Commercial and business


Our Rand exchange rate has been quite volatile of late and, aside from the accepted understanding that its value will depreciate against most major currencies, the last Big Mac Index report (before the Rand fell fairly dramatically) which compares purchase-power-parity, holds that its real value should be R8.94 against the US dollar. This suggests that our Rand is 50% undervalued. Having said this, the fact is that travel has become quite expensive as our Rand has consistently lost ground against our Commonwealth peers as may be seen from the following graph:

Mixed messages come from our local economy: on the one hand retail sales have been declining for seven months. On the positive side (for a change!) Is Absa predicting that our full-year economic performance will be better than that forecast. The ever-optimistic Roelof Botha points to a turning point in inflation and rate hikes, the recovery of tourism and the getting-together of the state and private sector over transport and ports. In fact, Standard Bank’s CEO says that, had it not been for our Eskom woes, our economy would have grown at 3%.

News of import:

Unisa is reportedly to be placed under administration – one would not have thought this possible.

Good news is that medical schemes have been told by the industry regulator, CMS, that contribution increases for next year should be 5% or less. The wisdom of the state prescribing to the private sector what it should charge, is questionable.

WTW says that inflationary pressure and a challenging labour market should result in salary increases of some 6.1%, on average, in the private sector for next year.

Sanlam is unwinding its R8bn B-BBEE deal – one wonders what the effect on its share price would be?

Great news is a huge gas discovery near Secunda by Kinetiko Energy, an Australian listed entity.

A Moneyweb report pointed out that defensive stocks were amongst the worst performers, over five years, on our JSE.

Uber appears to be on the downhill path.

Topics of interest

Until now, burgeoning mineral exports had propped up our financial situation. A BusinessDay report said that the plunging international coal prices has resulted in our road transport of coal, no longer being viable, owing to the cost thereof. This is going to be interesting.

Much has been made of our informal sector, but its estimated 20% employment and 5% contribution to our GDP, pales in comparison with an average of 83% employment rate in the rest of Africa and 60% worldwide. Despite this, reports hold that this sector has grown by 23.6% over the past year – apparently owing to the proximity of such traders to consumers.

I have commented in the past on our business and state coming together to rescue those parts of our economy which business needs to work, in order to trade. Predictably, reports now hold that aside from giving advice, business is hesitant to invest in very expensive projects, whilst corruption and maladministration persists. This is a problem as the shortfalls are truly huge – our Public Works Minister estimates that R1.6 trillion is required to overhaul failing infrastructure over the next seven years. Truly, the results of neglect are staggering. Amazingly this just happened, and no one is to blame!

I confess to being torn between the need to encourage competition and the results of the actions of our Competition Commission: these may well result in those, who are successful, being punished for doing well. BusinessTech ran a note on this on 16 August, which makes for interesting reading.

Entities, which employ workers in dangerous environments, often require employees to take breathalyser tests before entering their premises. Could you fire an employee who fails such a test? Read for yourself: Reference

Can a South African start-up readily shift its operations offshore to avoid local uncertainties? Yes, but the tax consequences could well be prohibitive, as our Reserve Bank might require such entities to remain tax resident in South Africa: Reference



FNB’s Residential Property Barometer for this month, holds that 81% of sellers in Q2 2023 were compelled to lower asking prices, which is higher than the figure in the previous quarter.

FNB says that semigration has overtaken immigration as a driver for house sales, in our larger metros.

You don’t need to be told that much of the above movement is towards Cape Town, owing to better governance in that locality. The following graph illustrates this vividly:


An interesting note, on residential purchases and Cape Town, reports that the city fathers of that city are concerned, as reportedly some 70% of the residential units in the centre of that city, are let out for Airbnb purposes – great for estate agents, but not for building a regulated society.

Despite the growth of our population, residential building has not kept up; consider the following graph:

South Africa has some 70,000 community schemes, which include gated communities. Our Minister of Human Settlements wishes to impose procurement by such entities of services from previously disadvantaged communities. Managing agents will be included in this drive to transform! Imagine the bureaucracy needed to police this.

Once holder of the pride of the lani developments position, Zimbali, is in the spotlight as owners in the Zimbali Heritage Place claim that they have seen a dramatic share-price drop in that scheme, owing to alleged neglect. But

More on the Fais Ombud and property syndication complaints: Reference



Lawyers misbehaving:

Family? Not that I know of, but a lady who shares my surname, stole R537m from her employer over 13 years – not too shabby! What I found amazing is that no one noticed the shrinking bottom line.

The director of Clientèle resigned after the SCA suspended her legal licence for six months, owing to the legal practice, Chueu Inc, from where she had previously practised, having not returned RAF overpayments to that fund.

The State Attorney was taken to task by the Deputy Judge President of Gauteng, for an ‘outrageous’ attempt by the Gauteng MEC to rescind an order granted two years ago. Private practitioners should, in theory, dump a client who acts unconscious ably. Would a state attorney be able to tell his employer to get lost without getting fired?

Judge Motata is about to become the first judge to be impeached in South African history – owing to misconduct dating back to 2007! Bluntly, to have the SCA tell the JSC to do its work, is scandalous and indicative that the JSC is worthy of little respect.

The press picked up on some 10% of surveyed attorneys not paying candidate attorneys for their articles. The fact is that many more students pass their final exams than can be absorbed by the legal profession. If such an “unwanted” hopeful presents himself and offers to work for free, in order to obtain experience or pass the entrance exam, is hiring that applicant necessarily reprehensible?

I refer readers to my note above dealing with SARS’ take on opening a branch elsewhere: a Moneyweb note on the Coronation judgement, dealing with outsourcing, is worth reading for entities that wish to outsource work to outside of South Africa: Reference

Liebenberg’s contribution to funding Nummawan’s court cases, was noted but, aside from wondering what benefit the gentleman derived from those actions, passed largely un-noted; that worthy’s liquidation is news, as those contributions now must be repaid and, all know that the beneficiary of his largess is broke(?). No bets taken on the possibility of recovery.

A class action, following on coal mine dust lung disease, contracted by employees, will be brought against three coal mining companies for their having failed to implement legal protections. It is said that a similar action, against other miners, will follow.

A recent spate of writing on the inability of the Police/NPA to bring political miscreants to justice, is interesting to follow. The issues are primarily how to firewall prosecuting institutions from political influence and to capacitate those institutions. The Scorpions were successful as that institution brought together investigation and prosecution under one umbrella. The difficulty is that politics intrude on such reform as the primary target of such an institution would be its creator.

Hard news:


The May judgement, declaring section 7 (3) of the Divorce unconstitutional continues to reverberate in the press, in that all manner of advisers are picking up on the issue; the effect of the judgement (if endorsed by the Concourt), is that a divorced spouse will be entitled to have a judge decide on a contribution from her/his previous consort, despite having been married out of community of property after 1984, as was the case with pre–1984 marriages.

Predictions are that the above result will open the door for spousal claims against deceased estates also.

The proposed Divorce Amendment Bill is not news either but continues to make headlines as it will place religious Muslim marriages on par with others in providing safeguarding mechanisms for minors or dependents. Good.

Another, quite interesting note by ENS, deals with non-compete and no-poaching agreements. Non-compete contracts are routinely included in contracts when selling a business, to protect the interests of the purchaser in the business bought. Washing over from overseas is an approach that such contracts unfairly limit the ability, of especially employees, to start new businesses or find employment elsewhere. Do take a look: Reference


A note by a BusinessDay columnist, quoting King, i.e., ‘the tranquilizing drug of gradualism’ brought the following issue to mind:

The phrase, ‘equal before the law’ is misinterpreted by many – it means really that everyone has rights to equal protection under the law. It does not mean that all appearers are equal. Consider Nummawan’s ass having been saved by politicians. The fact is that those, with deep pockets and influence, are substantially more isolated from legal retribution than others.