SORRY

SORRY

/in , , /by

Earlier in the year I stuck my neck out and said that Joburg would show an 8% notional increase in house prices and implied it would be hot property news. Not so, I’m afraid. Sorry. Then, I stuck my neck out [with the IMF as I’ve said in a previous email], and said we’d grow at 1.7%. I was only out by 1, but that’s the 1 in the front. Drat! Another Sorry is due. So before you stop reading and call me a Wuzz, give me a break.

You see, we’re not in technical recession, the first time I heard President Ramaphosa (CR) say that I thought he was taking advantage of the latest weed laws, but then, Roelof Botha, ex-RMB, who I have always considered at the top economist in the country, was reported having the same stance. So maybe, CR has been sticking to Johnny Blue on his Fresnaye property’s stoep. So without boring you with the details, the numbers are skewed by Agriculture in the main, and what remains is some other drought-stricken technicality. All of that said, we should pop out of technical recession fairly soon and recover a tiny growth this year.

Now let’s see why Growth with a capital “G” is on the cards. 

Firstly, the SARB held rates recently and that is good news for our ailing economy. Remember, they walk a tightrope, because the Bond investors love a big differential between the Bond yield and their own country’s interest yields, adjusted for inflation and the Rand volatility. In simple terms, if you don’t raise the rates and the risk of doing business increases for whatever reason, then money flows out of the country. Big risk, but well taken given the current slowdown in our economy. In fact, a complementary decision to my next point.

So, secondly, our President has announced amazing benefits to our economy today. I am so excited even though we know we need far more. On the lighter side, #paybackthemoney would provide more than enough to stimulate our economy; just seeing someone go to jail would really lift our spirits. So again, I have no desire to go through all the details and, if truth be told, I have no idea where we find the money, but a stimulus of R50bn to “stabilize Education and Health Care” is seriously welcome and R400bn to really stimulate the economy is a mind-blow. So much stimulation in one day could be bad for one’s heart; but, thank you, President Cyril and your 10-person Advisory Board, you’re going to announce in the next few days.

We’ll cover a tiny bit of the details, the rest being your homework, but seriously, I cannot tell you how amazing it is to see a President, obviously trained by Pravin Gordhan to read teleprompters, reading a huge economic breakthrough and flawlessly enunciating Four Hundred Billion Rand, that’s R400000000000. So glad the author of 400…Rand…million, billion, ten…he, he, is no more.

We need stimulation. Money flows of private citizens offshore feel to me to be at record highs. People are leaving all around me – kids who comprise our future being snapped up for their artisan, IT and teaching skills. Out there are countries building countries on the back of our young, competent families and I feel like putting my finger down my throat when I think of the loss just when we need the skills the most to rebuild this beautiful, tortured nation, but at least we have a President who sees the issue and has the gravitas and presence to rectify the problem, albeit, over a very long period.

Healthcare needs stabilization. The Minister of Health should have declared a crisis a long time ago, but at least, finally has some money to spend. Heaven knows we need it well spent on priorities that benefit our people. Please don’t steal our hard-earned cash and don’t turn a blind eye to those who would! For education, desks and toilets would be really helpful. Make the former out of recycled plastic and achieve a double whammy. Then, for the latter, build toilets with septic tanks where you can’t easily access a sewerage pipe. For goodness sake, [I heard a guy on CapeTalk saying the sewerage pipe was 4 kms away so they could not give a school a flushing toilet.] Really??!! I used a septic tank in Amanzimtoti for years, because we had no water-borne sewerage and what about every farmer in the country?? Imagine a civil works programme that dug and kitted-out septic tanks at schools using recycled water and then teams of guys keeping them in working order? Now there’s a project worth doing.

So, in the R400bn, is a mega-fund for Infrastructure. Just to put that in perspective, a year or two ago, it was pointed out on 702 that the market capitalization of Mr Price was more than the entire Construction industry. So a company which imports clothes from China and sells them to us is worth more than Basil Read, Grinaker/LTA {Aveng], Group5, Murray and Roberts, and WBHO [the only one making money at the moment] combined. In fact, the shares of Aveng, two massive companies that we grew up with, are currently 4 cents, I am advised. How do we get to this position where the industry would probably battle to revive such is the job-bleed? Well, firstly, you steal from the SOE’s and then you take all the taxpayers’ money and spend it on salaries in government and what do you get? People affording millions of t-shirts, but no repairs of sewerage works and no building and maintenance of roads. It’s called selling your childrens’ future and is great for failed-state ignominy.

So am I depressed? No, very upbeat that we have a President who can recognise the problem and before he jets off to the United Nations and presentations to global business leaders, can announce our best shot at economic revival. His intellect, business acumen and sense of resoluteness is just a breath of fresh air. I’ve said many times before, my faith lies way above him, but if you offered me these packages announced this week and the Zondo Commission in November last year, I would have been amazed at your largesse.

Where does that leave us? As Homeloan Junction we work tirelessly to provide a consistency of service and interface with the banks that surpass expectations. We don’t always succeed we’re sure, but we press on. The wonderful thing about business is that one hand washes the other in a virtuous cycle. As I serve you, you serve me and we serve our customers. Together we do more and everyone wins. From a political perspective, we try our best to encourage each other to lose the “noise” and focus on the good in the system. The initiatives above are good by anybody’s standards and we hope they are implemented and bear fruit – jobs, upgrades, service deliveries and municipalities that work again – for all of our People. We will press on and we and we invite you to join us. We’re not Pollyanna’s, we understand the crime and grime, but we are determined to put in a solid day’s work for a well-earned reward, productive in the knowledge that we know what we are doing and we do it well.

Success to you, our readers, as you take the good, park the bad, and move on to success. We appreciate your support.

Yours in Property.

Jack Trevena
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