3 November 2009
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Johannesburg — WILL the fact that the labour movement is now targeting rich individuals along with the entire mining sector in its calls for nationalisation finally make the government provide some clarity on the issue?
Yesterday National Union of Metalworkers of SA spokesman Castro Ngobese called for the "nationalisation and eventually the socialisation, of the massive and privately owned wealth in the hands of the Motsepes, Sexwales, Macozomas, Nhlekos, Mittals and Oppenheimers of this world".
The situation is ridiculous - one day some left-wing element of the African National Congress (ANC) alliance calls for nationalisation, the next day some minister denies it is on the agenda .
And from the top...silence.
So far money is not flooding out of the country, as the global markets seem to be taking their cue from the pronouncements of Mineral Resources Minister Susan Shabangu and ANC treasurer-general Mathews Phosa that nationalisation is not government policy.
But if President Jacob Zuma continues to refuse to clarify the government's position on nationalisation, it is only a matter of time before investors begin to be swayed by the rhetoric of a bygone era and decide the risk is too great. That could be particularly damaging as the world emerges from the recession and competition for investment is likely to be fierce.
GOLD mining companies seem to have found the courage to speak up, albeit politically correctly and softly, against the potentially damaging effect to business of Eskom's proposed electricity tariff hikes.
Yesterday Mark Cutifani, CEO of AngloGold Ashanti - the world's third-largest gold miner - joined the chorus of his compatriots at Gold Fields and Harmony in speaking out against Eskom's tariff hike request .
Analysts have said the price increases could put a stop to many new projects . The gold miners have raised concerns about the dire consequences of the hikes, not just to the mining industry but to the economy as a whole. It is probably also no coincidence that it is the miners that are speaking out given that they are also being strangled by a strong rand and high wage costs.
Outside of mining, business' response has generally been muted, underscoring the sector's coyness to engage publicly on issues seen as being contentious, but which hit them where it hurts. Business silence on issues of national interest is what prompted National Planning Commission Minister Trevor Manuel to chide companies for being cowards.
True, because of SA's history, their relationship with the government may still be delicate.
THE rand has been living up to its reputation as one of the most volatile currencies and yesterday was no exception, with it weakening briefly more than 5% to R8,28/ before firming later in the day to trade 0,22% weaker at R7,83/.
Its sudden weakness has been blamed on a mistaken entry of the rand-yen cross exchange rates on the Tokyo International Financial Futures Exchange at the close on Friday, which then triggered a series of stop-losses and margin calls when the market opened yesterday morning.
But the local currency has been bouncing up to 2% a day against the dollar for the past week, and at R7,83 represents a weakening of more than 3% over the past five trading days.
Analysts blame a combination of negative news, including fears of not enough tax being collected in SA and fears of a more left- leaning government. But the main driver of the strength of the rand this year - it has strengthened 21,6% against the dollar -- has been a combination of a weakening dollar and rising appetite among global investors to take on more risk in emerging markets on signs that the global economic crisis may be over.
However, there is increasing concern about equity markets that they may be close to peaking after their recovery in March. Is a weaker rand a further sign of this?
The Bottom Line is edited by Colin Anthony.
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