotlight

December 21 - December 27, 2023

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BOARDROOM TALES BY ANN CROTTY

CAs vote for themselves Saica crows about a survey that ranked local CAs as the most trusted in eight countries — but it’s a hollow achievement n its website, the South African Institute of Chartered Accountants (Saica) explains that its disciplinary process “plays a crucial role in maintaining the integrity of the profession and protecting the public interest”. It goes on to tell us that through the exercise of professional authority over members, the institute protects the public from unscrupulous practices and unprofessional or unethical conduct. Well, there wasn’t much sign of any of that at Saica’s recent disciplinary hearing of one of its members, Graeme Rigby, who had been accused of gross negligence, dishonesty and bringing the profession into disrepute. The charge was based on a complaint lodged with Saica in 2021 by Simon Mantell of Mantelli’s Biscuits and related to a flawed tender process. In 2013 Mantelli’s was awarded a contract to supply salty snacks on SAA flights. The award was subsequently withdrawn, unlawfully, and given to AVI subsidiary Ciro Beverage Solutions. It was in his role as an executive of Ciro that Rigby, a chartered accountant (CA), ended up in front of a Saica disciplinary committee. That sounds like good news. If a contract has been awarded irregularly, then people should be held to account. But Saica made such a mess of the case

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that by the time the hearing ended Rigby’s lawyer was demanding punitive costs against the institute for the suffering his client had endured as a result of the bungled process. And let’s not forget about Mantell, which seems to be what Saica wanted to do. Having pursued the process doggedly for two years, Mantell was hindered, by Saica, from participating in the hearing. A bizarre move given that his absence weakened Saica’s case. Essentially, Saica achieved a remarkable outcome, one in which both complainant and defendant lost out. As did Saica’s reputation. The appalling way Saica conducted the disciplinary action should be seen in the context of the statement issued by the institute in January 2022 soon after the release of part 1 of the Zondo report. “Saica confirms it will be investigating all members mentioned in the Zondo commission report,” it promised. Since that bold statement, Saica has held precisely two disciplinary hearings. The first in February this year related to charges against former SAA board member Yakhe Kwinana. The charges relied heavily on work done by the Zondo commission. Kwinana was fined R6.1m and barred from acting as a CA. And then, 10 months later, there was the Rigby hearing for which Saica relied entirely on affidavits and records supplied by Mantell and Rigby, doing no

. December 21 - December 27, 2023

investigation of its own. When challenged about this, Saica told the hearing it was entitled to do so by its bylaws. Don’t expect to see much improvement on this grim performance in the years ahead. Saica’s outgoing CEO, Freeman Freeman Nomvalo: South Nomvalo, beAfrican CAs show lieves he is runresilience and excellence ning a top-notch organisation. Indeed, one of the best of its kind of South African CAs are an in the world. outstanding bunch with heaps “South African CAs have of integrity, but there is a conearned the top position in a siderable number who are not. groundbreaking global profes- And before we all get too carsional trust survey conducted ried away with getting a No 1 by Edelman, a respected [mar- ranking, we should look a little ket] research firm, on behalf of closer at the survey. Chartered Accountants WorldIt seems 200 “financial dewide,” boasted a recent Saica cisionmakers” in South Africa media release. It seems 1,300 — CAs perhaps? — completed a participants took part in the 15-minute online survey in survey that covered South which they gave a glowing acAfrica, England, Scotland, count of their country’s CAs. Wales, Northern Ireland, Even more glowing than the Ireland, Australia and New ones given by their colleagues Zealand. in the seven other countries. Saica assumed this was a It’s difficult to know what, if major accolade, with Nomvalo anything, to make of the survey referring to the resilience and results. excellence shown by South It would be worrying if Africa’s CAs and pointing out: Saica used them, and not the “Much of this success is also inept way it enforces discipline, due to the hard work of all at as a yardstick to measure its Saica who daily fly the flag for performance. If it is dazzled by the profession.” such survey results the public No doubt the vast majority will suffer. x

FEATURES An in-depth look at the hot button subjects of the day in SA and around the world

SPUTLA: NINE MONTHS ON

HELD TO ACCOUNT

FLAWED CAPE FANTASY

BROKEN PROMISES

As SA has sat in the dark, it’s looked to electricity minister Kgosientsho Ramokgopa to fulfil his one mandate and keep the lights on

With accounting and auditing regulatory bodies already under scrutiny, Saipa is the latest one to fall under the integrity spotlight

The idea of Cape independence is a chimera. To co-opt a Palestinian slogan to the cause is the epitome of crass

Nine years after their evacuation due to flooding, some Zimbabweans say they’ve been cheated out of compensation

December 21 - December 27, 2023

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cover story / newsmaker No-one has been more in the public eye this year than electricity minister Kgosientsho Ramokgopa. As South Africa has sat in the dark, it’s looked to him to fulfil his one mandate and keep the lights on Natasha Marrian & Claire Bisseker

hat do you do if you have one job — a complex, fraught job — and the fate of the national economy depends on it? You dive deep into the problem and immerse yourself in it, and hope you succeed despite the odds. You also get back up when you don’t, which is more often than not. This is how electricity minister Kgosientsho Ramokgopa has spent the past nine months. Though, from the outside, it may look as if he’s not been too successful. South Africa has, after all, spent much of the past year in the dark. Independent energy economist Lungile Mashele calculates the country has experienced about 332 days of loadshedding — and at higher stages than before. By another calculation, over the 153 days of winter (April 1-August 31), the country endured outages every day, with 55 days spent at a maximum of stage 3; 42 days at stage 4; and 39 days at stage 6. In other words, during winter the economy experienced stage 6 levels of load-shedding in one day out of every five. This despite the utility chugging through diesel at a rate of knots. Of course, this can hardly be pinned on one man — but as the minister directly responsible for load-shedding, Ramokgopa has to be feeling the pinch.

KGOSIENTSHO RAMOKGOPA: NINE MONTHS ON

A mandate for change Ramokgopa’s appointment by President Cyril Ramaphosa nine months ago came as a surprise to both the ANC national executive committee and the cabinet. But Ramaphosa had a strategy: Ramokgopa was to implement his energy action plan (EAP) and end loadshedding, a task on a par with taking a 20

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. December 21 - December 27, 2023

rocket ship to the moon — from Waterkloof. Ramokgopa came across as cocky at first, but it quickly dawned on him that the task was Herculean. So he declared early on that while scheduled blackouts wouldn’t be easy to end, he could reduce their intensity. Hollow words, given the return to stage 6 load-shedding in November. For Ramokgopa, it’s been something of a shock. “It has been a deep dive of getting to the core of the complexities behind the energy challenge and what is required to resolve it — all of which has been an eye-opening experience, which clearly sets out and crystallises the historic challenge we are dealing with. The situation we find ourselves in is incredibly complex and is a result of decisions made over the last 20-odd years,” he tells the FM. He goes on to explain how his mandate is to reduce the severity of loadshedding and ensure energy security in the longer term. “In the last nine months I’ve been immersed with this core task, which has also been a heartening experience, seeing the level of support and dedication from Eskom employees in finding solutions and being passionate about the work they do despite the cynicism and criticism from the public.” He argues that there’s a core of competent, highly motivated people at Eskom who are acutely aware of the impact of load-shedding on the economy. One of these is Eskom’s new CEO Dan Morokane, who returns after leaving during the height of state capture. And the recent appointment of former Sasol executive Bheki Khumalo as head of generation is a game changer, say analysts. They’ll have a hard task turning things around, if the utility’s interim results for the six months ended September are anything to go by. Plant availability continued to deteriorate over the period, resulting in more frequent and higher stages of load-shedding than the previous year; the energy availability factor (EAF) fell to 55.3%, lower than its target of 60%; renewable and independent power producer programmes delivered less than their targets, contributing to the generation shortfall; and primary energy costs increased 10.1%, from R77.3bn in September last year to R85.1bn. Ramokgopa is relatively sanguine. He says it is crucial to note that the loadshedding over those six months came on the back of 2,400MW out of service at the Kusile power station as well as a

long-planned project at Koeberg. “Our main priority was to support the team so as to bring these units/capacity back into the grid as soon as possible. We can confirm that all units at Kusile were brought back to service earlier than the targeted date, with unit 3 brought back end-September — two months earlier, and unit 1 one-and-a-half months earlier,” he says. “In October the country got a reprieve of nine continuous days without loadshedding. Furthermore, the synchronisation of Kusile unit 5 being around the corner, we believe that the additional 800MW will further alleviate the pressure on the power system and impact on the economy.” Crucially, he adds, maintenance has been increased during this period of reprieve. He expects that the EAF will drop further, but as units The issue of return to service, it powers is a will rise to 70% — necessary one and the fleet will be a d m i n i s t rat i ve l y. generally more reliable. But insofar as Still, there u n d e rs t a n d i n g remain challenges the nature of the problem and — and Ramokgopa urges patience. what needs to “It must be be done to understood that the resolve it — generation plants there was no are still unreliable problem there and unpredictable Kgosientsho Ramokgopa and it is unrealistic to expect to solve a problem many years in the making in a short time,” he says. “We are confident that with the impetus of the equity support from the National Treasury, the drive to put more megawatts on the grid, the delayed shutdown of the older coal stations and [the] generation [division’s] turnaround plan, the increase in maintenance in summer will reduce the frequency and level of load-shedding in the year to come and be all but eliminated once we achieve an EAF of 70%.” A bite out of the economy Still, as much as consumers have become inured to rolling power outages, and many industries have proved increasingly resilient, the impact of prolonged load-shedding on the economy has been devastating. One of the most detailed studies into the economic impact was undertaken by Stellenbosch consultancy Nova Economics for Eskom in late 2020. Its 104-page econometric analysis estimated that load-shedding cost the

economy R34.5bn between 2007 and 2020. In other words, had all the loadshedding experienced over those 12 years taken place in a single quarter in 2019, it would have resulted in a 5% contraction of real quarter-on-quarter GDP growth. To put this into perspective, it means that the impact of load-shedding has been roughly equivalent to that of the 2008/2009 global financial crisis. And this, say the researchers, is a conservative estimate, as it excludes the longerterm dampening effect on business and investor confidence. Moreover, the pace of load-shedding has increased in intensity every year since 2020, when the study was done. Investec investment strategist Ayan Ghosh estimated earlier this year that load-shedding cost the economy R300bn in 2022, subtracting 5% from GDP in that year alone. Ghosh noted, for example, that Shoprite was spending R100m on diesel every month during stage 6 load-shedding. His analysis suggested at the time that retail profits could decline about 10% if patterns of load-shedding persisted. Of course, things only got worse, with 2023 having been South Africa’s record year for load-shedding by far both in terms of the number of days and the GWh of energy shed. Eskom’s response? It could have been worse. In a September presentation, the utility patted itself on the back, saying: “Despite not having the Kusile units and [our] winter prediction of stage 8, we kept the load-shedding stages at a maximum of stage 6.” For the summer months (September 1 — end-March 2024), Eskom aims not to exceed stage 4 and to hold the number of load-shedding days down to 116 out of 213. So, the lights will be off just over half the time. Earlier this year, the Reserve Bank estimated that load-shedding would likely cut two percentage points off GDP growth this year. At the time, the Bank was forecasting real GDP growth of just 0.3% for 2023. So, without persistent outages, the Bank believed the economy was capable of 2.3% growth. It recently revised its 2023 growth forecast up to 0.8%, mainly because the impact of load-shedding has been less severe than anticipated. This is not because there has been less load-shedding, but rather because the economy has shown remarkable resilience in coping with the impact even as it has intensified. In large part, this is due to an avalanche of private sector investment as the

December 21 - December 27, 2023

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cover story / newsmaker state has relaxed regulations allowing companies to generate their own power.

AFP

Too harsh? Perhaps South Africa has been a bit unfair on Ramokgopa. As Emily Tyler, climate lead at Meridian Economics, tells the FM, there was no way he could have stopped load-shedding altogether — or even made a significant dent. “He simply did not have the jurisdiction,” she says. In part, the problem was that he found himself stuck between the ministers in charge of energy policy (Gwede Mantashe) and Eskom (Pravin Gordhan), two hard-headed politicians with vastly different ideas on the country’s energy policy direction. There was already confusion between Mantashe’s stance and Gordhan’s — adding another minister to the mix simply deepened that confusion, Tyler says. The politicking, she adds, has been “unhelpful”.

But Ramokgopa says he has faced little resistance when it comes to visiting power stations and engaging the Eskom board and management. “I did that with the full support and understanding of [Gordhan’s department of public enterprises] DPE. The issue of powers is a necessary one administratively. But insofar as understanding the nature of the problem and what needs to be done to resolve it — there was no problem there,” he says. It’s an assertion at odds with reports in the Sunday Times of a strained relationship between Gordhan and Ramokgopa, and intervention by the ANC national working committee to give the electricity minister access to powers to interact directly with Eskom management. The decision culminated in Ramaphosa committing to add to Ramokgopa’s powers. As Ramokgopa tells it, his powers remain the prerogative of the president. 22

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“The president will decide upon his own assessment when given more reports whether I require more powers, but as far as I’m concerned we are going to continue working as we have been working with all concerned stakeholders, which includes my cabinet colleagues and DPE and [the department of mineral resources & energy] to ensure that we pull the country out of loadshedding. “The EAP is multidimensional, it requires the co-operation of multiple stakeholders, so it’s going to take a collaborative effort, rather than a one-man show to get us out of the challenge that we are facing.” Insiders say the biggest problem is that Ramokgopa doesn’t have the power to procure energy, for which he has to rely on his cabinet colleagues. Mashele believes that not only are his powers too circumscribed, the regulatory regime around energy procurement is also limiting. She cites an example of how the minister’s procurement of energy from Mozambique, announced to much fanfare in October, fell flat. Another glaring failure was the announcement of generators donated from China, initially lauded as a solution to powering hospitals and schools. Ramaphosa instead received small generators with extremely modest output. “That donation was made without proper consultation with the Chinese and it ended up being something of a technology dump ... We are literally sitting with generators that can power my home,” Mashele says. Getting financial close on renewable projects is also taking longer and longer — though that is out of Ramokgopa’s scope and ability to fix. Meanwhile, the National Union of Mineworkers — the largest union at Eskom — seems to be cautiously optimistic about the minister. Its energy sector co-ordinator Khangela Baloyi tells the FM things look pretty bleak at Eskom, but the minister has been trying his best under difficult circumstances. While the union was sceptical about Ramokgopa’s appointment, it now believes he provides a necessary conduit between the power utility and the cabinet, he says. “He is seeing what is happening on the ground and he takes that back to the cabinet. No other minister is doing that and that has been a game changer,” Baloyi says. Mashele concurs: “He is that conduit

. December 21 - December 27, 2023

required, he is certainly more than what Mantashe initially described: a project manager.” Still, she says it will take more intense and rigorous work, done more speedily, to really make a dent on load-shedding or end it. Bright lights? There are green shoots, however — and not just increased maintenance and a steadily improving fleet. For a start, there’s that influx of private sector investment. Since 2018, the National Energy Regulator of South Africa (Nersa) has registered 1,185 new electricity generation facilities with a combined capacity of about 5,800MW. Of these, about 15% were registered in the first half of this year alone, with a total capacity of just under 3,000MW. At the same time, there has been an exponential rise in smaller rooftop solar installations (only projects over 1MW need to be registered with Nersa). The government put the installed capacity of solar panels (excluding its IPP programmes) at 4,841MW at the end of August 2023, more than double the figure recorded a year earlier. This trend has been evident in the fact that after falling for seven years, the country’s fixed investment ratio climbed back to 15% of GDP this year from a low of 13% in mid-2021, with renewables investment leading the pack. Thanks mainly to the investment the private sector is pouring into new generating capacity, as well as the joint reform efforts of business and the government, Business Leadership South Africa CEO Busi Mavuso believes that 2023 will be remembered as the year South Africa “broke the back” of the electricity crisis. BNP Paribas agrees. It expects South Africa to experience less severe and more infrequent load-shedding from mid-2024 as existing supply comes back online and demand for Eskom supply falls in favour of wind and solar. “A lack of meaningful new baseload capacity means that it will be difficult for the country to rid itself of loadshedding completely,” says BNP Paribas chief economist Jeff Schultz. “However, we think that stage 1-3 load-shedding from the second half of 2024 will have a minimal economic impact as the private sector quickly adjusts to its new reality.” Perhaps if Ramokgopa is able to get that right, he’ll be able to say he got his one job done. x

cover story / civil society It seems unhinged, but Fritz says this is perhaps a reaction to the view of the HSF as a white, liberal organisation. “How dare we suggest we were more concerned for Africans than he was. This idea that his ministry should be subject to the oversight of the courts seems anathema.” Immigrants make an easy target given South Africa’s crushing jobless rate, now a world-beating 31.9%, and its deteriorating state services.

NICOLE FRITZ: TRUTH TO POWER Nicole Fritz and the Helen Suzman Foundation have been at the forefront of litigating on behalf of 187,000 Zimbabwean exemption permit holders. Her battle is the culmination of a political awareness that started in her teens Giulietta Talevi

f you’re going to make a decision that adversely affects particular rights holders, you give them the opportunity to make representation [before] making that decision,” says Nicole Fritz, outgoing head of the Helen Suzman Foundation (HSF). It’s a basic precept of our law, yet home affairs minister Aaron Motsoaledi didn’t bother with this nicety in 2021 when, with the stroke of a pen, he blithely scrapped the Zimbabwean exemption permit (ZEP), altering the fate of 187,000 people. “We had no notice period, no consultation whatsoever, and actually no data to explain why the minister had suddenly taken this decision,” says Fritz. It set the scene for a high-stakes court battle this year between Motsoaledi’s department and the foundation. In the end, the HSF won, securing a stay of execution for the 187,000 permit holders until the end of 2024. But it was a fight that went far beyond administrative law; it exposed the underbelly of xenophobia against Zimbabweans who fled a failed economy — a failure partly enabled by South African government inaction in the first place. Fritz first began working on Zimbabwe-related issues in 2008, after the national election Robert Mugabe’s ZanuPF stole from the late Morgan Tsvangirai’s Movement for Democratic Change. In the lead-up to a runoff vote, all hell broke loose. “There was a systematic onslaught on supposed opposition supporters, and that huge upheaval in Zimbabwe was to some

“I

extent facilitated by South African silence,” she tells the FM. Thousands of Zimbabweans fled to South Africa which, in 2009, introduced an exemption to legalise the presence of 200,000 people. This permit was extended in 2014 and again in 2017. Fritz says ZEP holders had “scrupulously observed [the law] to get those permits”, abandoning any rights to refugee status. Then, out of the blue in November 2021, Motsoaledi said ZEPs would be terminated and holders would have a year’s grace to arrange new visas. The HSF went to court, arguing it wasn’t realistic to expect people to get these new visas within a year — partly because of a colossal backlog in Motsoaledi’s department. For Fritz, the state’s heavy-handed approach reveals not just a creeping xenophobia, but a disturbing shift to authoritarianism. “This is perhaps a problem of dismal governance failure, but also incumbency. The idea that your occupation of these roles is somehow a birthright. I think we have seen a failure to understand what the democratic process means.” Motsoaledi responded to the HSF with chest-thumping outrage. He accused it of trying to “sabotage” the government, saying this was “a perfect example of the destructive role that some NGOs are capable of”. “South Africa,” Motsoaledi said, “is now under the dictatorship of NGOs, with some having faceless and dubious funders. Their ultimate aim is to assist in the dislodgement of the government of the day.”

Motsoaledi’s fury helped stoke nationalist movements such as Operation Dudula and Put South Africans First, which argued the HSF was fighting for foreign nationals at the cost of South Africans. Fritz says this is a betrayal of the ANC’s stated ideal of pan-Africanism. “It speaks to a desperation in the ANC, a recognition that governance has been so dismal that you look for whatever scapegoat is available, which is playing to quite frightening forces in society,” she says. Witness the egregious response to July’s horrific Marshalltown fire, in which 77 immigrants died in a derelict councilowned building. Joburg city speaker Colleen Makhubele immediately put the blame on NGOs, which had taken the city to court to stop it evicting people from hijacked buildings. It’s especially cynical, given that civil society groups such as Equal Education, the Treatment Action Campaign, Gift of the Givers and the Organisation Undoing Tax Abuse have done more to advance constitutional principles than the politicians paid to defend these rights. Fritz, who has two small children and faced death threats over the ZEP case, describes the attacks as “unnerving”. She laughs off comments that members of the HSF — formed in 1993 in honour of liberal activist Helen Suzman — are “Nazi Zionists”, or that she is a German national agitating to undermine the state (she was born in Joburg). Having begun her career as a legal academic, Fritz is now leaving the HSF to head the policy division in Roger Jardine’s new political party Change Starts Now. Her political awakening, she says, began in her teens, when former president Nelson Mandela was released from prison in 1990. It made her realise that participation matters. “I really would like that for my children — to grow up excited about the prospects of this country. That it matters because of their participation and voice,” she says. x

December 21 - December 27, 2023

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cover story / business The Spar chair is no new hand at serving on the boards of companies steeped in controversy. Still, given allegations at the retailer about poor corporate governance, fraudulent loans and racism — and a long-running legal battle — 2023 provided its most brutal ride yet Ann Crotty

ell, 2023 was certainly an action-packed one for Mike Bosman. So action-packed that it’ll probably be a year or two before the dust settles and we’re able to see how it all turned out. Extensively revamping the Spar board and taking the bold decision to pull out of Poland were just two aspects of a period that Bosman will likely be glad to see the back of. Just weeks before the end of the 2022 calendar year Bosman was appointed nonexecutive chair of the Spar board. At that stage it might not have seemed too daunting a position for someone who had done time on the boards of EOH, MTN, AVI and Spur Corp — a sufficiently diverse group of companies to ensure there was little that would take Bosman by surprise. In particular EOH would have been a good training ground. Bosman, a professional helicopter and jet pilot, was appointed to the EOH board in early 2019 and was on it for much of the time the troubled IT company was being hauled back from the brink by a management team led by Stephen van Coller. Van Coller, who has announced he will be leaving that group in March 2024, certainly mad e progress in turning the company around, but, worryingly, it seems not yet to have fully recovered. Unsurprisingly, given all the Spar action, in October Bosman announced he would not be available for re-election at EOH’s November AGM. While nowhere near as stressful as the parent board, MTN SA must have its stresses, given the constant pressure to be at the cutting edge of a rapidly changing industry And being on the board of Spur can’t be too easy a ride given the varied challenges it’s had to deal with since Bosman joined in March 2019. AVI was probably the least worrisome of his board positions, though you never know — perhaps this consumer goods group only looks calm from the outside. But you get the picture? Bosman would not expect a board appointment to come without challenges. And these he got by the lorry load from Spar in 2023. In addition to the allegations of poor corporate governance, fraudulent loans and racism, there was the five-year legal battle with Spar’s single most important independent retailer. Presumably, the 63-year-old former marketing executive had read at least some of the 200,000 pages of the troubling details behind the drawn-out legal

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. December 21 - December 27, 2023

MIKE BOSMAN: A YEAR TO FORGET battle with the Giannacopoulos family before agreeing to head the board. Still, he’s likely to have been surprised by the depth and breadth of the group’s challenges, stretching from Dublin to Poznan and on to Pietermaritzburg. In late January 2023, just six weeks into Bosman’s tenure, the board announced that former chair Graham O’Connor was quitting. O’Connor, who in 2021 had seamlessly moved into the chair’s position after spending eight years as group CEO, had relinquished it in early December after extensive media coverage described widespread governance concerns at the group. However, he clung to a board position. By midJanuary it seems he was persuaded to announce his departure, effective from the mid-February AGM. Group CEO Brett Botten, who was named in relation to the governance issues as well as the legal battle

Freddy Mavunda

with the Giannacopoulos family, also quit the company ahead of the February AGM. Botten, who had been CEO for two years, had been with Spar since 1994 and had headed the group’s biggest division, Spar South Rand, since 2010. Bosman promptly stepped into the breach, reassuring shareholders that this contravention of the King 4 recommendation that the roles of chair and CEO be split was a necessary temporary measure. The board informed the market it was confident of appointing a replacement within three months: “In the interim, until the new CEO takes up his/her role, the board is of the view that stability, in the interests of all stakeholders, will best be achieved by the nonexecutive chair, Mike Bosman, taking on an executive role as executive chair of the group with effect from February 1 2023.” Mind you, this was more or less the same board that had no qualms about recommending O’Connor’s appointment as group chair at the 2021 AGM. But changes were in the offing. Bosman promptly appointed two new independent nonexecutive directors to the board — Shirley Zinn, who was also on the Spur board, and Pedro da Silva, who had extensive retail experience both locally and internationally. In acknowledgment of his more onerous role Bosman announced he was quitting the AVI board. He also moved quickly to address some of the urgent challenges facing Spar, such as those relating to fictitious and fraudulent loans allegedly made to an unspecified number of the group’s independent retailers, and allegations of discrimination against some others. It turned out that the appointment of Zinn and Da Silva were not the only board changes. In between fighting fires on various local and international fronts, Bosman was constantly adding new blood to the board. Particularly after the special shareholders meeting in September, when shareholders relented on their AGM stance and voted to approve directors’ fees. And so, within one year of his appointment, the profile of the board was changed dramatically. By year-end the board bore little relationship to the one overseen by O’Connor. In addition to Botten and O’Connor, Marang Mashologu, Phumla Mnganga, Andrew Waller and Jane Canny did not make it. CFO Mark Godfrey as well as nonexecutive directors Lwazi Koyana and Sundeep Naran were the only ancien regime directors to survive under the new leadership. Godfrey, Koyana, Naran, Zinn and Da Silva were joined by economist and former special economic adviser to President Cyril Ramaphosa Trudi Makhaya. Also appointed were Marie Jamieson — who has a formidable background in marketing, including stints at companies well known to Bosman — and Liesbeth Botha, who has extremely impressive IT credentials. But the most significant appointments, because they are executive, were those of Megan Pydigadu, who left EOH to become Spar’s COO, and Angelo Swartz, whose 16-year stint with Spar included, most recently, the position of MD of the KwaZulu-Natal division. Meanwhile, back on the firefighting front, Bosman was busy reassuring the foreign, mainly Irish, bankers that Spar South Africa was still good for the tens of

millions of euros it owed them. And why wouldn’t the Irish believe that? Since 2014, when an O’Connor-run Spar paid top dollar to rescue the Irish business, the banks have enjoyed superior returns. The Irish business has been run for the benefit of the banks, with Spar South Africa standing as guarantor. It’s essentially a currency and interest rate gamble, which so far has paid off. Perhaps the most dramatic of Bosman’s decisions this year was to jettison the Polish business. It was a brave move. Dropping the costly venture circumscribed the hefty costs involved. Hanging on to it would have required sizeable additional investment and, in the most optimistic scenario, at least two more years of losses. Given its very stretched balance sheet, it was probably not the sort of gamble Spar could afford. Polish management and their suppliers were reportedly not happy about the decision, so it’s likely the figures out of there will be particularly grim until it’s offloaded. But there are only so many crises any balance sheet or management team can endure. And already by midyear it was evident that the rollout of the SAP enterprise resource planning software was set to become the most urgent and potentially crippling of what was on Bosman’s plate. Back in January Bosman might have been expecting a challenging rollout, but what he got looked closer to an existential threat. The botched rollout was the primary factor in the 47% plunge in operating profit for the year to end-September. The rollout has been put on ice until the problems are resolved, which could be some time. Meanwhile, the affected retailers struggle to place orders, with management rather euphemistically explaining to them that “with SAP having altered our landscape somewhat” new ordering procedures need to be followed. Last, but certainly not least, there is still the controversy about the role of the Spar Guild, which is a critical piece of the group’s unique architecture. Its intended role is to “promote, implement and regulate” the trading between Spar’s distribution centres and the independent retailers. However, the traditional winwin relationship needed for the growth of Spar as well as its retailers has, in recent years, been replaced by a more fractious one, better described as a zero-sum game. On this score, Swartz, Bosman’s newly appointed CEO, described as a speedy and effective decisionmaker, has made some impressive inroads and won support from the beleaguered retailers. As, to a lesser extent, has Pydigadu. But there’s loads more to do. No doubt Bosman, as well as every single person involved with Spar, is hoping for a largely uneventful 2024, focused on recuperation. After so much churning, management teams and relationships need time for consolidation. It’s unlikely that either Bosman or Spar could survive anything like a repeat of 2023. Even shareholders, who’ve been remarkably stoic in the face of all the action — the share price is little changed from where it was a year ago — might not cope with another year of nail-biting tension. x December 21 - December 27, 2023

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cover story / politics

[Mbalula] is part of a rising generation of ANC leaders who are intellectually barren, they are all about spectacle and ANC gigs instead of positively contributing to society and the o rg a n i s at i o n

FIKILE MBALULA:

Ralph Mathekga

FIREBRAND

ON THE

LOOSE The ANC secretary-general has turned backtracking into a fine art. But while his bombastic bluster casts a poor light on the party’s image, insiders do credit him with stabilising the ANC internally Natasha Marrian

he latest tussle between Fikile Mbalula and ANC veteran Mavuso Msimang is not the first time the firebrand secretary-general has taken on his seniors — and then backtracked. His infamous 2009 open letter to former president Thabo Mbeki is legendary — not least because it epitomises Mbalula’s character and penchant for bombastic, spiteful bluster. Back in 2008, Mbalula was among those who agitated for Mbeki’s recall at a tense national executive committee (NEC) meeting. A year on, with the ascent of Jacob Zuma, he described the former statesman as “manipulative” and “conniving”, and as having allowed the ANC to “stumble on the edge of the abyss”.

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. December 21 - December 27, 2023

Almost a decade and a half later, on December 7, Mbalula expressed regret over the Mbeki recall, describing the move as “reckless” and “wrong”. From describing Mbeki as “intoxicated with power” in 2009 to admitting that the ANC recalled him for no good reason, Mbalula’s fondness for going with the political flow — and benefiting from it — has become legendary. He has, for example, backtracked after an attack on public enterprises minister Pravin Gordhan. Then there’s his latest gaffe, in response to the nowreversed resignation of Msimang. After receiving Msimang’s letter of resignation, he accused the veteran of having been “bribed” by businessman-turned-politician Roger Jardine to join his new political movement. Msimang denied this and described Mbalula as an “embarrassment”. Again, Mbalula did an about-turn, issuing a public apology for his statement. Given that he occupies a crucial post in the party, Mbalula’s linguistic blundering is beginning to cause some irritation. As ANC secretary-general, he is effectively the party’s voice and second only to its president. The CEO, in other words, of the organisation. Historically, that position has been occupied by

intellectual heavyweights — think Walter Sisulu, Oliver Tambo, Duma Nokwe and, more recently, Cyril Ramaphosa, Kgalema Motlanthe and Gwede Mantashe. What’s especially problematic now, however, is that, with an aloof president like Ramaphosa, the organisation’s character takes on the persona of the secretary-general. And on that count, Mbalula is doing it no favours. Mbalula’s surprise election in December last year is anomalous and, analysts say, a sign of the broader degeneration of Africa’s oldest liberation movement. That decline began with the ascent of former Free State premier Ace Magashule to the post. On his watch, the ANC’s organisational decline accelerated. The question inside and outside the party is whether Mbalula can turn things around in time for the crucial 2024 election and cement a renewal agenda. There are doubts, not over his intent, but his ability. “Some of the things he says cause irritation. He still thinks he is the secretary of the ANC Youth League. What he needs to do is rise to the occasion as secretary-general of the ANC and not get hypnotised by the microphones and cameras in front of him,” says an NEC member, speaking to the FM on condition of anonymity. “The SG should speak only on strategic issues, but he is all over the place. The broader impact is that it reduces the gravitas of that office.” Mapungubwe Institute for Strategic Reflections director Susan Booysen says Mbalula is heavy on bluster and sideswipes but light on depth and intellectual engagement. “He has the ability to hit out at opponents and defend the ANC in ways that draw headlines, but he doesn’t have the ability to materially change anything and improve perceptions,” she tells the FM. Another NEC member says Mbalula has a penchant for jumping into the swamp with the likes of the EFF’s Julius Malema, reacting to provocation from his former youth league protégé. “He throws himself in the mud, which is completely unnecessary when dealing with an uncouth figure like Julius,” the leader says. Numerous attempts to obtain comment from Mbalula for this piece were unsuccessful. While Luthuli House insiders acknowledge that Mbalula has to be restrained from his public outbursts, they have

credited him with doing a lot to stabilise the ANC internally. For instance, he led the process to ensure the youth league, women’s league and veterans league held elective conferences in the first six months of his tenure — this after the three offshoots had been crippled by internal instability for years. He also beefed up operations at Luthuli House, says another insider, appointing a general manager, Patrick Flusk. And he surrounded himself with strong thinkers such as former Gauteng premier David Makhura, who heads political education, and former KwaZuluNatal (KZN) secretary Mdumiseni Ntuli, who is now the head of organising. Ntuli was among those who ran for the post of secretary-general but lost to Mbalula. “The NEC is also better organised under him,” says another leader who sits on the structure. “The way issues and documents are processed is much stronger [than under Magashule] and it helps the leadership to focus on coming up with solutions ... His team is doing a much better job. In fact, he has done more in the past year than Magashule did before his suspension.” Mbalula is credited with the successful running of the ANC’s manifesto review process and the Letsema listening campaign, which involved party leaders traversing the country to listen to community complaints about governance. This, say insiders, provided key contact with the electorate ahead of what is expected to be a bruising election campaign in 2024. Still, given his missteps, the NEC has been pushing for Mbalula to leave more of the communicating to the party spokesperson Mahlengi Bhengu-Motsiri. “That is something we are trying to manage, for us the image and brand of the organisation is key and we must ensure that whoever speaks on behalf of the brand must protect and not damage it,” a senior leader says. Independent political analyst Ralph Mathekga agrees, saying Mbalula only seems to care about trending on social media — there is no deep thought or strategy to his outbursts. “But you must remember that he is part of a rising generation of ANC leaders who are intellectually barren, they are all about spectacle and ANC gigs instead of positively contributing to society and the organisation,” he says. Mathekga says this generation of leaders is in the ascent as older leaders make

way. Unfortunately, he adds, the ANC over the past two decades did not emphasise excellence when drawing in future leaders. The likes of Mbalula and former finance minister Malusi Gigaba are the result of that. That said, there are those in the wings who could have done a better job. He cites former KZN chair Sihle Zikalala as one such leader, or Makhura. The ANC is in dire need of stronger leaders in its headquarters given the wider global challenges — from the party’s response to the wars in Ukraine and Gaza to the careful tiptoeing required in navigating an increasingly multipolar world. “What you want now is a Joe Slovo,” Mathekga says, referring to the former SACP general secretary. “[Someone] who has the intellectual nous to navigate these multiple crises, not someone only after hits on social media and someone who spends most of their time criticising ANC members.” In the final analysis, Mbalula appears to be more of an entertainer than a strategist, he adds. In 2012, the ANC’s former policy tsar Joel Netshitenzhe delivered the OR Tambo lecture in which he spelt out the characteristics required of ANC leaders, using Tambo as a reference point. “Oliver Tambo commanded reverence and awe, not because he demanded respect or instilled fear. He simply towered above the rest: as an organiser, an accomplished intellect, a master strategist and tactician, a source of inspiration, a force of example and a paragon of transformative virtue and revolutionary ethics,” Nsthitenzhe said. “A defective leadership not only holds back the attainment of national objectives. It also presents a difficult conundrum for the movement in that, to rationalise its bad leadership choices, the ANC has to lower itself to embrace those defects of the leaders it has chosen, as its own defects. “Steadily, these defects of individual leaders become, by default, the collective property of the organisation, its own blind spots and its subliminal attributes in the public imagination.” The ANC, says Mathekga, has clearly fallen far from the ideal leadership epitomised by the likes of Tambo — and it is set to face the consequences. The likes of Mbalula and his generation are shaping the character of the new ANC. Given his ambition to succeed Ramaphosa, this is unlikely to change. x

December 21 - December 27, 2023

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cover story / international Pool / AFP via Getty Images / Gallo Images / Jacquelyn Martin

BENJAMIN NETANYAHU: ON THE ROPES Israeli Prime Minister Benjamin Netanyahu

enjamin Netanyahu is a man of firsts: the youngest-ever Israeli prime minister; the longestserving; leader of the most right-wing coalition government Israel has seen. And now, the man in charge during what many consider the most devastating attack on the country in its 75-year history — and overseeing an Israeli ground and air assault of unprecedented ferocity on the Palestinian territory of Gaza. On October 7, Hamas, the Palestinian group that controls Gaza, staged a heinous and multipronged attack on Israel — one that left about 1,200 dead (the vast majority civilians), upwards of 3,300 injured, more than 200 kidnapped, with evidence of rape and mutilation. Israel’s response was swift and merciless. Within hours, Netanyahu vowed: “We will take mighty vengeance for this black day ... We will turn Gaza into a deserted island. To the citizens of Gaza, I say you must leave now. We will target each and every corner of the strip.” Only, there’s really been nowhere to go; Gaza is a sliver of land measuring just 40km by about 10km — not even a quarter the size of Joburg — with a population of 2.3-million shoehorned in. The vast majority has now been further squeezed into the central and southern parts, and Israel has throttled the delivery of water, electricity, fuel and aid into the territory. At the time of writing, it’s estimated

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The war in Gaza has occupied headlines since Hamas’s heinous attack on Israel on October 7. The Israeli Prime Minister in response vowed to turn the territory into a ‘deserted island’ Shirley de Villiers

that more than 18,000 civilians have been killed, 7,700 of them children, news service Al Jazeera reports. Apartment buildings have been flattened and hospitals bombed, and humanitarian aid is sketchy. There’s no doubt the war will be the defining moment of Netanyahu’s tenure — and his legacy. But if he’d hoped for a “rally around the flag” effect — the increase in popular support for leaders during times of crisis — he’s seen nothing of the sort. Polling has been “abysmal”, Dahlia Scheindlin, a political analyst and columnist at Haaretz tells the FM; trust in Netanyahu’s government is at a 20year low, and his party, Likud, has lost more than 40% of its support. A poll by Israel’s Channel 12 in early November found 76% of Israelis want Netanyahu to resign. For now, that’s neither here nor

. December 21 - December 27, 2023

there. As Scheindlin points out, the country isn’t in an election cycle. And it’s highly unlikely that there will be a change in political leadership at a time of crisis. But Netanyahu’s popularity was plummeting before the war. There are the three cases of fraud, bribery and breach of trust before the courts. There’s also his headline-making attempted “reform” of the judiciary earlier this year, which brought Israelis — including members of the defence establishment — out on the streets in protest. In July, the Knesset, Israel’s parliament, passed the first amendment: to remove from the Supreme Court the power to overrule government decisions it finds “extremely unreasonable”. In effect, the move would give the courts a secondary role to

was allowed for humanitarian purposes only. But earlier speculation is that he wants to prop up Hamas to entrench divisions between the movement and the Palestinian Authority, which governs the West Bank. Without a unified Palestinian front, Netanyahu can claim he has no partner to negotiate with, and so can sidestep talks around a possible twostate solution. In addition, “the logic of Israel was that Hamas should be strong enough to rule Gaza, but weak enough to be deterred by Israel”, Yossi Kuperwasser, a former head of research for Israel’s military intelligence, told the NYT. It was about containment over confrontation, the publication reports — the hope that the problem would simply “fade away”, in the words of Israel’s former national security adviser Eyal Hulata. A huge misstep.

Essentially, fanatic theocrats have completely overtaken the professional assessment of what the country actually needs [from] a security perspective Dahlia Scheindlin

alem. The government’s actions, he said, likely expedited settlement expansion. It’s part and parcel of Netanyahu’s deal to win power in the 2022 elections. A fragmented Israeli polity means government by coalition. In this case Likud won just 32 of the 120 seats in the Knesset. A weak Netanyahu thus joined forces with ultra-orthodox and religious Zionist parties, which largely have him over a barrel. They’re in favour not just of the expansion of settlements, but also the outright annexation of Palestinian land. As a result, tensions in the West Bank have flared, and IDF soldiers were partly redeployed from the Gaza border to manage the fallout. “Essentially, fanatic theocrats have completely overtaken the professional assessment of what the country actually needs [from] a security perspective. And that affects everything,” says Scheindlin. Finally, as The New York Times (NYT) recently reported, there’s that small matter of the government for years allowing Qatar to channel millions of dollars a month to Hamas — $30m a month by 2021. It’s thought that funding to Hamas, which governs Gaza, freed up the movement’s budget to divert resources to its military operations. Netanyahu swears blind the money

APF / Getty Images / Gallo Images / Said Khatib

the government. Additional changes would give the government a decisive say in picking judges, and to remove the current requirement that lawmakers follow the advice of legal advisers, under the attorney-general, according to the BBC. In all, it would undermine the democratic order and the independence of the judiciary. Most defining, of course, has been the October 7 attack. For a country where security is like “a holy grail”, says Scheindlin, this could spell the end of Netanyahu politically. The self-styled “Mr Security” has been panned not just for the government’s failure to anticipate the attack and respond adequately to the needs of displaced citizens, but also for the role his administration played in propping up Hamas in the first place. First, despite reportedly having the blueprint of a Hamas attack in its hands months before it happened, the Israeli intelligence establishment reportedly waved off the threat, figuring the movement had neither the capacity nor the intent to carry it out. Then there was the diversion of Israel Defence Forces troops (IDF) to the Palestinian West Bank. Under the Likud party, Israeli settlements there — considered illegal by the UN — have ballooned, from 4,000, when Likud took power in 1977, to 500,000 today (excluding East Jerusalem), Robert Pape writes in Foreign Affairs. There’s no sign of that slowing down. Tor Wennesland, UN special co-ordinator for the Middle East peace process, told the Security Council in September of reports of advanced plans for 6,300 housing units in the West Bank, and about 3,580 housing units in East Jerus-

Reduced to rubble: A woman walks past a bombed-out building in Rafah, southern Gaza, on October 31

The issue has had broader global implications too — and not just in terms of highlighting divisions on the issue, despite what seem clear violations of international law. US-brokered rapprochement between Israel and the Arab nations may founder as a result — in particular, ongoing talks between Saudi Arabia and Israel have been put on hold, and Saudi Arabia has engaged with Israel’s arch-enemy and Hamas backer Iran, Al Jazeera reports. The attack was, in part, a message from Hamas that the Palestine issue cannot be relegated to the background in negotiations about a future Middle East, according to a Reuters report — as it largely has been, for politically expedient reasons. Where does that leave things on the more localised level? Disaffection is a powerful weapon. The more Israel continues its active assault on Gaza, the more Palestinians may be turning to Hamas. That leaves the concern that this could become Netanyahu’s forever war — or, at the least, an interminable occupation. The right-wing government’s strategy on Gaza has failed. Netanyahu’s strategy has failed. This could spell the end for the ultimate political survivor. If an election were held tomorrow, he’d likely be removed from office. But, says Scheindlin, Netanyahu “has got himself out of some very tight spots. The kind of things no-one could get out of politically, he’s got himself out. That doesn’t mean he’ll be able to this time, because the situation is unprecedented.” x

December 21 - December 27, 2023

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cover story / sport

SIYA KOLISI: SA’s WARRIOR KING The one big takeaway outh African rugby changed When the Boks convened for the from the 2023 Rugby forever when Siya Kolisi led Rugby Championship, Kolisi joined the Springboks against Engthem and was heavily involved in the World Cup was to not ever land at Ellis Park on June 9 planning for the World Cup, all the count the Springboks 2018. At that moment, Kolisi became while continuing with his rehabilitation. the first black African Test captain and Many doubted the captain would be out. Skipper Siya the Boks — as many observed at the time fit for France, but Kolisi was backed as Kolisi has proved — became a team for all South Africans. captain when the World Cup team was Kolisi’s story didn’t end there. Coach named in August. himself central to Rassie Erasmus emphasised that Kolisi was A few weeks later Kolisi made a successnot a political appointment; he deserved his ful comeback, delivering an industrious perthat spirit starting place, and was the right leader for this formance against Wales in a friendly. It Jon Cardinelli group of warriors. included a classic pass to set up a try for MalErasmus’s words echoed over the next six colm Marx. The sceptics were silenced. What years as Kolisi and his teammates won back-tofollowed was even better: a record-breaking 35back World Cup titles. In the wake of the most 7 win against the All Blacks at Twickenham. Kolisi recent triumph, in France, former Bok captain John was back, but the pressure was always there. The Smit — who is widely recognised as one of the captain and his teammates embraced the challenge greatest leaders the sport has ever seen — declared of defending the World Cup. that the class of 2023 is the best of all time, and that As Smit noted at the end, these Springboks had Kolisi is a special player and person. earned the title of “greatest team ever”, not just by Kolisi’s rise from the township of Zwide to the pinwinning a record four World Cup titles and two backnacle of the sport is well documented. After winning to-back trophies, but by winning the hard way. the 2019 World Cup in Japan, he set out to help those Over the course of the playoffs, Kolisi’s Boks beat in need through his foundation. He rubbed shoulders France, England and finally New Zealand, each by a with the likes of Roger Federer and Jürgen Klopp, and single point. While the mettle of the collective must be learnt how to strike a balance between philanthropy acknowledged, so too must the leadership. There were and sporting obligations. many nervous moments, but the Boks always believed Some people in the South African rugby industry that they’d pull through. feared that he’d succumb to the celebrity lifestyle In his autobiography, Rise, Kolisi suggests that the and that his game would suffer as a result. But when 2023 World Cup will be his Test swansong. But after the Covid restrictions were lifted in 2021, he led the the Boks’ victory in France, and after witnessing the Boks to a monumental series victory against the celebrations over the course of the trophy tour across British & Irish Lions, and improved to the point where South Africa, he may have cause to delay his retirehe was one of South Africa’s best players over the ment from the international stage. 2021 and 2022 seasons. The 32-year-old is playing club rugby for Racing The nation held its breath when Kolisi went down 92 in France. This may jeopardise his claim to the with a knee injury while playing for the Sharks in a Bok captaincy (a home-based player might be preferUnited Rugby Championship match against Munster red), but he might continue to form part of the leaderin April. ship group. Scans of the injury confirmed the worst: an anterior The Boks host Ireland in a two-Test series in July cruciate ligament tear. It would require surgery and 2024, and will chase an elusive Rugby Championship possibly a six- to nine-month layoff. It meant Kolisi title thereafter. There’s already talk of the team preparwould miss the World Cup in France. ing for the 2027 World Cup, where they could become But he refused to give up on the possibility of leadthe first team in history to claim three successive titles. ing the team in defence of their triumph in Japan. A It may seem an unlikely outcome, but then Kolisi specialist who had performed a “miracle” surgery to and so many individuals in this special group have repair a similar injury to Bok teammate Pieter-Steph overcome greater odds. It would be unwise to bet du Toit in 2015 did the same for Kolisi. against them. x

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. December 21 - December 27, 2023

features / accounting

HELD TO ACCOUNT With accounting and auditing regulatory bodies already under close scrutiny, the South African Institute of Professional Accountants has become the latest such organisation to fall under the integrity spotlight Ann Crotty

he South African Institute of Professional Accountants (Saipa) has become the third institution tasked with overseeing the integrity of the audit and accounting professions to hit a reputational pothole. Until now, the organisation has largely escaped the opprobrium that for years has dogged its better-known associates, the South African Institute of Chartered Accountants (Saica) and the law-backed Independent Regulatory Board for Auditors (Irba). But in early December Saipa chair Prem Govender informed “stakeholders” that the institute’s CEO, Shahied Daniels, and its COO, Gavin Isaacs, had been put on precautionary suspension. That shock was followed by news that Saipa had subsequently taken the same action against Nosheena Mansoor, its business innovation strategies executive, and Thomas Nyamvura, its digital and technology officer. They were suspended after they were found apparently attempting to disrupt the investigation into Daniels and Isaacs. When he took up the CEO position in early 2019, Daniels told journalists the profession’s image had been tarnished due to a few “rogue accountants”. The investigation will hopefully indicate just how few these are. It could be that the suspensions reflect how seriously the Saipa board takes its responsibilities rather than any lapse in governance standards. In the statement, Govender stressed that the precautionary suspension does not suggest or presume wrongdoing or guilt. By its own telling, Saipa’s objectives

include “serving the public interest by adopting, or otherwise incorporating, and supporting implementation of international standards and maintaining adequate enforcement mechanisms to ensure the professional behaviour of individual members”. Its 10,000 members are accountants who offer accountancy, tax and independent review services. And only its members can use the designation “professional accountant”, or PA (SA). The naming rights are tougher for chartered accountants. They have to pass a series of exams as well as notch up work experience and then, only once accepted by Saica, can they use the designation CA (SA). Saipa and Saica are two of the largest of the more than 10 organisations that represent about 56,000 professional accountants in South Africa, with Saica by far the largest. Unlike Irba, which relies on the Auditing Profession Act to regulate the 4,500 registered auditors in South Africa, the professional accounting bodies are all self-regulating. As almost everyone now knows, the biggest challenge with self-regulating professional organisations is working out how to protect the interests of the clients of their members. Certainly, the shareholders of Steinhoff, Tongaat Hulett and VBS Mutual Bank, and the taxpayers who inadvertently funded state capture, have not been overly impressed with Saica’s efforts to hold its members accountable. Even Irba has exhibited little ability or inclination to do so.

As Dieter Gloeck, a former professor of auditing at the University of Pretoria, tells the FM, self-regulating institutions face a huge potential conflict. “How can they ensure they protect the interests of the public and not just of their members?” he asks. A basic requirement would be to shed the opacity with which these organisations traditionally deal with complaints and to operate in a more transparent manner. This may be just what Saipa is doing. Its action was prompted by legal opinions and a report by governance experts which advised the board that there were “governance concerns and serious allegations” that required a forensic investigation. “The precautionary suspensions are meant to protect the integrity of a forensic investigation commissioned by the board,” said Govender. There might be straight-forward explanations behind the issues being investigated. Though it’s difficult to work out why Daniels and Isaacs would, without board or member approval, want to set up an “international Saipa global entity” based in Switzerland. After all you don’t get far into Saipa’s website before finding out that it is a full member of the International Federation of Accountants and therefore “enjoys international reach and strong connections with the global accountancy community”. This proposed Swiss-based entity appears to have been part of an unapproved strategic plan to globalise Saipa’s professional designations. Not only were there costs relating to this unapproved strategy, but there was also “a variety of irregular expenditure” relating to overseas travel without board approval. Saipa has given no indication of how much money was irregularly spent, nor how long it expects the investigation to take. Tia van der Sandt, who previously served as chair of Saipa’s risk and compliance committee, has been appointed acting CEO. x

December December21 21 -- December December 27, 27, 2023 2023

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features / cape independence comment

FLAWED CAPE FANTASY The idea of Cape independence is a chimera that evades the messy reality of South Africa. To co-opt a Palestinian slogan to the cause is simply the epitome of crass Chris Roper

The tweet could only have been penned by someone whose sense of entitlement is so huge that he’ll need to book an extra seat for it when he eventually flees the country

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s we enter the season known as festive, it’s traditional for news organisations to look back at the highlights of the past year, and forward to the delights that await us in the next one. And yes, the words “highlights” and “delights” can be replaced with the words “low points” and “horrors”. The Guardian is trumpeting that “a record-breaking 40-plus countries, representing more than 40% of the world’s population and an outsize chunk of global GDP, are due to hold national elections in 2024. The outcomes, taken separately and together, will help determine who controls and directs the 21st-century world.” And in a remarkable moment of flamboyant optimism, it asks the presumably rhetorical question: “Who says democracy is dying?” A better question would be: who says elections have anything to do with democracy? The story references the 2023 edition of Freedom House’s Freedom in the World report, which has been running for 50 years. The report finds global freedom has declined for the 17th consecutive year due to Russian President Vladimir Putin’s human rights atrocities in Ukraine, coups and “attempts to undermine representative government” that have destabilised Burkina Faso, Tunisia, Peru and Brazil, and previous ones that continue to “diminish basic liberties in Guinea and constrain those in Turkey, Myanmar and Thailand, among others”. The report also suggests the struggle for democracy may be approaching a turning point. “The gap between the number of countries that registered overall improvements in

. December 21 - December 27, 2023

political rights and civil liberties and those that registered overall declines for 2022 was the narrowest it has ever been through 17 years of global deterioration. Thirty-four countries made improvements, and the tally of countries with declines, at 35, was the smallest recorded since the negative pattern began.” There’s also the optimistic conclusion that “while authoritarians remain extremely dangerous, they are not unbeatable”. This seems a little too buoyant to me, but I guess we all have to live in hope. I don’t see a lot of authoritarians being beaten. Rather, it seems that evil is always and endlessly mutable, and just adapts to exploit changing circumstances. For Freedom House, a key driver of global economic decline is infringement on freedom of expression. “Over the last 17 years, the number of countries and territories that received a score of 0 out of 4 on the report’s media freedom indicator has ballooned from 14 to 33, as journalists face persistent attacks from autocrats and their supporters while receiving inadequate protection from intimidation and violence even in some democracies. “The past year brought more of the same, with media freedom coming under pressure in at least 157 countries and territories during 2022. Scores for a related indicator pertaining to freedom of personal expression have also declined over the years amid greater invasions of privacy, harassment and intimidation, and incentives to self-censor both online and offline.” As regular readers of this column will know, I view the media as perhaps the most important contributor to the health of open societies, be they democracies or some other form of government. And, of course, recognising that our definitions of open will always be contested, and constantly changing. So yes, 40 elections in 2024 could be a bellwether for the health of democracies, but equally it’s going to be fertile and febrile ground for an absolute avalanche of propaganda, misinformation and attempts to subvert truth for political and financial ends. Get ready for a year of lies and tendentious stupidity. Speaking of stupidity, those idiots at the Cape Independence faction are

getting their inanities in early. Here’s a tweet by one Robert King so breathtakingly tone-deaf, so shamelessly opportunistic and exploitative, so stupid, that it could only have been penned by someone whose sense of entitlement is so huge that he’ll need to book an extra seat for it when he eventually flees the country to seek political asylum in the UK. Accompanied by a map of South Africa, with the Western Cape differentiated from the dull brown of the rest of the country by the resolutely European red, white and blue of the Cape Independent Party’s flag, the tweet reads: “From the River to the Sea. The Western Cape Will be Free! #cape independence.” Yes; in the mind of this freedom fighter for Cape liberation, the terrible oppression suffered by the people of the Cape is analogous to that suffered by the people of Palestine. I cannot even begin to describe how insulting this is to the thousands of people dying in the present conflict in Gaza. Also, given the contested nature of that slogan with some asserting it is a call for genocide, does he really think it’s a cute catchphrase he can pluck from the air and turn into a T-shirt? And even more ridiculously, his tweet implies that the South African government is Israel. Really? You think the ANC is an occupying power that has stripped away your rights, imposed a form of apartheid and is bombing your civilian population? Also — what river, Robert? What river? King’s X bio claims he is the “Spokesperson for the Economy” for the Referendum Party, which is a “single-issue”, and apparently single brain cell, political party “established to force a referendum on Cape Independence in the Western Cape”. Tagline: “In the 2024 election, you will be choosing between two futures. An African failed state, or an African first world country.” King is also a co-founder of the Cape Youth Front, “a new movement standing up for the Cape and building a future filled [with] Good Hope for our youth”, and an executive committee member for the Cape Independence Advocacy Group, whose dream is “Becoming the Cape of Good Hope again ... Our best hope is creating our own first world nation on Africa’s southern tip — the Cape of Good Hope. Together, let’s build Africa’s newest country.” Dude’s a joiner, I’ll give him that. And apparently entirely unaware, with the use

of the Cape of Good Hope as a rallying cry and an appeal to impose a first-world culture on an African country, that his organisation is calling for the recreation of a pivotal moment in colonialism. Let’s be clear about this. Those who call for the chimera of Cape independence are calling for a return to the days of apartheid. I don’t mean they want a country where people are divided on racial lines, and where draconian laws limit the human rights of a large swath of the population. I’m not even suggesting that they are racist, or at least no more than that unhappy South African norm. What I am suggesting is that those who long to be free of the present reality that is South Africa are actually longing to be freed of South Africa’s past. Or rather, of the ramifications of that past. They want a return to the invented certainties of apartheid without its reality. In Naomi Klein’s book Doppelganger (which I wrote about in more detail a few weeks ago), she describes how conspiracy theories are founded on denial of the past. “Denial is so much easier than looking inward, or backward, or forward; so much easier than change. But denial needs narratives, cover stories, and that is what conspiracy culture is providing.” In much the same way, those who claim to want Cape independence (a ridiculous concept, and we shouldn’t even be using the term) are just constructing a narrative that allows them to escape the hard realities we have inherited from our apartheid past. The insistence on returning to a prelapsarian, “first-world” utopia, couched as a movement forward, is in fact a denial of our collective responsibilities to fix the mess we are in because of the unbelievable incompetence and venality of those we have chosen to govern. Klein quotes James Baldwin. “An invented past can never be used; it cracks and crumbles under the pressures of life like clay in a season of drought. [However,] to accept one’s past — one’s history — is not the same thing as drowning in it; it is learning how to use it.” Instead of longing for a place and time that sits outside this sometimes calamitous country, we’re going to have to knuckle down and try to fix it. You can’t run away. I mean, you can, but not by taking one of our provinces with you. The idea of Cape independence is not about being independent from the rest of South Africa; it’s a fantasy about evading

reality. Intrinsically, it’s an attempt to escape from the knowledge of our culpability, and from the awful realisation that all those firstworld luxuries the Cape independence people feel should be theirs by inalienable right can only be built upon a foundation of inequality. And co-opting the slogans of real struggles against colonialism for your own feeble attempts at recolonisation of the Cape is as unforgivable as it is crass. x

It seems that evil is always and endlessly mutable, and just adapts to exploit changing circumstances

December 21 - December 27, 2023

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africa international z i m b a bwe

LOST LAND, BROKEN PROMISES Nine years after their evacuation from the area around the Tugwi Mukosi megadam due to flooding, Zimbabwe’s internally displaced people say they’ve been cheated out of proper compensation Chris Muronzi

hen heavy rains poured down in Nyajena kraal, Masvingo province, in February 2014, Derick Muringa did not think much of it. After all, it was the rainy season in Zimbabwe. Little did he know that his life would be upended by the downpour. Within a few days, the rainfall had caused water levels at the nearby Tugwi Mukosi megadam to rise to distressing levels. By February 13 the downstream face of the dam had failed, and Muringa’s world was turned upside down. “I had to leave my home and flee to

International law and I D Ps Zimbabwe in October 2009 consented to the AU Convention for the Protection and Assistance of Internally Displaced Persons in Africa, commonly known as the Kampala Convention. The convention emphasises the protection of the rights and dignity of internally displaced persons (IDPs): states need to prevent and mitigate displacement, and must provide protection and assistance to those who have been internally displaced. In addition, they’re supposed to protect those at risk of displacement and ensure that the rights of IDPs are respected during displacement and resettlement. States are also obliged to enact or adapt domestic laws and policies to implement the provisions of the convention. Zimbabwe has yet to do so. x

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higher ground to save myself and my family,” he tells the FM. About 60,000 people living around Tugwi Mukosi were affected, about 2,500 households upstream of the dam were displaced and moved to relocation sites in Mwenezi district and 4,000 at-risk households downstream of the dam fled to higher ground. Fast-forward nine years, and Muringa is more than 100km away in Chingwizi, in Nuanetsi Ranch. He is one of 20,000 victims of the flood who were relocated to that village by the authorities. It’s a dry area — almost uninhabitable due to water scarcity, he says — with no pastures for livestock. Not a day passes when he doesn’t feel sad about the rains that caused him to be displaced. “Nyajena was a very a good place. We had good pastures and water,” he says. Trymore Wadyechitsve, who was also displaced, adds: “The water we drink from Chingwizi is from a tunnel that passes through our place and waters the ethanol and sugar cane plant at nearby Nuanetsi Ranch. It’s the only [source] we have and we have to drink the bitter, salty water … The water is not good.” There’s an irony in it all. The Tugwi Mukosi dam project was supposed to be a solution to the water crisis in a region prone to droughts. Climate changeinduced droughts and changing rainfall patterns in Zimbabwe have left villagers food insecure and in need of alternative water sources. The dam was also meant to provide irrigation and electricity to the southeastern province of Zimbabwe. But little has come of that for the villagers at Chingwizi, who were promised irrigation infrastructure at their plots. “We don’t have irrigation. I know that if we had, our lives would change for the better here,” Wadyechitsve tells the FM. He says he would be able to

. December 21 - December 27, 2023

Evacuated: A woman walks past what remains of her home after the Tugwi Mukosi flooding

do year-round horticulture at his small plot. Instead “we have to rely on rains”, he says. Still, villagers around the dam had known for decades that they’d have to make way for the development project. They had been in discussions with the government, but those went quiet when construction stalled in 2008. Because it had not been completed by 2014, the villagers were put in harm’s way when the dam face failed; they were evacuated and then relocated. But because their relocation had always been on the cards, the villagers were entitled to compensation. As Coalition for Market & Liberal Solutions founder and executive director Rejoice Ngwenya explains it, the constitution — and all supporting legislation on land planning — “make it clear that any citizen displaced on account of the government’s ‘development objective’ must be fully compensated. Compensation is a statutory obligation which, if ignored, can be enforced through the courts.” On the one hand, compensation takes the form of land for relocation. But, like most relocatees at Chingwizi, Muringa is unhappy over the size of the land he was

Internally displaced: Zimbabwean children rest among salvaged possessions and in a classroom (below) at a transit camp for families displaced by floods near the Tugwi Mukosi dam

Photos: Reuters/Philimon Bulawayo

Diary of displacement ● Early February 2014: Heavy rainfall raises concerns over the structural integrity of Tugwi Mukosi Dam in Masvingo province. The dam’s water level rises rapidly, causing fears of an imminent breach. Efforts begin to reinforce the dam walls and evacuate nearby communities. Around February 10 the dam breaches, resulting in extensive flooding in surrounding areas. This affects several villages downstream. Thousands are displaced and seek shelter on higher ground, primarily at Chingwizi transit camp. ● February 13, 2014: The Zimbabwean government declares a state of emergency in the affected areas, launching rescue and relief efforts. ● March 2014: The authorities announce plans to relocate displaced families to

eventually allocated. From the 4ha the government had initially promised them, he has ended up with just 1ha — a far cry from the more than 7ha he had at Nyajena. The displaced at Chingwizi aren’t the only ones who seem to have found themselves short-changed by the government. In areas such as Chisase and Masangula, some of the victims of the Tugwi Mukosi flooding were, they say, allocated less land than the state had initially promised. Muringa says: “The government lied to me and others at Chingwizi. I thought the terms of 4ha and irrigation of the land would be respected and honoured.” In Nyajena he had practised sustainable subsistence farming, he says. He could also grow some small grains at his other fields, in addition to the staple maize crop. “We could grow cash crops as well, as we did in 2008; we grew cotton, which gave us good money.” All that is in the past. Now he is stuck on a small piece of land that doesn’t allow for subsistence-level farming. And it is not helping that, with the loss of his livestock in the flood, he’s

permanent resettlement areas to prevent further flooding-related risks. ● March-April 2014: The relocation process begins, with the government providing alternative land within the greater Nuanetsi Ranch area. The government faces criticism for its handling of the relocation process, including concerns about inadequate infrastructure and limited access to basic services at the new resettlement sites. ● August 2014: Twenty-nine flood victims are arrested for protesting and burning two police vehicles at Chingwizi transit camp during protests by residents resisting relocation to permanent plots in Nuanetsi Ranch. ● December 2014: A Chiredzi magistrate’s court frees 25 villagers who were part of a group of Tugwi Mukosi flood victims facing public violence charges, after they allegedly went on a rampage

had to manually dig the dry land to grow maize, a staple for survival. The result of such hardships has been food insecurity in the area. “We used to rely on food aid from NGOs like Care, but the government has since blocked them from giving us food aid,” Wadyechitsve says. For Muringa, the small, barren, dry fields at Chingwizi are a constant reminder of a promise broken by the government. He says financial compensation from the state amounted to naught when it came several years ago. In 2016 the government made Z$3.5m available for replacing the structures lost due to the damage of the dam, but the sum did not cover all internally displaced people at Chingwizi. Some were left out, as there was a shortfall of Z$5.5m. Though that debt was settled three years later, the evacuees claim it wasn’t enough. Hyperinflation reduced the value of the money radically. “The compensation came in Zimbabwe dollars and was attacked by inflation. We couldn’t even withdraw the funds from our accounts because of cash shortages in the country,” says Wadyechitsve. “[The government] flooded us out of homes. It created a disaster. It caused the disaster. We were beaten, and were given some Zim dollars. That money did not do anything.” The authorities hadn’t responded to the FM’s request for comment at the time of going to print. x and torched two police vehicles at Chingwizi transit camp. ● 2014-2015: Efforts to provide support and assistance to the displaced families continue, including initiatives to improve living conditions, infrastructure development and access to education and health care. ● January 2015: Four Chingwizi villagers are convicted of attacking police officers and burning two police vehicles in protest at the forced relocation of their clinic from Chingwizi transit camp. ● 2016: The government pays Z$3.5m as compensation to Chingwizi villagers for the loss of their structures. But the sum is not enough to cover everyone; the outstanding balance of Z$5.5m is paid three years later. ● Present: Discussions continue about addressing the long-term needs of affected communities. x

December 21 - December 27, 2023

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ON MY MIND BY CRAIG BUTTERS

JUMPING THE GUN? Are business leaders making their biggest mistake yet in throwing their money behind Change Starts Now? Will the party be able to move the needle in South African politics, or will it fragment the opposition further?

ou’d have to be blind not to realise that South Africa is in an absolute mess, and on the precipice of state failure. I could easily list all the issues, but every South African is affected daily by some or all of them, be it load-shedding, a lack of access to water, inadequate sanitation, alarming logistical bottlenecks and crime. Also, let’s not forget the scourge of corruption that continues unabated, despite the excellent work of the Zondo commission of inquiry into state capture. On top of that the frightening prospect of an ANC-EFF alliance looms large, given the likelihood that the governing party will fail to obtain an outright majority in next year’s elections. For this reason, the emergence of Change Starts Now, under the leadership of Roger Jardine, seems at first glance to be a welcome alternative. Reports that the party has R1bn of funding from various business leaders appears to add further credibility to it. Despite some confusion about Jardine’s exact standing in relation to the DA, one could perhaps understand how some, including potential funders of Change Starts Now, might conclude that additional votes for the DA-led multiparty charter could result in a favourable election outcome in 2024. After all, more votes for the coalition should surely be supported, given the ANC’s dismal failure? Sadly, however, I believe this thinking is based on a flawed understanding of the voter landscape. Without trying to sound like a prophet of doom, I believe this initiative will fail to get out of the starting blocks — or will at best stumble at the first hurdle. Business leaders would do well to think long and hard about their financial support for an initiative that will likely fail to move the needle in any meaningful way. In 36

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. December 21 - December 27, 2023

my view, Change Starts Now will not get the opposition coalition over the line, and any mention of Jardine as president is premature at best. Why do I say this? For any party to make inroads in an ANC-EFF alliance majority it must simply take votes away from the ANC. Or encourage disenchanted ANC voters — those who have lost faith in the governing party but won’t vote for any other existing party, least of all the DA — to return to the polls in support of a viable alternative to the ANC. Support for the DA is likely capped at 25% at best. Even if financial backers were to throw another R1bn in its direction it would not increase its performance at the polls in any meaningful way. It’s the simple reality of our voter landscape. It is difficult to see how Jardine and Change Starts Now will even come close to attracting votes away from the ANC, even more so now that Change Starts Now’s discussions with the DA are out in the open. Instead, Jardine and his party are far more likely to take votes away from the DA and fragment the opposition even further, thus achieving the exact opposite to what our country desperately needs. Longer term, in a worst-case scenario, this may even result in the gradual demise of the DA. Funders are under a serious misapprehension if they believe that parachuting in a new political party will result in on-theground support by a diverse voter base and result in key additional votes. Surely they should realise this. A ‘third way’ While Jardine should be commended for standing up to be counted, I Masi Losi

am concerned that the outcome of these efforts hasn’t been thought through and that his party will serve and appeal to an overly narrow base. And so its publicised financial support, considerable as it seems, will not translate into meaningful and broadbased voter support. Before I am accused of being overly pessimistic, let me say that I am extremely positive about a viable “third way”, which I believe to be worthy of support. Newly formed political party Rise Mzansi is already operating well and represents a realistic alternative with its broad-based, inclusive, nationbuilding approach. The party is channelling its much-needed efforts into the communities that matter, which could make a meaningful difference in next year’s elections. Still, saving the country for the benefit of all requires money. I can only urge business leaders to consider using theirs in a far more effective way to bring about change. Given the precipice on which we find ourselves, we all simply cannot afford not to. x Butters is an independent analyst

Roger Jardine

ON MY MIND BY SHIRLEY DE VILLIERS

KEYSTONE COPS The Gauteng premier’s crime prevention wardens have been accorded the same status as traffic officers. But are they really equipped for the job? here’s apparently no move in South African politics that doesn’t come preconfigured with a certain amount of irony. Last week, it was announced that Gauteng premier Panyaza Lesufi’s crime prevention wardens (CPWs) — his mini-me amaPanyaza — would be accorded the same status as traffic officers. This for a group that has crashed 22 of 200 brand-new Beemers in its first seven months of operations. That’s a cool R17.6m worth of vehicles, by a rough calculation. Don’t tell the real traffic officers, but clearly driving didn’t top the list of training priorities. Let’s hope the firearms training is off to a better start. Even their designation as “peace officers” seems a bit of a stretch. As it is, some CPWs have already been accused of abusing their authority. News reports detail how the amaPanyaza allegedly assaulted a police officer with a baton for drinking a beer outside his property in Thembisa. This after CPW members were accused in November of beating a Katlehong resident so badly that he had to be hospitalised after they searched his home twice and found none of the drugs they were hoping to find. Not helping the “peace officer” moniker are images on the amaPanyaza social media feed of CPWs kitted out in ski masks à la Russian mercenary group Wagner. It gets worse: in keeping with the theme, the group has been taught a Russian parade ground drill — not by our local law enforcement authorities, mind, but by the Royal Eswatini Police Service, famous for firing live rounds and lobbing stun grenades at pro-democracy activists. Then there’s the way the CPWs were willed into existence in the first place. Not a man of small ambitions, Lesufi announced a plan in late 2022 for a fleet of vehicles (200, minus 22 at present), personnel (6,000), drones

crimes they “didn’t know existed”, one starry-eyed recruit told the Sunday Times. And they can’t wait to start firearms training. “When you look at crime, you realise there are some things that can’t be done without firearms,” the recruit said. (500), helicopters And you thought you already (eight), street surfelt unsafe in Joburg. veillance equip123RF Other problems, as if these ment, facial recogniweren’t enough, include that tion cameras and there is no clear command struc“panic button gadgets”, ture, no functional disciplinary system all to be overseen from a and no oversight, the Dullah Omar stadium-sized control centre, according to City Press. All of this at a sugges- Institute’s Jean Redpath writes on ted starting cost of several billion rand, Daily Maverick. a source told the newspaper. Recipe for disaster That’s a lot of dosh, even by our All this for a force that wasn’t — and still profligate politicians’ standards. Still, isn’t — legal. See, Lesufi jumped the while Gauteng’s health and human gun, so to speak, sending his intrepid settlements budgets have apparently recruits out on the streets before they’d been cut, the provincial government been approved by justice minister has been able to rustle up R4bn over just the next three years for the CPWs Ronald Lamola, in consultation with police minister Bheki Cele. — R1.5bn for now. And Lesufi’s response? A leaked That’s covered the costs of transvideo featured him warning an unport, personnel and training — and rifles and pistols, apparently. But find- known minister (presumably Lamola or Cele) that “his days are numbered”. ing 6,000 suitable law enforcement Nothing like good old extortion. candidates for the first intake proved It arguably worked: Lamola has difficult, due to the fact that a fair whack of the applicants had fake quali- now signed off on the CPWs as peace officers with the same status as traffic fications or criminal records, or were physically unfit, according to News24. officers, taking effect once gazetted. Until then, they remain an illegal force, So an initial 3,000-odd wannabes as they have from the very beginning — were rushed through three months of training — against years for police and whatever Lesufi says. All of this is not to say that Gauteng traffic officers. And this instruction was itself deeply dubious, a Daily Mav- doesn’t have a serious crime problem that needs vigorous attention. Or that erick investigation found. Much of it apparently consisted of physical train- it’s wrong to try innovate in fixing that ing, including parade ground drills and problem. Nor is there anything intrins“platoon formation”. So all good if they ically bad about augmenting police caneed someone to drop and give ‘em 20 pacity — the City of Cape Town seems to have done it with some success. — but perhaps less so around the But one can’t help feeling that this nuances of the law. has an element of vanity to it; yet Then just like that, the CPWs were another politician’s ego intruding on let loose on the streets, where they learnt all manner of things. Like how to the day-to-day operational business of crime fighting. take affidavits for everything from More concerningly, there is already fender benders to cases of sexual asabuse of power in the security instisault. The only problem is that they’re tutions that do have tightly regulated not legally empowered to do so, so oversight. Letting loose 6,000 poorly every one of those affidavits is void. trained, overequipped and underLord knows what that means for pomanaged rookies looks like a recipe tential criminal cases. for disaster. x On the ground, they discovered December 21 - December 27, 2023

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yourr mmoney Get in touch! yourmoney@fm.co.za

TOP TRADED

STOCKS

123RF/jimbrow

ON EASYEQUITIES December 12 - December 18 2023

TOP 5 BUYS Value bought

Sasol R10.93m

Anglo American R6.60m

EasyCrypto 10

Unmarried but committed: how to settle your estate

R4.38m

Impala Platinum R3.18m

Pick n Pay Stores R2.65m

TOP 5 ETFs Value bought

Satrix S&P 500 ETF R4.71m

1nvest S&P500 Info Tech Index Feeder ETF R4.50m

Satrix Nasdaq 100 Feeder Portfolio R4.20m

Question: My partner and I have been living together for nine years in a committed relationship. We’ve bought two properties and registered them in our names on a 50:50 basis. We don’t have life insurance yet. Or a testament. We also plan to adopt children. We know that we’ll need to take care of them when they’re older. Would we need life insurance and a testament in this instance? — Name withheld

Satrix MSCI World ETF R3.55m

FNB Global 1200 Equity Fund of Funds ETF R3.03m

UNIT TRUSTS Value bought

High Street High Equity Prescient Fund R1.06m

Satrix Money market B1 R404,338

Coronation Global Equity FF Class P R304,679

Allan Gray Balanced Fund R227,785

Old Mutual Global Equity Fund B1 R211,654 EasyEquities is an authorised financial services provider (FSP no. 22588), a registered credit provider (NCRCP12294) and a licensed over-the-counter derivatives provider (ODP 44).

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A n swe r : I would definitely recommend implementing a will as soon as possible. This applies for any individual and is always recommended. If you don’t have a will drafted and signed, should you pass away your estate will dissolve according to the Intestate Succession Act. The estate will be divided to remaining dependants/family members; this can be a very lengthy process in South Africa, taking years in many cases, and result in unwanted outcomes. By owning a property together you want to ensure that you stipulate what needs to be divided and to whom. This will apply to all assets. This is not only to ensure the property is managed at the time of death, but I would also recommend stipulating what happens should the partnership split. Considering a cohabitation agreement is recommended. There are a few benefits to having a will in place: ● You gain control over asset distribution

. December 21 - December 27, 2023

at the time of death; ● You can avoid family disputes and delays in winding up the estate; ● By doing the estate planning analysis, your estates can be optimised to ensure unnecessary taxes are not incurred at this stage; ● You can name an executor, and ensure the winding-up process runs as smoothly as possible, taking everyone’s wishes into account; and ● Unmarried partners are protected, as being unmarried you may not have legal claim to a partner’s estate. Life cover will also be required, depending on a few components. Do you have debt outstanding on the properties? Are there any financial dependants who need to be taken care of? And if you want to ensure your parents are taken care of should you pass on before them, I recommend structuring cover for this as well. Life cover will also protect the partnership should one of you pass away. If you are both still earning an income at this stage, and the household expenses rely on both incomes, I’d recommend some sort of critical illness cover, as well as a monthly income protector. Should one of you become disabled or ill, and lose the ability to earn an income, this can be replaced in the household. I’d recommend doing an estate planning analysis to ensure that all these principles are calculated and addressed. — Elke Brink, PSG Wealth

Your 2023 portfolio review Take some time this holiday to review the shares you own. If you were to build a portfolio from scratch, would your stocks still make the cut?

ou’ve made it to the end of the year. It’s been tough, and local markets have been two-faced with some great winners and some horror losers. So now it’s time to review your portfolio performance and, as importantly, your portfolio holdings. I wrote about tracking your performance in late November, so for this last issue of the year I want to focus on your portfolio review. Traditionally my process is checking in on all the stocks I hold, of which there are usually 12-15. When I buy a new stock I always write down the top three things I like and dislike about the stock and I refer back to that list. Are they still valid? Are any changes for the better or worse? For example, when I first bought Shoprite* about 20 years back, one of the main points was excellent operating margins and over the years it has managed to hold on to that. If your stocks continue to demonstrate excellent qualities, such as great margins and market share gains, the share price will, in time, follow suit by rising in value. But if they’re missing the key points that attracted you to the business then perhaps it’s time to exit and find a better option. Importantly, the list of what you like and

don’t like about a stock will change over many years, but be cautious with short-term changes. Remember the long-term goal of investing and make any tweaks small unless something really big happens. This all said, I saw a great article by Morgan Housel which had a line that really got me thinking: “How many of us, if given a blank slate, would create an identical portfolio to the one we have now?” Forget what you own, focus on what you want to own. We often have stocks that we bought with great hope and expectations but now they’re just bumbling along or maybe even have lost their way. We hold on because we have faith, and because we hate to admit we were wrong. So I plan to do this over my holiday. What 12-15 stocks would I ideally like to be holding at the start of the new year at current prices and valuations? And valuations is the tricky part here. Shoprite I absolutely want to hold but current valuations are rich, as they often are with Shoprite. You really have to wait for a good entry point, so maybe the above should ignore current prices. If you want to own a stock, decide what

123RF/macrovector

Simon Brown

price you think is fair, and wait for that level to transpire. Yes, the wait may be long, but the idea of a clean slate for my portfolio is appealing. However, there is one last, very important, proviso. Don’t stress too much about the price of your current holdings. Sometimes a great stock sees its price under pressure but we should not panic. For example, Richemont* is down more than a third from the recent highs, but those highs were crazy and the business remains the same regardless of price. x * The writer holds shares in Shoprite and Richemont

BROKERS’ NOTES

What the smart money is doing David Shapiro, portfolio manager: Sasfin Securities

B uy: Eli Lilly We are going to go into a good year and rates are going to come down and all the themes we’ve been talking about are going to materialise, such as AI as everyone tries to upskill their businesses. But the one theme that will dominate is weight-loss drugs. At the moment I still favour Eli Lilly. I know Novo Nordisk led the way and others are going to muscle in, but it’s not too late to buy this share even though it’s had a very strong run. It’s still going to be one of the front-runners as more and more people want to pick up on this theme. This is a real issue and it has real benefits. x

Sell: BAT and Diageo On the negative side, there’s a fear among the brewers that these weight-loss drugs are going to stop people drinking beer, though I don’t think that’s an issue. But as for the British American Tobaccos of the world, smoking is a dying industry. We saw what BAT wrote off with its Reynolds assets. As far as the drinks companies are concerned, we’ve seen a big battle for shelf space for players like Diageo, in particular against Indian manufacturers. If you’re a big brand and going into India, you’re competing against home industries. So I think it will be more difficult for the incumbents. Though they might not fall in a heap, I don’t think they are going to go anywhere, and it’s time to give up on that theme. x December 21 - December 27, 2023

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ON MY MIND BY JEREMY SAMPSON

INVISIBLE STRENGTHS How do you put a value on a business today? It may sound simple — but is it? As the world moves towards including intangible assets in company valuations, South Africa is behind the curve scar Wilde famously once said: “Nowadays people know the price of everything and the value of nothing.” That tallies with how we have traditionally viewed companies. Go back 30 years or so, and 80%90% of the value of a company was determined by its tangible assets (think buildings and machinery) with the balance dismissively known as intangibles and considered of little financial value. Fast-forward to today, and the global value of intangibles is 45%. Intangibles can fall into three categories: ● Rights, including leases, agreements and contracts; ● Relationships, including a trained workforce; and ● Intellectual property such as brands, patents and copyright. London-based consultancy Brand Finance has spent the past 25 years

123RF/studiostoks

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. December 21 - December 27, 2023

monitoring the rise in the value of intangibles. Through its Global Intangible Finance Tracker (GIFT™) we know that in the past 12 months alone the value of intangible assets has risen 8%, from $57.3-trillion to $61.9-trillion. This figure is significant — almost three times the value of the GDP of the US. Apple is the most valuable public company, with intangible assets valued at $2.7-trillion; it is also up 8% on the year. This demonstrates the continued and growing importance of intangible assets, specifically brands and innovative technology. Historically there’s been the challenge of low disclosure of intangible assets and the difficulties this creates for efficient fund allocation and growth support. Most intangible assets aren’t mentioned on balance sheets due to the limitations set by the accounting standards boards, which state that internally generated assets such as brands cannot be disclosed while acquired brands can. That means Diageo, the world’s largest alcoholic drinks company, can talk of Smirnoff Vodka, as an acquired brand, but not of Johnnie Walker, which is home-grown. This ruling may finally be about to change. For a start, the International Accounting Standards Board (IASB) has added intangible assets to its official agenda. And the intellectual property office of Singapore broke ranks and this year released an intangibles disclosure framework — the first of its kind. As the IASB pivots to face the reality of today — something not unique to the world of accounting — company managements will also need to recalibrate. We suggest a first step would be to identify all intangibles, both home-grown and acquired, then put a value on them and monitor the factors affecting them.

The local picture In South Africa there are significant companies that trade at a considerable discount to their NAV on the JSE, with little or no attention given to their intangible value. Some seem to forget that this country is part of the greater world. Therefore, to look at the global data and compare ourselves can provide fascinating insights into how we are performing. The report card of the local economy over the past decade or so is not pretty. Brand Finance estimates that the value of companies listed on the JSE is $384bn, down 18.5% over the year. For context, and taking into account the mix of companies listed on the bourse, consider that 24% of the listing value is intangible, compared with the global average of 45%. The sectors with the largest proportion of intangible value are pharma (63%), leisure and gaming (50%) and health care (50%). Sectors we consider undervalued are retail and chemicals. Banking is the only sector outperforming the average global percentage of intangible value that contributes to business value. As a result, we estimate that companies on the JSE are potentially undervalued by a staggering $147bn. Warren Buffett once said: “If you gave me $100bn and said: ‘Take away the soft drink leadership of Coca-Cola in the world’, I’d give it back to you and say it can’t be done.” Buffett long ago understood that on many occasions brands are the most valuable asset a company owns and, when nurtured and invested in, provide above-average long-term returns. Some years ago I was asked to put a price on the Nelson Mandela brand. I said it was not possible, as a brand has to be infinite, but that Mandela’s value to South Africa was immense. Pushed for an answer, I finally said the Mandela brand was “priceless”. And so it is to this day. x Sampson is chair of Brand Finance Africa. Additional data from Annie Brown and Oliver Schmitz

investing Analysis and coverage of SA's top companies and investments - the guide to where your money should be

47 Don’t fear the bear (market) There have been 12 bear markets on the S&P 500 since 1957. Over that time, the index has gained 65,000%. The moral: stay invested

42 Taxi trauma cuts deep

Jonathan Jawno’s first gig as CEO of a listed company could hardly be tougher: fixing one-time high-flyer Transaction Capital

48 The 2024 game plan Think global equities and extremely select JSE exposure — unless the government drops NHI, fixes our infrastructure crises and unlocks our growth potential

49 44

The rise, fall and rise of Sirius

Fingers crossed for SA retailers

It’s reclaimed its status as the JSE’s best property performer. Is it too late to get in?

Will it be a grim year-end or the relief shopping rally they need? The jury is out

A PensCorp buyout for the Christmas stocking? Rumours abound that a clutch of international investors are circling PensCorp — in which Johann Rupert’s Reinet has a 48.9% share

December 21 - December 27, 2023

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investing TRANSACTION CAPITAL

Taxi trauma cuts deep New CEO Jonathan Jawno’s debut gig could hardly be tougher: fixing one-time high-flyer Transaction Capital Rob Rose

● Maybe experience isn’t all it’s cracked up to be. Jonathan Jawno, the man hailed as the “wartime leader” to fix South Africa’s biggest car crash of 2023, had never been the CEO of a public company before taking over as head of Transaction Capital two months ago. “To put the adjective of ‘wartime’ in front of my title, maybe that’s premature,” Jawno tells the FM. “First, let’s see if I can be a CEO, then we can start talking about whether it’s ‘wartime’ or ‘peacetime’.” To be fair, Jawno is no greenhorn. He

Jonathan Jawno: The taxi industry isn’t going anywhere

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and partners Michael Mendelowitz and Rob Rossi were the triumvirate who, 20 years ago, created Transaction Capital — which became the largest financier of South Africa’s minibus taxi industry. It listed on the JSE in 2012 at R8 a share, before snapping up 74% of used car firm WeBuyCars in recent years for R3.4bn. Jawno, Mendelowitz and Rossi still own 14.2% of it. Still, to catapult Jawno into the top job during the biggest crisis in Transaction Capital’s history is some ask. After all, it’s in the top five biggest losers on the JSE this year, having tumbled 79% after SA Taxi hit the skids as thousands of taxi owners were unable to repay loans. That’s R20.3bn in value which went up in smoke, leaving a company valued at just R5.3bn. “It’s definitely the toughest time in the company’s history,” says Jawno. “As with any pioneering business which tries to formalise something like the taxi industry, we’ve had ups and downs. But in this postCovid world, a number of challenges hit us at once. It’s sad, but the economics of the taxi industry have changed forever.” The implications of that are immense. In a country where state-run passenger services — specifically trains and buses — have largely ground to a halt, taxis carry 15-million South Africans to work every day. Without taxis, South Africa doesn’t work. Jawno says it’s one of the few industries in South Africa effectively outsourced to the private sector. “It’s worked well for 20 years because it’s been economically viable for private entrepreneurs, like taxi owners, to step into the role that should be provided by the government. But now, with fuel hikes, inflation, the steep

. December 21 - December 27, 2023

rise in the price of new vehicles and heavily distressed consumers, the economics aren’t what they once were,” he says. No kidding. Transaction Capital put an altogether more tangible face on this crash when it released its financial results for the year to September two weeks ago. Sensitive readers might want to stop here because it was, as analyst Simon Brown puts it, “a horror show”. The bottom line was that Transaction Capital made a R1.3bn loss — a stomachchurning reversal from the R2bn profit of the year before. This catastrophe was entirely due to SA Taxi, which lost R3.8bn as it wrote off bad debts worth R1.7bn and had to raise provisions of R1.3bn. The other arms did what they could — WeBuyCars made an R818m profit and collections business Nutun a R438m profit — but the story was all about how toxic taxis had become. It was enough of a disaster for Stephen Munro, the Deloitte partner responsible for auditing the company, to publish an “emphasis of matter” in the financials. He said: “The requirement for funding restructuring and the ongoing support from the debt funders of SA Taxi indicates that a material uncertainty exists that may cast significant doubt on SA Taxi’s [ability] to continue as a going concern.” It illustrates how sharply sentiment has soured: one moment SA Taxi was the jewel in the crown of a must-have growth stock; the next, it was the reason to run. Zwelakhe Mnguni, chief investment officer of Benguela Global Fund Managers, describes the results as “terrible, hopefully the worst we’ll ever see in this business”. SA Taxi, he says, looks impossibly weak. “I worry that the big jump in loans that are in default carries some risk of new impairments in the coming months.”

Labour force: Taxis carry 15-million South Africans to work every day Sowetan/Antonio Muchave

2023

Yet Jawno, quite unexpectedly for a Not only is this because Transaction first-time CEO, has been received by inCapital needs the strong cash flow of vestors as if he’s the long-lost prince come WeBuyCars to pay down debt, it probably to slay the bad debt dragon. Despite the wouldn’t raise as much in a listing as worst figures in its history, Transaction everyone expects. Capital’s share price has risen 89% in the But Jawno is right that something must past three months, off its depths, to R7.55. be done, since Transaction Capital is likely And analysts still see huge value in the to carry the stigma of SA Taxi for some time company. — with good reason. In a report in early December, SBG SeBuried in the fine print of its annual curities says the “improved performance financial statements, Transaction Capital of WeBuyCars, in what continues to be a reveals that R2.4bn worth of SA Taxi’s tough economic environment, [is] encour- R16.4bn in loans is more than three months aging”. overdue, but hasn’t been impaired as the Partly because company reckons of the almighty this is “not approCAR CRASH YEAR thrashing of the priate”. Transaction Capital share price (c) stock, SBG Securit- Weekly Equally, of its ies expects the mammoth R25.3bn 5,000 share price to rise interest-bearing 33% within a year to 4,500 debt, a third 4,000 hit R9.14. (R8.7bn) is due to be Citi is even more 3,500 repaid within a year. 3,000 gung-ho. The reTransaction Capital search house exhas made sure SA 2,500 pects the stock to Taxi’s debts are 2,000 deliver a 38% total ring-fenced and 1,500 return within a can’t pollute the rest 1,000 year. of the business, but 500 If there’s any that’s still a lot of 0 single reason the debt. Apr Jul Oct Apr Jul Oct stock has suddenly Can the rest of sparked to life, it’s the business cushSource: Infront Dividend speculation that ion this? Mnguni Transaction Capital isn’t sure, pointing could split out WeBuyCars and Nutun, and to the fact that while WeBuyCars sold 13% list them separately on the JSE. more cars, its operating profit came down, Asked about this by the FM, Jawno says “which shows you there must have been a no option is off the table. big squeeze on pricing”. “Shareholders have been badly hurt, so FNB analyst Sithembile Bopela is more we can’t just sit around. And it’s clear that positive, arguing that despite the headthe value of the assets like WeBuyCars and winds, Transaction Capital still has a Nutun isn’t reflected in the share price. So “strong growth profile longer term”. we have to do something about that — Can this recent momentum be suswhether it’s a separate listing or not.” tained? And can Jawno, for however long The numbers suggest it would be a slam he’s around, restore faith in the company’s dunk. Transaction Capital is valued at management? R5.7bn on the JSE, yet most analysts value “This wasn’t planned, obviously. But I’ve WeBuyCars at north of R2.3bn, and Nutun found I’ve actually loved being more inat a similar value. Some analysts value volved operationally. I’ve realised it doesn’t each business at R5bn. suit my personality to hold a more passive, Jawno treads carefully on this, but con- less hands-on role. I’m not the kind of guy cedes: “Yes — by pretty much any measure, who wants to go sit on the farm and watch the reality is that the value of these two the company going through this from afar,” businesses is dramatically more than the he says. value of Transaction Capital today.” As a result, he’s not picturing this as a Yet while Citi believes the share price 12-month hatchet job, but more as an execwill inevitably rise, given the options being utive role for a couple of years. “Maybe, if I considered to unlock value, it still thinks do a good job here, I’ll get offered a proper the unbundling of WeBuyCars is the least job one day,” he jokes. Something easier, likely outcome. perhaps — like CEO of Transnet. x 2022

It’s a common view. “These results just showed how Transaction Capital has derated from a niche, high-growth bank with a competitive advantage to a used car dealer,” says Sasfin Securities analyst Alec Abraham. And while the company was all the rage among investors a few years ago, Abraham says “it’s now been relegated to a speculative stock”. There’s no shortage of anger among investors either, who rode the share price rollercoaster up to R52 less than two years ago, then down to R3.94 in September. The distrust began brewing a year ago when Jawno’s predecessor, David Hurwitz, sold 40% of his shares, held in his family’s trust, for R51m. A few weeks after that, Transaction Capital issued its first profit warning. The company said Hurwitz had no choice but to sell, as his trust was “in breach of certain covenants relating to debt it held”. But it fuelled the impression, as Mnguni puts it, that the top brass had protected themselves while leaving investors “high and dry”. So, was Hurwitz an unlucky victim of a brutal market? Or was this disaster an own goal, caused by poor decisions? “I don’t think any businessperson should be blaming things on the market,” says Jawno. “People pay us to have foresight, not hindsight. So, we misread what was happening around us, and underestimated the impact. And we should have responded much quicker. Had we done that, it One moment would have been less painSA Taxi was ful for everyone.” the jewel in Still, he says, the comthe crown of pany has made the dramatic a must-have growth stock; changes that were needed. For instance, SA Taxi will the next, it no longer finance new was the reason to run minibus taxis, only used taxis. It’s a huge strategic swing for the vehicle financier, but Jawno says it’s entirely rational given the soaring price of new taxis, which wipes out any profit for taxi owners. Jawno doesn’t see that changing soon, though he believes the industry will survive. “Look, the taxi industry isn’t going anywhere. It’s not Kodak or Polaroid, where it won’t exist in two years. I’ve got no doubt we have a future — as long as we make the big adjustments now.”

December 21 - December 27, 2023

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investing

Andrew Coombs: Strong price growth across nearly all Sirius products

PROPERTY

The rise, fall and rise again of Sirius The rand hedge play has reclaimed its status as the JSE’s best property performer. Is it too late to share in the pickings? Joan Muller

● Shareholders of Sirius Real Estate have been on something of a rollercoaster for the past three years. After a stellar share price performance in 2021, when the German and UK-focused business park owner emerged as the JSE’s best performing property stock, Sirius plummeted nearly 50% in 2022. This year, Sirius was firmly back on investor radars, again ending the year as the property sector’s top dog. The share has notched up an impressive total return Islington Studios: Office, studio and workshop units in North London

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of 42% in the first 11 months of 2023, streaks ahead of the 0.2% delivered by the South African listed property index over the same period, according to Anchor Stockbrokers figures. The company’s strategy is to buy older, undervalued business and industrial premises, often on the outskirts of cities and towns, which it upgrades and redevelops into flexible and conventional workspaces for SMEs as well as larger companies. Analysts argue the dual-listed share (on the JSE and London Stock Exchange) was oversold in 2022, primarily as a knee-jerk reaction to the rapid rise in interest rates — and not due to a deterioration in the company’s underlying performance. In fact, Sirius is one of the few property companies that has consistently grown its dividend every year since listing on the JSE in December 2014, even during the pandemic, when most suspended or slashed payouts. Nicolas Lyle, property analyst and portfolio manager at Stanlib, says Sirius’s share price was driven lower last year by fears that a global economic recession was imminent, causing a rotation out of small-cap stocks into larger companies. Further pressure was placed on the share when one of Sirius’s anchor shareholders rebalanced its portfolio. Lyle says this year’s rebound comes on the back of a strong operational performance. For the six months to September, Sirius achieved an increase of 9.3% and

. December 21 - December 27, 2023

11.1% in funds from operations and dividend payouts respectively. Rentals in its €2.1bn portfolio of business and industrial parks, which is split 80/20 between Germany and the UK, grew by an average 7.7% on a like-for-like annualised basis. That means Sirius has delivered its 10th consecutive year of likefor-like rent roll increases exceeding 5% at group level. Lyle believes Sirius was also the beneficiary of a general rotation out of low-yielding assets into higher-yielding stocks, to provide investors with a stronger margin of safety over rising bond yields. Rand weakness also led to local investors gravitating towards inward-listed offshore stocks this year. The key question now is whether Sirius offers further share price upside. Lyle believes Sirius remains a good buy, “both on a relative and absolute basis for those with a one-year-plus view”. He refers to last month’s successful capital raise of just more than R3bn, most of which will be used for acquisitions. “While this cash will act as a short-term drag on earnings growth, the shares still offer a double-digit free cash flow yield in euros with upside should they deploy the proceeds quicker than expected,” he says. Sirius has already bought several assets in the past four months in the UK — in Liverpool, Barnsley and North London — for about R1bn. He adds that the balance sheet is in great shape and that the company has the highest interest cover in the sector, with no significant debt maturities due until 2026. “The property portfolio’s reported valuation yield north of 7% [in euros] is also

2023

2022

RETAIL

Fingers crossed for SA retailers Will it be a grim year-end or the relief shopping rally they need? The jury is out Adele Shevel

● There’s an anxious sense of Christmas Grinch, rather than good cheer, for retailers this year. And analysts predict a bleak trading season while people hunker down to buy basics and necessities. It follows a muted Black Friday period during which BankservAfrica recorded a year-on-year decline in volume of more than 6% and a drop of more than 21% in value. Evan Walker, portfolio manager at 36One Asset Management, expects an “exceptionally tough” Christmas, with corporate and bonus levels substantially down. He says a lot of big sectors such as platinum, gold and transport are experiencing

THE APPAREL UNRAVELLING Truworths vs Pepkor vs TFG vs Mr Price Weekly – based to 100 150

Truworths Pepkor TFG Mr Price

140 130 120 110 100 90 80 70

2023

Frankfurt Ostend: 16 floors of office space

2021

2020

compelling relative to bond yields.” published last month after the release of Lyle cites a potentially sharp rise in long Sirius’s interim results, Peel Hunt upbond yields and a deep and protracted graded its buy recommendation on the recession in Germany and the UK as pos- stock, raising its 12-month LSE target price sible triggers for another drawdown. from 105p to 115p. That represents a hefty However, he says it’s unlikely that 30% share price upside on the 89p that Sirius’s share price would drop by more Sirius was trading at earlier this week. than 10% in the near The report reads: term “given current UP, DOWN AND UP “In our view, Sirius’s valuations and the proven ability to Sirius share price (c) – Monthly quantum of cash sitdrive income and ting on the balance 3,000 value from undersheet”. managed and un2,800 Brendon Hubderinvested assets bard, portfolio man- 2,600 puts it in a very ager at ClucasGray, 2,400 strong position to agrees it’s not too continue generating late to buy Sirius. At 2,200 strong returns.” this week’s share While a stronger 2,000 price of about R21, than expected re1,800 Sirius is still trading cession in Germany at a discount to NAV 1,600 could put pressure of 10%, vs a 60% on earnings, Sirius 1,400 premium to NAV at CEO Andrew Jul Jul Jul Jul its peak at endCoombs tells the FM 2021. that most economSource: Infront Dividend “We believe the ists now expect stock should be Germany to post a trading at a premium because of the higher recovery next year, with an average 1.3% growth profile of the company and, more GDP growth forecast for 2024. That folimportantly, its hugely successful operat- lows an expected GDP decline of up to ing platform, which is not reflected in the 0.5% for 2023 as a whole. NAV calculation,” says Hubbard. Coombs believes Germans are more He says Sirius is one of the few concerned about governance issues and European property companies that is still the next general election, set for October managing to achieve inflation-beating 2025, than a recession. rental increases and NAV growth, notwithAnd he says Sirius isn’t seeing any destanding the high interest rate environcline in inquiry levels, or an increase in ment. tenant defaults. “What we are seeing inUK investment bank Peel Hunt has an stead is strong price growth across nearly equally bullish outlook. In a research note all of our products.” x

Apr

Jul

Oct

Source: Infront

December 21 - December 27, 2023

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investing huge problems, which means many won’t be receiving 13th cheques and performance bonuses. In Walker’s view, discretionary items will take the biggest hit as people focus on necessities, while those who can still afford it might struggle to get their high-end clobber, such as sneakers, owing to the logjam at our ports. “I think it will be quite bleak,” says Walker. Much also hinges on the amount of load-shedding that will take place in the next two weeks, as it will affect people’s ability to store food. The traditionally stalwart alcohol sales have come down substantially too as consumers have spent money on inverters, generators and paraffin. And, of course, we’re still at peak interest rates. Independent retail expert Chris Gilmour says: “It’s difficult to see any real enthusiasm. Everywhere I look on the nondiscretionary side, it’s hand-to-hand combat.” As for this year’s disappointing Black Friday, Walker says it’s no longer the aspirational event it once was, particularly as it has morphed into a month of so-called bargains.

Down to basics: Research shows shoppers are looking for essentials and food this festive period Sunday Times/Moeletsi Mabe

2023

continues to dominate South African apparel sales to the detriment of businesses in the country. One retailer Gilmour says is managing to sail through it all is furniture seller Lewis. “The company looks interesting; it talked about the port congestion but its ability to keep on sourcing its materials is quite incredible and its ability to provide Massmart customer research indiccredit is what’s kept it going.” ates that shoppers are looking for essenGilmour expects a lot of demand for tials and food this festive period. But the credit over the Christmas trading period, company has also recorded a marked increase in the number of toys sold per bas- as interest rates will probably stay pretty high until the middle of next year. ket from November to December. MassThe bigger problem, says Casparus mart foresaw the impact of the peak period Treurnicht, portfolio manager at Gryphon delays caused by the ports crisis, and Asset Management, is that consumers placed orders earlier in the year. simply aren’t moving forward, due to the FNB’s Wayne McCurrie cautions that avalanche of the Transnet delays obstacles they face are negative for the FOOD RETAILERS IN 2023 Woolworths vs Shoprite vs Spar vs — not least of which whole country, not Pick n Pay – weekly – based to 100 is a dead-end jobs just for retailers. market. “At best we “The real problem 120 might just hold on to for retailers this sea110 a line that is becomson is muted coning very thin,” he sumer expenditure 100 says. and not really stock 90 “The South Afrishortages. The ef80 can consumer is fects of the port heavily dependent delays will be detri- 70 on the first, second mental but not as and third rounds of much as the state of 60 Woolworths commodity prices, the consumer.” 50 Shoprite and these look OK There are some 40 Spar compared with preretailers that are Pick n Pay Covid levels, but the likely to do well; the 30 wave of inflation only problem is, Jul Oct Apr that has followed they’re not local. eroded any benefit Think Shein, which Source: Infront 46

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. December 21 - December 27, 2023

that was left.” It means, Treurnicht says, that though the cost of living crisis is worldwide, South Africans are experiencing more pressure than people in developed countries. Walker, in turn, warns that the movement of food inflation “is stickier on the way down” than it was when it was going up. There is one positive factor, says Sasfin’s Alec Abraham: tourism. Arrival numbers have picked up, and this supports retail sales and restaurant trade, though Abraham points out that tourist numbers are still about 20% below pre-pandemic levels. As for big apparel retail, TFG CEO Anthony Thunström says: “While our customers still face economic pressure, and loadshedding continues to present uncertainty, we are optimistic about this festive season trading period.” Thunström says TFG’s businesses all have enough stock to trade through the season, partly thanks to a cunning bet the retailer placed on developing its local manufacturing capabilities a while ago. In fact, 75% of its goods are made in South Africa. Certainly, a good Christmas would help inflate a mostly limp year for some of South Africa’s biggest retailers. Year to date, and including dividends, Mr Price is down 0.9%, Pepkor has dropped 3.7% and Lewis lost 3%. Spar fell 0.6% and Pick n Pay slumped 61%. On the bright side, Shoprite shares gained almost 20%, TFG rallied 9.8% and Woolies bounced 8.7%. The major outlier is Truworths, which had surged an astonishing 45% by the time of writing. x

on my mind by Adriaan Pask investing THE FED EFFECT

his year has not been easy for local investors. Local challenges such as relentless power cuts, deteriorating rail infrastructure, the country being added to the greylist of the Financial Action Task Force, higher interest rates and subsequently higher living costs have forced most to tighten their belts. Offshore events such as the RussiaUkraine conflict, the more recent war between Hamas and Israel, the slow recovery of the Chinese economy and a very concentrated US market have all caused increased volatility at home and abroad. The bad news is that markets will remain volatile in 2024. Elections and the direction of interest rate policy are known risk factors, but investors can expect the inevitable surprise or two. Let’s talk about elections, which typically lead to policy uncertainty, which in turn causes volatile market conditions. The US, Taiwan, India, the UK, Germany and Russia are all expected to vote next year. In fact, no fewer than 76 countries will vote in 2024, which accounts for 39% of countries. These nations represent 4.2billion people and 59% of global GDP. General elections will also be held in South Africa to elect a new National As-

from baseline

0 123RF/gulzarkarimn

Don’t fear the bear (market)

Impact on GDP level of a 5% point increase in the Fed funds rate, compared with baseline forecast % difference

-0.5 -1.0 -1.5 -2.0 -2.5 Q1

2023

2024

2025

2026

Source: Bloomberg

sembly and provincial legislatures. With “Ramaphoria” long gone, the continued underperformance of stateowned enterprises and a raft of corruption allegations against top government officials, you can understand why capital has flowed out of a tentative and fragile South African market. As for interest rates, opinions about whether central banks will need to increase interest rates or start cutting is a narrative that changes daily. This will add to market volatility next year. From April 2022 the Reserve Bank increased interest rates from 4% to 8.25%. The European Central Bank increased its borrowing costs from 0% in July 2022 to 4.5% at the last meeting in October. The big daddy of them all — the mighty US Federal Reserve — lifted its rate from 0.25% in April 2022 to 5.5% this year. Only recently has US inflation started to come down and there are signs that the American labour market is cooling. It confirms research that it takes about 18 to 24 months for higher interest rates to filter through an economy. Despite POLLING THE PLANET the past few weeks’ Fed-induced 76 countries are set to vote in 2024 rally — thanks to markets anticipat2024 elections Total Global share ing bigger than expected interest rate cuts next year — we think the risk of expectations not being met is quite Number of 39% 76 high. countries voting In short, nobody can predict with certainty what the results will be for markets over the short term, but we 4.2 bn Population 51% can confidently say things will be volatile. While this is hard to bear for many, equities are the asset class GDP 59% $65.8-trillion that most investors need in their portfolios to shield against the erod-

ing effects of inflation. Stay focused Given that a bear market generally happens every four years, investors shouldn’t panic when it occurs, because the pain typically subsides in less than a year. It’s important to remember that bear markets don’t last forever, as the market crashes caused by the pandemic, the 2008 global financial crisis or the dot-com bubble showed. Twelve bear markets have occurred since the S&P 500 index was first established in 1957. The 1990 bear market saw a 19.9% drop. The most recent cycle, which lasted eight months and had a 25% decline, ended in 2022. Yet the S&P 500 has nonetheless made a total return of more than 65,000% since 1957, or an average of more than 10% a year, despite these frequent losses. More importantly, bull markets follow bear markets — and these last three times longer than bear markets on average, with an average gain over the duration of the bull run of 111%. Interestingly, about 42% of the S&P 500 index’s strongest days in the past 20 years occurred during a bear market. Another third of the market’s best days took place in the first two months of a bull market before it was clear a bull market had begun. So the best preparation for uncertainty is to understand that markets do fall at regular intervals, but they always recover, and if you accept that 2024 could be volatile or even be characterised by a significant downturn, you will be less likely to make emotional investment decisions. Stay focused on your long-term objectives, knowing that markets are unpredictable over the short term and lucrative over the long run. x Pask is chief investment officer at PSG Wealth

Source: IMF, & Goldman Sachs Asset Management. As of November 13 2023.

December 21 - December 27, 2023

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the ghost train by the finance ghost

The 2024 game plan

123RF/jopanuwatd

efore looking ahead to 2024, we need to reflect on 2023 and lessons learnt. Coming into this year, my concern was that a rising interest rate environment would lead to a disappointing year for equities in South Africa and possibly offshore as well. I was half-right, at least. Locally, the top 40 index is only slightly green for the year, so you got some dividends and not much else. A practically risk-free money market account at a local bank would’ve been better. In the US, the Nasdaq 100 has been dominated by the incredible performance of the “Magnificent Seven” as the evolution of the FAANGs — Facebook (Meta), Amazon, Apple, Netflix and Google (Alphabet) — drove the index 53% higher for the year. The S&P 500 has returned more than 23%, which is still a fantastic result but much lower than the tech-heavy Nasdaq. The S&P 400 is a midcap index that is showing a return of 14% this year, so that’s a better indication of how the US market outside the tech giants has performed. Either way, even before translating the offshore performance into rand, this was a year to have your money in US equity exposure rather than local equities. South Africa scored many own goals and our almost non-existent economic growth isn’t rewarding equity investors. It’s a different story for yield-focused investors, as South Africa offers decent yields that even look reasonable on a riskadjusted basis. Yield investing is about

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finding cash flows that can service a fixed coupon. Equity investing is about finding growth. South Africa is struggling to offer that because of our terrible infrastructure situation, with dire consequences for our mining industry and industrial companies. For now at least, the former is protected by the sheer resilience of South Africans and the strength of our judiciary. Global equities only 2024 is an election year in South Africa. Our trains don’t work and our electricity is dicey. Noise over National Health Insurance (NHI) and other electioneering tactics will dominate headlines. In the interest of a balanced view, petrol prices might be coming down at least, which would certainly give some relief to consumers. If the US Federal Reserve is to be believed, then interest rates should also start coming down and the Reserve Bank should follow suit, provided the resultant impact on the rand doesn’t break the inflation thesis. Overall, it’s not a great setup for broad local equity exposure heading into 2024. I am feeling even more bearish than I was at the start of 2023, particularly when I see mining groups cutting back on production and capex. This will hurt the fiscus, so we are unlikely to see much budget relief for higher-income groups who are paying a ridiculous effective tax rate in the form of statutory tax, followed by “real-world” taxes of private schooling, health care and security. On top of this, NHI is the one thing that could cause mass emigration. Though it will probably be dragged through the

. December 21 - December 27, 2023

courts for many years, it will change the way people feel about renovating their bathrooms or even buying residential property, so consumer discretionary spending is a major risk. Of course, this doesn’t mean that there aren’t opportunities on the JSE. You just need to put in the work to find them. For example, it looks like the tourism industry is booming. Another angle is that with rates (hopefully) coming down, businesses that rely on higher levels of debt, like property funds, will be given some relief. There are local property funds with terrific portfolios locally and abroad (particularly retail properties). In general, businesses trading at modest multiples and making solid strategic moves are always interesting and capable of delivering solid returns. But for broad market exposure, I consider only global equities. I have no desire to invest in the concept of South Africa as a whole. I don’t even own residential property here. A buy-and-forget strategy of broad exposure requires economic growth and stability, neither of which is a likely outcome of South African government policies at the moment. Locally, 2024 will be more of the same for me: picking stocks and earning decent yields. Offshore, stock picking is a fun and potentially rewarding experience. But given the trajectory of South Africa, I’ll also be taking any opportunities to use rand strength to shift my exposure into dollars. I’m anticipating a bumpy 2024 for the JSE, even if global interest rates come down significantly. I so badly want to be wrong. x

market watch by Marc Hasenfuss investing

A Yuletide PensCorp buyout? here is a long-held contention that it is better to hold shares in a life assurance company than to buy life assurance products. I might have to concur — though let it be said, I’m not recommending buying life assurance company shares. I have a small life policy payout due to me courtesy of my late mother (bless her heart). It certainly won’t change my address or fund a spanking new vehicle; it’s more likely enough funds to ensure a lifetime supply of tennis rackets, balls and knee braces. But it’s a welcome stipend nonetheless in these lean times. The first correspondence to the life assurance group in question was dispatched on October 18. More than two months later, the matter remains woefully unresolved and there is a distinct lack of momentum, with “internal processes” still ongoing. Last I checked, priority status was attached to the matter. That was December 8, so any flickers of enthusiasm have been duly doused. I wouldn’t dare throw around accusations of stalling, even if it would serve the assurer quite well to retain capital for as long as possible. I’m just surprised by the level of bumbling bureaucracy, which seems out of place in a modern financial services industry. It did, however, prompt me to contact my life assurer to make some rather morbid inquiries about just how swift and painless the claims process would be for my grieving beneficiaries — something I don’t think too many people consider before taking up a life policy. I’m still not sold on buying shares in assurance/insurance companies, but I do see that some heavy-hitting international investors are quite keen on the sector. Reports from the Financial Times suggest that investment firms Apollo, Carlyle and the “barbarous” KKR are pondering separate bids for UK-based Pension Insurance Corp (PensCorp). Local investors will know that Rupert family-controlled investment vehicle Reinet is a major shareholder in

PensCorp, with a stake of close to 50%. In fact, PensCorp now ranks as Reinet’s biggest investment, representing, at last count, 48.9% of the portfolio’s €5.6bn NAV. PensCorp plies its trade in the UK pension risk transfer market, offering tailored pension insurance buyouts and buy-ins or bulk annuities. It’s been a pretty sweet niche. In the first half of the 2023 financial year PensCorp clinched new business with premiums of £6.5bn (well up on the £2.4bn achieved in the first half of 2022). At the end of June PensCorp’s assets were close to £45bn. In March this year PensCorp forked out its first dividend of 7.5p a share. Reinet’s share of the payout was a not insubstantial £50m. The reported bids are intriguing, Johann with Reinet carryRupert ing the value of its stake in PensCorp at about €2.75bn. An offer for all or part of PensCorp by one or all of the three big investment firms will determine whether Reinet’s valuation of its PensCorp stake is realistic. Reinet’s PensCorp stake is worth about R55bn against the group’s JSE market value of about R85bn. Reinet’s stake in British American Tobacco is worth about R26bn at current prices. This means the investments in PensCorp and BAT represent about 95% of Reinet’s market capitalisation, with the array of private equity and other partnerships, worth about €1.2bn, given scant regard. Reinet’s cost of investment in PensCorp, for the record, is €1.315bn. If Reinet is indeed willing to let go of its stake in PensCorp, there would be a rather nifty value-unlocking opportunity. It would also be most interesting to see how the market reassesses Reinet sans PensCorp, which might recall the situation with the old Rembrandt offshoot Venfin after its stake in Vodacom was stripped out. Though I very much

doubt whether Reinet will be merged back into Remgro — or Richemont. A tricky situation Moving into deeper waters, Brimstone-controlled fishing group Sea Harvest could buy certain operations from the unlisted TerraSan Group. I’m quite surprised. I initially thought Sea Harvest might look at scaled-up abalone farming business Abagold. In any event, TerraSan has a sizeable pilchard and sardine canning business (under the Saldanha brand), an aquaculture operation and a marine feed business. Annual turnover is about R1.6bn. Presumably Sea Harvest is looking at all the fishing operations of TerraSan, at an inferred “market value” of about R800m based on the last trading price of its shares on an overthe-counter market. TerraSan earned 900c a share in financial 2022, which translates into bottom-line earnings of about R235m. TerraSan’s aquaculture interests will add bulk to Sea Harvest’s abalone offering, but it’s the group’s extensive pelagic operations that will be transformative to Sea Harvest. There might be a catch, though. Brimstone is also a major shareholder in fishing group Oceana, which has a sizeable fish canning enterprise in Lucky Star. Sea Harvest would be in direct competition with Oceana, leaving Brimstone in a rather tricky situation. Perhaps developments at Sea Harvest will hasten a Brimstone decision on Oceana. That said, it will be difficult for Brimstone to unbundle Oceana with a chunk of debt still sitting at centre. It won’t be an easy task to find a buyer for the stake in Oceana, either, with empowerment ownership considerations limiting the pool of possible buyers. x

December 21 - December 27, 2023

. financialmail.co.za

Market Cap — Market Capitalisation. YTD — Year to Date. TRI — Total Return Index. HEPS — Headline Earnings per Share.Trailing HEPS — HEPS at the time of the most recent annual results presentation. EST. forward HEPS — HEPS as estimated by analysis as at next annual results presentation. * — all companies quoted in rand. Div Yield — Dividend Yield as at most recent annual results. Forward Div Yield — Dividend yield as at next annual results. Three-year average RoE — three-year average Return on Equity. Forward RoE — Return on Equity as at next annual results.

jse top stocks COMPANY

CLOSING PRICE

MARKET CAP (Rm)

SHARE PRICE RETURN YTD (%)

(MONDAY) (c)

TRI RETURN YTD (%)

P:E

FORWARD P:E

TRAILING HEPS (*)

EST. FORWARD HEPS (*)

DIVIDEND YIELD (%)

FORWARD DIVIDEND YIELD (%)

3-YEAR AVERAGE RoE (%)

PUCSP

VIEW

PEG RATIO

BHP Group Ltd.

61565

3,120,570

16.88

23.57

13.53

11.91

4550.90

5169.08

5.11

4.91

40.50

69927.83

BUY

0.47

Prosus N.V.

59358

2,394,789

9.85

10.15

43.59

18.33

1361.85

3238.14

0.24

0.49

25.46

BUY

-8.49

Anheuser-Busch InBev SA/NV

115600

2,008,200

12.91

20.04

19.09

5768.98

6057.09

1.31

2.22

6.51

121373.27

BUY

0.33

Compagnie Financière Richemont SA

256473

1,378,753

14.93

18.43

18.63

17.32

13769.23

14808.22

2.06

2.27

6.42

275825.83

BUY

0.51

British American Tobacco plc

54650

1,342,700

-18.93

-13.56

6.75

6.06

8100.54

9017.34

9.50

10.56

9.94

60835.14

BUY

-1.47 0.09

Glencore plc

10841

1,325,918

-4.94

4.52

6.51

9.49

1665.28

1142.04

7.53

7.76

12.27

7434.70

BUY

Naspers Ltd.

329204

605,934

16.56

16.86

40.70

16.63

8088.91

19796.88

0.27

0.29

25.70

BUY

1.71

Anglo American plc

43300

579,171

-34.72

-31.80

7.26

8.45

5967.49

5126.55

5.38

4.55

20.52

37198.17

BUY

0.21

FirstRand Ltd.

6929

388,681

11.54

18.58

10.57

9.65

655.30

718.27

5.54

6.09

18.04

7594.86

HOLD

0.93

Standard Bank Group Ltd.

19340

324,095

15.26

24.41

8.14

7.84

2375.50

2466.82

7.14

7.40

10.76

20083.51

BUY

0.79

Gold Fields Ltd.

29750

265,828

68.89

75.08

15.00

15.55

1983.03

1913.04

2.59

2.44

18.73

28699.99

HOLD

0.14

Anglo American Platinum Ltd.

87120

231,123

-38.86

-35.68

7.65

10.36

11386.00

8405.82

5.28

3.21

55.59

64317.14

HOLD

0.09

Capitec Bank Holdings Ltd.

188886

219,296

1.63

4.39

22.83

20.09

8272.00

9402.24

2.29

2.50

20.95

214694.23

HOLD

1.11

Vodacom Group Ltd.

10428

216,677

-15.01

-9.90

11.22

10.33

929.00

1009.23

6.09

6.77

19.75

11328.59

HOLD

15.74

MTN Group Ltd.

11110

209,342

-12.73

-10.46

9.34

9.81

1190.00

1132.81

2.97

3.02

17.70

10576.03

BUY

0.20

Kumba Iron Ore Ltd.

58245

187,599

18.31

29.62

11.63

10.52

5010.00

5538.91

6.68

7.83

53.06

64393.97

HOLD

0.54

South32 Ltd.

4022

182,167

-13.30

-10.50

10.01

11.03

401.60

364.78

3.75

4.37

6.91

BUY

0.02

Mondi plc

35146

170,653

20.78

26.82

8.36

12.82

4202.54

2741.42

4.03

2.61

17.98

22926.57

BUY

0.43

Shoprite Holdings Ltd.

25680

151,856

13.63

16.87

22.02

20.00

1166.20

1284.06

2.58

2.67

22.59

28275.21

HOLD

4.50

Sanlam Ltd.

6776

149,270

39.08

48.19

12.63

10.55

536.50

642.37

5.31

5.85

8.99

8113.18

HOLD

-5.99

AngloGold Ashanti plc

32904

138,112

-0.06

1.05

20.32

11.54

1619.26

2851.11

1.19

1.24

16.46

57935.58

BUY

0.10

Absa Group Ltd.

15441

138,101

-20.37

-14.16

6.35

5.77

2432.90

2674.87

8.65

9.34

10.90

16976.75

BUY

0.21

Bid Corporation Ltd.

40329

135,265

22.26

25.12

19.36

16.28

2082.90

2477.39

2.33

2.89

14.73

47967.11

HOLD

1.01

Sasol Ltd.

17687

112,956

-34.35

-29.68

3.29

3.25

5375.00

5445.71

9.61

11.35

11.04

BUY

0.05

Nedbank Group Ltd.

20371

99,432

-4.17

3.86

6.69

6.33

3043.00

3219.50

8.53

9.27

9.50

21552.54

BUY

0.40

Discovery Ltd.

13723

92,376

11.25

12.15

16.45

10.76

834.30

1275.47

0.80

1.08

8.38

20979.53

BUY

0.09

Reinet Investments SCA

44023

86,259

34.48

36.57

10.24

15.66

4299.00

2810.85

1.40

1.43

9.00

28783.96

BUY

0.19

Aspen Pharmacare Holdings Ltd.

19058

85,047

39.79

42.55

13.56

11.15

1405.40

1708.51

1.79

2.02

7.51

23168.40

BUY

8.41

Investec plc

12162

84,658

12.96

20.81

7.46

7.07

1631.11

1719.41

6.37

6.91

9.96

12820.40

BUY

0.26

The Bidvest Group Ltd.

24200

82,346

12.88

16.65

13.48

11.60

1794.80

2087.05

3.62

4.00

16.31

28140.56

BUY

0.60

Remgro Ltd.

15356

81,267

15.43

17.43

13.01

10.42

1180.00

1473.22

1.56

1.92

8.88

19171.84

HOLD

0.58

NEPI Rockcastle N.V.

12200

80,621

18.37

30.74

11.09

10.96

1100.28

1113.30

8.73

8.65

4.24

12344.42

BUY

0.32

Clicks Group Ltd.

31708

75,485

17.40

20.26

30.36

26.22

1044.50

1209.46

2.14

2.49

42.36

36715.64

HOLD

2.57

Impala Platinum Holdings Ltd.

8202

74,176

-61.52

-59.94

3.71

7.12

2211.00

1151.66

7.13

5.01

28.56

BUY

0.02 0.62

Pepkor Holdings Ltd.

1888

69,241

-5.60

-3.03

12.66

12.43

149.10

151.94

2.55

3.32

5.30

1923.94

Harmony Gold Mining Company Ltd.

11092

68,762

88.64

90.29

13.86

8.84

800.00

1254.76

0.68

1.33

9.02

17397.30

SELL

0.12

Woolworths Holdings Ltd.

6915

68,368

4.09

8.98

16.33

14.82

423.40

466.65

4.53

4.72

39.46

7621.41

HOLD

0.51

Sibanye Stillwater Ltd.

2405

68,075

-46.22

-43.58

5.50

6.59

437.00

364.90

7.28

3.92

35.24

2008.22

HOLD

-0.03

Exxaro Resources Ltd.

19320

67,486

-11.09

0.91

3.84

4.51

5033.00

4286.77

11.80

11.33

27.39

BUY

0.05

OUTsurance Group Ltd.

4324

66,304

37.10

42.27

23.18

19.51

186.50

221.58

3.12

3.16

70.30

5137.43

HOLD

0.48

Sha esbury Capital PLC

3132

61,173

42.36

46.06

-11.84

45.07

-264.46

69.49

2.33

-17.07

BUY

0.12

Old Mutual Ltd.

1211

58,018

15.77

24.26

7.04

7.06

172.00

171.60

6.85

6.92

6.31

1208.19

BUY

-1.90

Textainer Group Holdings Ltd.

90751

52,665

71.23

76.64

11.11

7.92

8170.31

11463.44

2.49

2.94

11.99

127329.14

BUY

0.15

Northam Platinum Holdings Ltd.

13225

52,403

-29.35

-25.12

5.48

6.65

2414.90

1989.79

4.54

4.49

30.12

10896.93

BUY

0.01

African Rainbow Minerals Ltd.

18326

41,173

-36.37

-27.24

4.00

4.81

4581.00

3812.15

14.19

10.30

25.13

BUY

0.18

Growthpoint Properties Ltd.

1157

39,694

-20.43

-10.86

7.73

7.77

149.61

148.84

11.24

11.00

4.98

1151.08

BUY

0.68 5.36

Mr Price Group Ltd.

14839

38,105

-6.64

-2.01

12.80

11.89

1159.60

1247.89

4.92

5.27

25.12

15968.86

BUY

Tiger Brands Ltd.

19928

35,936

-5.11

-0.28

11.49

11.15

1734.70

1787.88

4.97

5.43

15.46

20538.90

HOLD

2.97

Investec Ltd.

12092

35,705

12.48

20.40

7.41

7.31

1630.81

1654.83

6.41

9.71

12270.13

BUY

0.25

The Foschini Group Ltd.

10408

34,453

3.05

6.44

11.59

10.97

897.90

949.04

2.88

3.19

6.12

11000.73

BUY

0.18

Quilter plc

2343

32,898

23.32

30.44

39.53

12.64

59.27

185.30

4.63

8.28

7325.26

BUY

0.65

Bytes Technology Group plc

13723

32,864

74.04

79.23

33.54

409.15

1.33

84.61

0.89

Hammerson Plc

654

32,715

32.12

36.09

13.94

13.16

46.92

49.68

2.64

-25.35

692.49

HOLD

1.16

27829

32,040

8.52

20.89

10.75

12.26

2588.00

2270.32

4.82

9.39

15.32

24412.95

BUY

0.39 -0.24

Santam Ltd. MultiChoice Group Ltd.

7133

31,564

-39.16

-13.41

8.96

-532.00

796.31

7.92

5.64

7.98

HOLD

Primary Health Properties PLC

2352

31,434

-52.96

Momentum Metropolitan Holdings Ltd.

2082

29,163

21.05

37.49

6.70

6.21

310.70

335.50

5.76

11.35

2248.18

BUY

0.04

Truworths International Ltd.

7031

28,722

27.84

40.01

8.05

8.25

873.30

851.74

8.04

8.38

41.59

6857.44

HOLD

0.76

Sirius Real Estate Ltd.

2074

27,960

32.86

41.02

13.46

13.95

154.09

148.65

5.89

11.67

2000.83

BUY

0.53

AVI Ltd.

8131

27,552

8.11

15.76

14.69

13.14

553.60

618.72

5.93

7.84

36.61

9087.48

BUY

25.22

Redefine Properties Ltd.

378

26,658

-10.64

1.66

17.99

7.30

21.01

51.80

11.59

11.68

9.02

931.96

BUY

-0.86

Life Healthcare Group Holdings Ltd.

1814

26,618

7.46

10.02

20.57

14.47

88.20

125.35

2.43

2.95

6.79

2578.06

BUY

2.38

Ninety One plc

4179

26,019

8.66

16.90

10.57

395.31

7.09

55.98

1.14

Dis-Chem Pharmacies Ltd.

2889

24,848

0.49

2.10

27.67

23.58

104.40

122.50

1.44

1.79

25.24

3389.81

HOLD

3.07

Sappi Ltd.

4003

22,527

-18.70

-14.25

4.23

5.77

946.50

693.69

6.93

5.95

11.33

BUY

0.01

Montauk Renewables Inc.

15799

22,279

-17.63

86.30

183.07

5.30

0.19

financialmail.co.za

. December 21 - December 27, 2023

P:E — Price:Earnings ratio as at most recent annual results, Forward P:E — Price:Earnings ratio as at next annual results. View — Consensus Buy/Hold/ Sell recommendations. PEG Ratio — Price:Earnings to Growth ratio as at most recent annual results. PUCSP — Potential upside from current share price (1 year target price). ¿ ¿ ! ! ! ! !! ! ¿ ! " ! !

jse top stocks COMPANY

CLOSING PRICE

MARKET CAP (Rm)

SHARE PRICE RETURN YTD (%)

(MONDAY) (c)

TRI RETURN YTD (%)

P:E

FORWARD P:E

TRAILING HEPS (*)

EST. FORWARD HEPS (*)

DIVIDEND YIELD (%)

FORWARD DIVIDEND YIELD (%)

3-YEAR AVERAGE RoE (%)

PUCSP

VIEW

PEG RATIO

Sasol Ltd.

13500

21,375

-18.18

-9.49

5375.00

12.59

11.04

The SPAR Group Ltd.

11066

21,313

-2.50

18.24

9.69

606.60

1142.36

2.03

2.70

17.62

20839.78

BUY

-3.27 0.02

Thungela Resources Ltd.

14607

20,522

-49.04

-32.79

1.70

3.78

8605.00

3863.87

34.23

11.38

53.58

SELL

PSG Financial Services Ltd.

1510

19,377

24.69

28.24

18.99

18.76

79.50

80.50

2.55

2.78

21.12

1528.99

BUY

1.63

Netcare Ltd.

1335

19,212

-7.93

-3.96

13.22

9.95

101.00

134.22

4.87

6.28

9.24

1774.08

BUY

0.03

Hosken Consolidated Investments Ltd.

19771

16,928

26.33

10.34

1911.62

0.25

9.01

0.41

Motus Holdings Ltd.

9449

16,848

-14.63

-7.69

4.62

4.67

2046.00

2024.49

7.51

7.91

20.19

BUY

0.08

Fortress Real Estate Investments Ltd.

1345

16,098

27.97

14.78

13.45

90.99

99.98

8.92

8.47

1477.89

BUY

0.14

Resilient REIT Ltd.

4292

15,675

-20.15

-12.32

7.31

10.63

587.07

403.80

9.49

9.45

13.45

2952.13

BUY

0.10

Alphamin Resources Corp.

1184

15,082

17.23

24.89

10.40

113.90

3.41

16.54

0.11

Italtile Ltd.

1134

14,988

-16.62

-13.16

8.57

7.90

132.30

143.50

4.67

5.11

25.48

1230.00

BUY

0.75 -3.16

Vukile Property Fund Ltd.

1425

14,766

7.39

13.06

9.13

9.50

156.15

150.03

8.22

9.09

7.47

1369.18

BUY

Karooooo Ltd.

46500

14,392

16.25

20.71

23.16

16.87

2008.00

2756.88

3.46

27.78

63842.03

BUY

1.97

Barloworld Ltd.

7533

14,286

-11.12

-1.24

6.51

7.08

1156.30

1063.90

6.64

5.38

14.24

6931.02

HOLD

0.04 -214.71

Telkom SA SOC Ltd.

2710

13,852

-9.73

-404.48

6.68

-6.70

405.55

3.87

-8.60

HOLD

ADvTECH Ltd.

2468

13,710

35.75

40.62

15.16

13.94

162.80

177.00

2.71

3.28

14.80

2683.27

BUY

0.90

Lighthouse Properties plc

723

13,234

6.32

16.38

23.05

31.36

7.79

-28.46

-0.51

DRDGOLD Ltd.

1496

12,934

22.22

28.79

10.09

8.98

148.20

166.62

5.68

4.88

23.65

1681.89

SELL

0.04

Tsogo Sun Ltd.

1221

12,730

4.27

11.60

6.79

7.18

179.80

170.00

7.13

7.94

28.00

1154.45

BUY

0.01

Ninety One Ltd.

4185

11,917

10.57

18.94

10.59

395.31

7.07

55.98

1.14

MAS P.L.C.

1650

11,816

-19.71

-16.29

7.48

8.26

220.47

199.83

5.14

12.58

10.96

1495.56

BUY

0.09

Hyprop Investments Ltd.

3027

11,515

-10.02

0.49

7.68

8.11

393.90

373.39

9.89

8.89

2.90

HOLD

2.26

Globe Trade Centre S.A.

2000

11,485

0.00

5.19 -1129.94

12.23

-1.77

163.60

5.19

-0.42

SELL

34.24

AECI Ltd.

10544

11,126

20.37

29.29

8.01

7.43

1317.00

1418.79

6.45

5.68

6.64

11358.93

BUY

1.06

Reunert Ltd.

5906

10,924

13.34

19.84

9.81

7.56

602.00

781.00

5.62

11.87

7662.10

BUY

0.20

. financialmail.co.za

THINK BACK. THINK AHEAD. Now rethink insurance. For all insurance solutions related to the commercial, agricultural, engineering and sectional title sector contact your broker, or call Western: Western Cape +27 21 914 0290, Gauteng +27 12 523 0900 or visit www.westnat.com Western National Insurance Company Ltd, affiliates of PSG Financial Services Ltd, a licensed controlling company, are authorised financial services providers. (FAIS: Juristic Reps under FSP 9465)

December 21 - December 27, 2023

economic indicators AFRICA TOP STOCKS (EXCL SA) Company

A ijariwafa Bank Itissalat Al-Maghrib Commercial Int Bank Dangote Cement MTN Nigeria BCP Airtel Africa LafargeHolcim Maroc BUA Foods BUA Cement

Country

Market Cap ($ Millions)

Price

Total Return Ytd

Morocco Morocco Egypt Nigeria Nigeria Morocco Nigeria Morocco Nigeria Nigeria

9 906.68 8 899.54 7 447.25 6 750.42 6 509.79 5 526.80 5 509.26 4 538.07 4 534.06 4 154.11

468.15 102.80 76.25 318.00 247.40 274.05 1 842.00 1 959.00 180.50 92.00

18.88 7.84 83.82 21.84 14.19 19.09 12.66 45.19 177.69 -5.88

DIVIDENDS & DISTRIBUTIONS F - Final S - Special I - Interim

Company

Amount (ZARc)

Trade by

Payable

30.48 20.00 300.00 4.25 35.00 150.00 35.77

Dec 22 Jan 2 Jan 2 Jan 2 Jan 2 Jan 2 Jan 9

Jan 25 Jan 8 Jan 8 Jan 8 Jan 8 Jan 8 Jan 26

277.37

Jan 9

Jan 15

SERE F AFORBES I Barloworld Ltd. F CAPPREC I I MAHUBE The Foschini Group Ltd. I Marshall Monteagle I PLC Sappi Ltd. F

Date

Type

Place

Premier Group Ltd.

Dec 14

SHM

Electronic participation

AEEI

Dec 28

SHM

Electronic participation

Jubilee Metals Group Plc

Jan 3

SHM

London

FORTRESSA

Jan 19

SHM

Hybrid

Purple Group Ltd.

Jan 19

AGM

Electronic participation

Sasol Ltd.

Jan 19

AGM

Electronic participation

AH-Vest Ltd.

Jan 24

AGM

Johannesburg

The information in these columns are provided by ProfileData.

financialmail.co.za

Inflation (% change y/y) Consumer price index Producer price index Credit Aggregates (% change y/y) Claims on the domestic private sector Total loans and advances Total domestic credit extension Industry (% change y/y) New passenger car sales New commercial vehicle sales Retail sales Wholesale sales Manufacturing production Mining production Mineral sales Trade (Rbn) Imports Exports Trade balance Gold & Forex Reserves ($bn) Gold reserves SDR holdings Forex reserves Gross reserves Net reserves (International Liquidity Position)

INTEREST RATES

Latest

Month ago

Nov Oct

5.50 5.80

5.90 5.10

Oct Oct Oct

3.94 4.68 7.36

4.60 5.29 7.38

Nov Nov Sep Sep Sep Sep Sep

-12.51 -15.23 0.90 -6.70 -4.30 -1.90 -20.20

-3.45 1.06 -0.30 1.50 1.50 -2.00 -16.50

Oct Oct Oct

183.03 170.37 -12.66

161.52 173.50 11.97

Nov Nov Nov Nov Nov

8.22 6.25 47.25 61.72 56.32

8.10 6.16 46.74 60.96 55.51

EXCHANGE RATES

SHAREHOLDER MEETINGS Company

ECONOMIC INDICATORS

Dec 15 Month ago

Year ago 12-mth low 12-mth high

Developed Markets — Rand per foreign currency unit US dollar 18.31 18.36 17.29 Euro 19.93 20.03 18.36 UK pound 23.21 22.88 21.32 Japan yen (100) 7.77 8.15 7.91 Canada dollar 13.68 13.37 12.74 Switzerland franc 21.04 20.73 18.60 Australia dollar 12.27 11.95 11.69 Emerging Markets — Foreign currency unit per rand Brazil real 0.27 0.27 0.31 China yuan 0.39 0.39 0.40 India rupee 4.53 4.54 4.69 Russia ruble 4.93 4.88 3.73 0.26 0.26 0.26 Malaysia ringgit 1.91 1.91 2.02 Thailand baht 0.73 0.73 0.75 Botswana pula

. December 21 - December 27, 2023

14.48 15.68 18.83 7.02 11.44 15.49 10.75

19.78 21.21 24.65 8.73 14.58 21.91 12.94

0.25 0.36 4.17 3.21 0.23 1.76 0.70

0.34 0.44 5.26 9.27 0.29 2.32 0.79

Short-term interest rates (%) Prime NCD* Repo Jibar* SABOR†

Dec 15

Month ago

Year ago

11.75 8.38 8.25 8.39 8.22

11.75 8.36 8.25 8.37 8.19

10.50 7.23 7.00 7.26 6.95

Dec 15

Month ago

Year ago

8.62 10.28 11.62 12.10

8.85 10.62 11.72 12.03

8.72 10.58 11.22 11.34

* 3months † Overnight rate

Bond yields (%) R186 R213 R209 R214

COMMODITY PRICES Dec 15 Week ago Year ago 12-mth low 12-mth high

Precious metals ($/oz) Gold 2,020 Platinum 945 Palladium 1,177 24.00 Silver Base Metals ($/t) Aluminium 2,206 Copper 8,455 Nickel 16,923 Lead 2,046 Tin 24,979 Zinc 2,536 135.00 Iron Ore Energy Brent crude (US$/bbl) 77.00 Richards Bay Coal (US$/t) 108.00 Agriculture (R/t) White maize 4,479 Yellow maize 4,179 Wheat 5,874 Sunflower 9,232 Soya 9,181

2,005 921 947 23.00

1,778 1,013 1,881 23.00

1,622 836 945 18.00

2,072 1,159 3,371 26.00

2,092 8,366 16,608 1,985 24,339 2,384 136.00

2,345 8,253 28,103 2,147 23,636 3,181 111.00

2,070 7,160 15,843 1,738 17,653 2,230 80.00

3,878 10,702 48,201 2,461 48,865 4,563 162.00

76.00 82.00 108.00 236.00

71.00 94.00

138.00 453.00

4,397 4,100 5,871 9,310 9,120

3,387 3,443 5,798 8,048 7,167

5,461 5,307 8,409 12,824 11,113

5,075 4,856 6,731 11,600 10,996

123RF/elenashow/triken

life A look at how to spend your downtime — from music, to sport, books, theatre and the screen THEATRE

HITTING THE HIGH NOTES South Africa outperforms when it comes to putting opera singers on the world stage. It’s a thriving space, working hard to broaden its appeal and ensure inclusive and diverse audiences Adele Shevel

● “We think we have a good rugby team, which we do, but we also have singing voices that are just out of this world. As proud of we are of our amazing rugby players, we should be proud of our amazing singers — it’s

something the nation can and should really get behind.” That’s the view of Alex Gabriel, MD of Cape Town Opera. “It feels to me like South Africa’s singing talent per capita is probably among the best in the world,” he tells the FM. He believes the country must be among the top five

Top talent: Levy Sekgapane opposite Cape Town Opera Soloist Brittany Smith in The Pearl Fishers Kim Stevens

December 21 - December 27, 2023

. financialmail.co.za

53 53

life theatre ????? when it comes to opera exports. He’s referring not just to the likes of Pretty Yende and Levy Sekgapane, who headline opera productions on some of the most illustrious opera stages in the world. They are just two of the talented local opera singers punching above their weight globally. Then there’s Khanya Mtala, a 17-year-old who took up classical singing in the past year. From Philippi, he is one of 13 singers selected by Cape Town Opera’s Foundation Studio — a pioneering initiative helping a new generation thrive in what was once seen as a “white space”, according to The Guardian. Baritone Sakhiwe Mkosana, from Ezibeleni, Komani, is enrolled in a programme for young singing talent in Frankfurt, Germany, AFP reports. And

Siphokazi Molteno is a 31-yearold mezzo-soprano from Gqeberha and alumna of Cape Town Opera’s Judith Neilson Young Artist Programme, now based in New York. “I would listen to [opera] when I was alone. This deeper opera world, I knew it was something special, so precious,” she told the news service. Then there’s Luvo Maranti, who didn’t read music and the only thing he knew about opera was the name Luciano Pavarotti, according to AFP. He gave up a job in human resources to pursue his opera dream, and sang in the international Operalia competition. Says Gabriel: “The thing which is really relevant for me is that, unlike a world-class athlete or ballet dancer, the voice only really develops in your 20s or 30s. So if we find somebody in

PRETTY YENDE

Gallo Images/AFP/Stephane De Sakutin

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Born in Piet Retief (now eMkhondo), Pretty Yende has had a meteoric rise to success, becoming the first African to perform a solo at Westminster Abbey for the coronation of a British monarch (King Charles III). In an interview with CNN, the soprano said her biggest challenge was always being the different one in the room. “When I was the first black in the Academia of La Scala it was a bit uncomfortable,” she said. “Sometimes I would enter the rehearsal room and I could see in the room looks like ‘Why are you here?’ And I would just smile. But once I started making music, all of us in that room agreed that I’m not here by mistake.” Yende made her debut in 2013 at the Metropolitan Opera House in New York, going on to perform at major opera houses in Milan, Paris and London. x

. December 21 - December 27, 2023

LEVY SEKGAPANE Born in Kroonstad, Levy Sekgapane is said to be one of the leading Rossini tenors of our time. According to Forbes magazine, he began singing in youth choirs in South Africa and studied at the South African College of Music at the University of Cape Town. He has performed in Berlin, Rome, Copenhagen, Munich and the Paris Opera House, and in 2017 won first prize in the prestigious Operalia competition. x a rural area who has talent, they can literally become world famous and change their lives. The fact that you didn’t start when you were five has no bearing on whether you will be successful. Obviously you have to have the willpower and things have to come together and you have to learn to read music … but that can all be learnt.” It means there’s a wealth of programmes to nurture talent. Vetta Wise, a former chorus master at Cape Town Opera and choral conductor and singing specialist in the UK, says there is outstanding operatic singing training, and imaginative programmes at tertiary level in South Africa. There is a culture of choirs in townships and the workplace, “and there are some incredible youth choirs: the Drakensberg Boys Choir, Ndlovu Youth Choir, Tygerberg Children’s Choir and several others,” she tells the FM. Cape Town Opera’s Foundational Studio programme aims to train the next generation of South African soloists. Thirteen teenagers are chosen from among 100 applicants from underresourced high schools who share one aspiration: “To eventually sing at the world’s most distinguished opera houses,” The Guardian reports.

Kartal Karagedik

The programme has been so successful that it won the award in the equal opportunities & impact category at the 2022 International Opera Awards in Madrid. There are the international competitions too. Last month, Operalia, a leading competition started by legendary Spanish tenor and conductor Plácido Domingo, was held in Cape Town for the first time in its 30-year history. Of the 34 contestants, five were South African, as are two past winners of the competition (Yende and Sekgapane). Then there’s the 2023 BBC Cardiff Singer of the World competition — one of the biggest singing competitions in the world, says Gabriel. “Two of the five finalists this year were South African,” he says, referring to Molteno and soprano Nombulelo Yende, Pretty Yende’s sister. “That’s extraordinary.” Finding the money But things aren’t always easy on the local scene. “Due to opera being extremely labour intensive, from the individual cast members to the 50-plus-piece orchestra, to sets and costumes that have to be handmade, the simple fact is that, to keep ticket prices on planet

Finding work: Walking the docks is one way of landing a job on a yacht

earth … the art form needs to be funded. It simply can’t exist otherwise,” says Gabriel. As it is, ticket sales in South Africa are a fraction of what you pay in many of the premier overseas opera houses. “Our total budget last year was $1.2m. That’s everything, all our salaries, sets, costumes, orchestra, the works. That’s probably the coffee budget of the Metropolitan Opera,” he says. It means most funding for Cape Opera comes from local government, patrons, lotteries and, in particular, from the Judith Neilsen Foundation, founded by an ex-Zimbabwean who lives in Sydney. “We proudly run on a shoestring, but when you come to the show you don’t get that feeling. We are not trying to be extravagant, but the product looks extravagant because you want to give people that amazing experience,” says Gabriel. Because opera is often considered an unapproachable art form, Cape Town Opera works hard to show its relevance, “from providing an aspirational platform for our world-class South African singers to providing employment in the theatre and arts industry”, he says. “People forget that opera has all the art forms in it. You’ve got artists and set designers and costume designers; you have theatre and music and sometimes dance. We are helping to keep the whole theatre ecosystem alive with the jobs we create.” It’s also about growing audiences. “I’m a firm believer that if the product is good, people will come,” says Gabriel. Still, the organisation has made sure to broaden its appeal. For example, it provides the audience with English and Xhosa translations of the original score, to help them understand the story. The company also takes productions and educational pro-

grammes around the country. “There’s nothing elitist about our approach nor about the product, we’re finding when we get to Joburg the demographic of the audience is as representative as you could dream of. Young people going on date nights, the more traditional audience, a lovely mix. Cape Town is not there yet, but it is changing.” Artscape, Cape Town’s opera house, has also made it a priority to improve and broaden the appeal of the art form. Those driving the initiative see opera as a unifier in the country, with speakers of the 11 official languages all singing in the same language, and coming from a strong tradition of choral music. Wise talks of South Africa’s “deeply entrenched culture of singing in the family … Music is around like a second language. It’s not like something separate from life.” As she tells it, postapartheid opportunities have meant that where in previous years most singers in South Africa had to leave the country to make a career, this is no longer the case. Still, she adds, “every time I go to the opera in Europe, the UK and the US and I see South African names and people, it’s just absolutely wonderful”. x

TRAVEL

SETTING SAIL More and more South Africans are taking to working on yachts in the Mediterranean and Caribbean. It sounds like a fabulous way to earn money, but there are things you should know before hitting the seas Melody Emmett

Alex Gabriel

● Each year, swarms of contenders descend on destinations around the world in the hope of landing a job on a yacht. It’s become something like the new gap year: in the past young people could get a visa for a two-year working holiday in the UK, says Maxine Oakley, co-head of The Stewardess Training Company; today, young people choose yachting. It’s not just young people either. “I have people up to

the age of 45 who are throwing in the towel. I have had doctors, lawyers, dentists, accountants, chartered accountants, IT experts ... basically you name a profession and I can tell you someone who has decided to work in the yachting industry,” says Super Yachting South Africa founder Jason Hunter. It’s certainly an industry on the up. The current cost of luxury yachts for charter ranges from $189,000 to $960,000 a week. Projected growth for the global charter market for 2024-2032 is $55.69bn. And the order market for sales is higher than it has ever been — in some cases manufacturers have indicated they can’t guarantee delivery until 2025-2027. There’s a pretty penny to be made too, with monthly pay amounting to €2,500 (about R52,000) for a junior steward, for example; a chief steward earns somewhere between €4,000 and €8,000. But not everyone is cut out for it. A South African yachting pro with a history of training deckhands for superyachts is concerned about young South Africans entering the industry prematurely. “I’m not thrilled at the influx of young

December 21 - December 27, 2023

. financialmail.co.za

travel life ????? students getting into the industry because they are hurting the chances of others with their behaviour,” he tells the FM on condition of anonymity. “Some are too young; they have no respect for the job because they see it as a financial trampoline and not a well-earned career. They reveal themselves as holidaymakers and not back very quickly,” she says. career chasers.” The superyacht training Saskia da Costa says offered by Oakley’s company something similar: young takes three weeks and includes people, especially those compulsory training that straight out of school, who beconsists of marine firefighting lieve they are going on an adand first aid, and courses called venture and have no idea of the personal designated security protocols and no respect for the ethos of the industry are destined for disappointment. Jason Hunter Da Costa is on a mission to assist newbies to the yachting industry. A graduate with a few years’ work experience, she joined dock walkers from around the world in the South of France last year. She has now consolidated her experience into an e-guide accessible by cellphone or online. “From duties and personal visas, to routes to accommodasafety & social tion to what you can earn; I responsibility, which hope to paint a picture of what is about surviving to expect; of the dos and at sea. don’ts. I think the guide will Other courses give youngsters and their parinclude food and ents a sense of security,” she health, which is oblitells the FM. gatory for stewards working with chefs Training and experience and serving food to There is more competition for guests. The module also covers the work than ever before, service and housekeeping. It is which means finding the right additionally recommended that mix of training and experience. stewards learn how to drive a Basic training is essential — tender boat, which according to but it doesn’t come cheap. Da Oakley significantly enhances Costa, for one, spent R25,000 employment possibilities. And on her basic training and R11,000 on flights to Europe. “It additional upskilling in, say, child care, or heath and beauty is quite expensive to start off is a bonus. but once you land up on a Across the board, however, yacht it is definitely worth it beyachting experts the FM cancause you make that money 56 54

financialmail.co.za

.. December December 21 21 -- December December 27, 27, 2023 2023

Super yachts: The docks at Cannes, France

vassed recommend that wannabe yachties gain a few years’ experience. Da Costa, for example, advises greenies to get work on a yacht in Cape Town before going abroad. “You definitely need your basic training and mandatory training, but having experience is more important than being overqualified. They look for people who have worked on yachts or people who have previous experience in hospitality and can just slot in,” she says. And, she adds, day work, which involves doing small jobs that the crew don’t have time for, is a good way to gain experience.

Saskia da Costa

Hunter, for his part, tells the FM there’s a danger of overinvesting in expensive training; there is, after all, no shortage of wannabes with qualifications. He emphasises “old school work ethic, good manners, respect, and punctuality”. Where and when to go Europe holds the highest charter market and is more ac-

cessible to South Africans than the Caribbean, which holds only 8% of the global charter market. It’s also easier to get a visa for the Mediterranean, which requires a Schengen visa. “For the Caribbean they require a [US] B1B2 tourist visa as well as sometimes a Schengen ... It is a lot trickier to get the American visa,” Oakley says. The Mediterranean yachting season, prolonged because of global warming, extends from the beginning of May to October, making January to April a popular time for training — and recruiting. August to November is popular for trainees wanting to get to the Fort Lauderdale/Miami area for the hiring period for the Caribbean season. Still, the timing is difficult to pin down. “If you go early in the season you may be able to land a job, but ... you may find that they have their crew and are not yet ready to bring on new crew or ‘greenies’ or day workers,” says Da Costa. To get a foot in the door you can sign up with agencies and apply for jobs online, and at the same time walk the docks. “When you have decided to start dock walking, you want to try to cover as much ground as possible and to plan your route before time. I went to Cannes and then to Antibes and Nice and Monaco. I would catch a train and then walk the docks,” says Da Costa, adding that the best time is 8am-9am, and in the late afternoon or early evening — and be prepared to walk 15,000-25,000 steps a day. “Persistence” she adds, “is key.” x

crossword Cryptic No 254 ACROSS 7 Bit of news about wine (6) 8 Put money into underwear (6) 10 Genuine because half-real (7) 11 Exhausted, nobody went out (3,2) 12 He has one out before fifty (4) 13 He gives editor the victory (5) 17 The first doctor to be a non-worker? (5) 18 Expensive letter-opener (4) 22 Applaud about 1000 — it holds things together (5) 23 Entails being outstanding (7) 24 Plunders for guns (6) 25 Graduate’s backward boy had great strength (6)

DOWN 1 A gift for the moment? (7) 2 Dog in lapse (7) 3 Short fibre (5) 4 Oration in Canada (7) 5 Prisoner’s room has nothing in the way of an instrument (5) 6 Try to get a seat, paradoxically (5) 9 State of being prepared for literacy? (9) 14 Support the wrong forecaster (7) 15 One goes into it backwards (7) 16 Set of bars that irritate (7)

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19 Music for twenty instruments? (5) 20 Saw if stray children appeared (5) 21 It’s obvious the French get in the vehicle (5)

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December 21 - December 27, 2023

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backstory Innocent Nkata MD: Sesame Workshop South Africa

What’s your one top tip for doing a deal? Build a good relationship and be a good listener, not a big talker. What was your first job? My first job was as a documentalist-quality controller at Plan International. I had to document and archive all the work the company had done from the previous years. How much was your first pay cheque, and how did you spend it? It dates back to 1996 and was just over $100. I gave the majority of the money to my mother as a tribute to what she had done to get me to where I was, including sending me to school on a meagre income from selling fruit and vegetables at the local market. What is the one thing you wish somebody had told you when you were starting out? The art of negotiation. After accepting my first job offer, I later discovered I was paid less than the janitor and ironically, I was one of the top-qualified people in the office. Understanding your worth and being assertive are important in positioning yourself for better compensation.

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If you could fix only one thing in South Africa, what would it be? I would focus on early childhood education. I am a strong believer in Nelson Mandela’s wise words that education is the most powerful weapon to change o n e’s life. My mother ingrained this in me from an early age. She would always say: “D o n’t play with your school, it is your future.” What’s the most interesting thing about you that people don’t know? When I was younger, I earned extra income writing opinion pieces and short stories for weekly newspapers and magazines. I am also an avid drama performer, one of my greatest feats was memorising all my lines as Macbeth in 48 hours — what a rush. What’s the worst investment mistake you’ve made? When I started an investment portfolio on the JSE in 2006/2007. It was going well and that gave me confidence to shift into day trading. Then it all took a bad turn. I watched my portfolio take a nose dive during the global financial crisis. I lost R20,000 in one day, because I abandoned my investment strategy.

. December 21 - December 27, 2023

What’s the best investment you’ve ever made? And how much of it was due to luck? My children’s education. What’s the best book you’ve read recently and why did you like it? How I Built This, by Guy Raz. The book is a spin-off from the NPR podcast of the same name (it’s one of my top daily listens) where Guy has conversations with innovators, entrepreneurs and idealists. What is the hardest life lesson you’ve learnt? I was dismissed from school in A level — fo r activism. It came at a huge cost. They had given me a chance to renounce my views and I chose to stand by my cause. This meant I had to finish my A levels privately. Looking back, I may have done things differently and been more strategic in fighting the system from the inside. If you were President Cyril Ramaphosa, what would you change, or do, tomorrow? I would ensure that the biggest chunk of the education budget goes to early childhood development.

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