Slasher's coffee beans

Jozi, Jozi. A beautiful weekend on the weather front, the cricket, unless you are a crowing pom, then I don’t want to talk about it. OK, got that out of the way. Friday was a sell down day, and that could all be attributed to weaker a resources complex, top stocks dragged the all share down, the Jozi all share ended at 24944, down 418 points. Ouch.

MTN and Bharti are near a compromise says the Wall Street Journal, citing their favourite folks, people familiar with the situation. The article suggests that a cash deal is close, with the idea of dual listing structure being parked for the time being, as that would require Indian law to be rewritten.

Over the weekend in Pittsburgh, Indian PM Manmohan Singh said he supported the deal. Yes, like I support the Proteas, I really do. One that seems to have gone unnoticed was that last week Indian regulators last week announced that companies taking more than 15 percent stakes in another, would be required to make an open offer for another 20 percent. 35 in total, remember than MTN would want to see their stake at 36 percent of Bharti.

But the article goes on to suggest that the deal might see some nimble footwork that the deal might happen sooner, but perhaps another roll over of the time is to be expected. The FT over the weekend suggested that Indian PM, Manmohan Singh had a word with our president Jacob Zuma over the weekend, raising issues that too many rumblings from government concerned him. Me too, with you on that one PM Singh.

Don’t like Jacob Zuma’s visit to Venezuela. Don’t like to be friendly with people who have no regard for business and look to nationalize key assets of national importance. Sorry, those stars on the flag look like an upside down smile, and this visit is the same, at least to me.

Inflation runs quite hot in Venezuela, 20 odd percent (historically about the norm), the economy is largely dominated by the oil and gas sector, accounting for around one third of the economy and the bulk of exports. According to Wiki: World Economic Forum ranked Venezuela as 82 out of 102 countries on a measure of how favourable investment is for financial institutions.

Here is the part I dislike, a lot, 400 basic food stuffs prices are controlled. This in an effort to keep inflation under control and protect the impoverished, politics no doubt played a key part in these decisions. Funnily enough the Gini coefficient, a measure of the wealth gap, is quite high in Venezuela, much like here. Just for the record, don’t like mixing with Venezuela as it stands right now.

The most recent nationalization was that of the coffee industry, that is still coming. And the attempt to stem inflation by nationalizing, not working. Because government is not better than business, think about it carefully, from a productivity and accountability point of view. That is all that I have to say about that. Check out a recent Forbes piece.

And then Standard Bank announcing that they have completed their tie up with that Russian investment bank, Troika Dialog, one of the top dogs in the Russian space. In short Standard Bank have injected their operations into Troika, plus there is a cash element, in return for a one third stake in the investment bank. Standard Bank certainly are positioning themselves as an emerging market bank over the last decade.

So it seems that Angela Merkel is on track to win a second term in Germany, whilst most world leaders were in the G20 afterglow, Merkel had a fight on her hands. I was also thinking about the days that elections take place. On a Sunday.

Don’t declare a public holiday like our local tradition, but rather every four years, if you want to exercise your democratic right, then do so. Japan also had elections on a weekend, also a Sunday. In the US, it is not a public holiday, but rather go and take your time to vote, lunch hour, after work, before work. These are productive economies with much lower unemployment than ourselves, but choose to vote on a working day, or a weekend.

A lesson indeed, because we should be looking to eke out every last working minute in order to strengthen the economy, not take a holiday in the middle of the week to exercise a democratic right. Anyhow, back to the German elections, Angela Merkel is set to win a second term, no mean feat having driven her way through an economic tornado.

The outcome will be that the alliance between her party, the Christian Democratic Union and the Free Democratic Party, better known as the FDP, as well as the CDU sister party, the Christian Social Union of Bavaria, have enough to see them through another four year. My favourite is the German Pirate party, I kid you not, who got 46 thousand votes. They have less to do with pirates than with protection of information dissemination as one of their principles, but I like the name.

So the outcome suggests that this is good for business, modest tax cuts are on the cards and labour reforms. Excellent, moving in the right direction there is my guess. Plus, delays on some financial reforms are set now to take centre stage. What do you think when you hear the word Germany?

There are a couple of really good pictures that I wanted to share, have a look, they are posted by a conservationist that I follow on Twitter, her name is Paula Kahumbu. Check out these two pictures that she posted: Corruption and NSE. Clearly the second one is not the exchange, but the first one needs one to read the commentary lower down.

New York, New York. Drifting wood. Err, drift wood. Tech and transportation dragging on the overall market, healthcare doing alright. Session end the Dow Jones Industrial Average closed at 9665, down 42 points. The nerds of NASDAQ fell 16 points to 2090. The broader market S&P 500 lost 6 and a bit points to 1044.

Righto, the oil market is looking soft, same old concerns, lower demand worries that should see prices lower. I don’t know, it trades where it trades. 65.76 Dollars per barrel. The copper price is also much lower at 2.67 Dollars per pound. The gold price has also sold off to 990 Dollars per fine ounce. Lastly, the platinum price has also sold off to 1275 Dollars per fine ounce.

The Rand is trading at 7.45 to the US Dollar, 10.90 to the Euro and lastly 11.83 to the Pound Sterling. Expect a sell off to start with.

Best wishes

Sasha Naryshkine
sasha@vestact.com
011 022 5440