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Cape Town to feature on German TV

Shortly after ten on Thursday night (14 August) the spotlight will fall on Cape Town on German television.

It'll be a full-length feature on the Mother City - the third and final feature in a short summer series on the ZDF station called "Dream Cities of the World". The other cities featured were Vancouver and Paris.

It promises to be a feature not to be missed - even in the Olympic week.

Afterthought: ZDF issued a short summary today of what we can expect on Thursday night. It made me think of my student friend, who once said (when I asked how the "blind date" was) she was "kinderlik naief en spontaan idioties".

The ZDF expose says, in all seriousness, "the feature also shows the borders between black and white, rich and poor, still exist 14 years after the end of apartheid".

Isn't that sweet? So "kinderlik naief", one must smile. I wonder whether ZDF will ever marvel that, "after four decades the Turks and the Germans still live as two nations in one country"? No. Then why should South Africa be different?
12.8.08 21:52


BAT and Reinet to list on JSE

This article just for the record. It comes from website, where it was published today:

Swiss-based luxury goods firm Compagnie Financière Richemont and local investment firm Remgro have announced plans to dispose of the majority of their holdings in British American Tobacco (BAT), which will see the multinational tobacco company gain a secondary listing on the JSE.

According to a statement by BAT issued last week, Richemont and Remgro presently hold 19.4% and 10.7% of issued shares in BAT respectively, in both cases through Luxembourg-based company R&R Holdings.

As per the restructuring announced by the two groups, both controlled by South African billionaire industrialist Johann Rupert, 90% of their combined shareholding - or around 27% of the issued share capital of BAT - will be distributed directly to Richemont's and Remgro's shareholders.

The remaining 10% of the combined shareholding, or around three percent of BAT, will be retained by the two companies and then transferred to Reinet Investments, an investment company that will soon be listed in both Luxembourg and South Africa.

"The board welcomes these proposals, which should result in the group having a more widely distributed shareholding and a broader range of both institutional and private shareholders," BAT chairman Jan du Plessis said in the statement.

The distributions will be followed by a rights issue by Reinet, which can be subscribed to by using British American Tobacco shares, which is expected to take place in early November. The Reinet rights issue is likely to be complete by the middle of December.

"Based on information provided by Richemont and Remgro in their announcements, following completion of the distributions and the rights issue, the residual Reinet shareholding in British American Tobacco is likely to be less than 10%," the statement said.

BAT had earlier agreed to a request from the two shareholders to obtain a secondary listing on the JSE, and was now taking the necessary steps to facilitate the listing, including seeking the approval of the JSE.

BAT expects the listing to take place around the end of October this year, subject to Richemont and Remgro receiving the necessary approvals for their proposed restructuring.

Once listed, BAT, which has a market capitalisation of around R560-billion, will be among the three largest companies on the JSE, vying for the top spot with global miners like BHP Billiton and Anglo American.

"R&R have been highly committed and supportive shareholders since the merger of British American Tobacco and Rothmans International in 1999 and these proposals resolve the potential uncertainty over the long-term ownership of their shares," Du Plessis said.
12.8.08 18:22

MAN Ferrostaal, Mbeki and The Big Silence

Roughly nine days have elapsed since a South African newspaper published its first claims of bribery involving the SA president Thabo Mbeki and the German company MAN Ferrostaal on 3 August.

(According to the paper MAN Ferrostaal gave Mbeki R30 million for a arms contract. In turn, Mbeki gave Zuma R2 million and the rest to the ANC.)

In South Africa the media have been buzzing ever since. On 10 August the same newspaper came with more specific "revelations". Again the SA media scene was abuzz.

And in the German media world? Until the time of this blog contribution (12 August) not a single newspaper or any other medium has reported about the MAN Ferrostaal debacle (or alleged debacle) once. Nothing.

Maybe, because the German media believe MAN Ferrostaal when it says the reports are all fabrication? OK, but even then the media should at least have taken notice of the allegations and MAN's denial.

After all, MAN Ferrostaal said it's considering legal action against the paper. And it insisted on a correction being published by the paper, which (as far as I know) the paper has to date refused to do. So, "groot kak" is coming, one way or the other. But, the German media is mum. Not a word. Very strange behaviour, to say the least.

For the sake of the journalistic principle that all sides must always be given a fair chance to comment (which the particular newspaper only did very half-heartedly), here the complete declaration of MAN Ferrostaal in response to the allegations of bribery (this appeared on the company's website shortly after the second round of allegations on 10 August):

"On Sunday, August 3 and August 10, 2008, allegations appeared in a South African newspaper that MAN Ferrostaal had bribed SA President Thabo Mbeki, Jacob Zuma and others in the ANC. These allegations are wrong and entirely unfounded.

"MAN Ferrostaal never made any payments to SA President Thabo Mbeki, to Jacob Zuma or to any other member of the ANC or to any other public official. MAN Ferrostaal in addition states that the articles mentioned contain a large number of factual errors with regards to MAN Ferrostaal and therefore violates the basics of journalistic accuracy.

"The company has requested the newspaper to publish a rectification of the article. The options of legal action are currently being evaluated.

"Contrary to what the article on August 10 claims, both of the offset programmes MAN Ferrostaal is pursuing in SA are well under way. The one for ARMSCOR, the national procurement office, has successfully been fulfilled, and, as stated in a letter by ARMSCOR, actually has been overfulfilled. As stated by the DTI a few days ago, the DTI had rejected an originally planned steel works in Coega. MAN Ferrostaal is successfully pursuing projects to replace this.

"With its offset projects executed so far, MAN Ferrostaal has made a substantial contribution to the SA economy, having invested several hundreds of million Rand and having saved and created several thousands of jobs. Examples of these projects are a production facility for microchips in Pretoria, tea plantations and a fabrication yard for oil and gas platforms in Saldanha Bay, Western Cape, which was handed over to the local operator late last year. The yard is now negotiating its first contracts.

"These contracts will give South Africa the possibility of participating in the booming African oil and gas market. The first yard will be supplemented by a second facility for the maintenance and service of oil and platforms in Cape Town Harbour. The company is currently working on obtaining permission to build this second yard. Together, the two yards and supplying local companies are expected to create several thousands of jobs in the mid term.

"Due to the success of the current projects, MAN Ferrostaal was invited last year by the DTI to enter into a strategic partnership with the Department in order to continue the cooperation after all offset obligations have been fulfilled."

end of declaration

Who is MAN Ferrostaal?

With 4,200 employees MAN Ferrostaal is represented in more than 60 countries. The company achieved a turnover of EUR 1.4 billion in 2007. It is a subsidiary of MAN Aktiengesellschaft, Munich. The MAN Group is one of Europe's leading manufacturers of engineering equipment and vehicles, generating annual sales of around EUR 16 billion.

MAN supplies products, systems and services to the capital goods industry and employs approx. 55,000 people worldwide. The core areas operated by the MAN Group (commercial vehicles, industrial services, diesel engines and turbomachines) all hold leading positions in their markets. MAN is a member of the DAX German Share Index, Germany?s top 30 public limited companies.

I should, perhaps, add that it was reported on 23 June (by Handelsblatt and Financial Times Deutschland) that MAN has employed investment bank Goldman Sachs to help it sell its division Ferrostaal. The process is underway. Finally, Volkswagen has been trying for a while now to buy MAN (or parts of it).
12.8.08 10:24

Old Mutual takes a knock

A botch-up by employees cost South African insurer Old Mutual 107 million pound sterling, the UK website Timesonline reported today.

Staff sold Bermudan-based products to its Asian investors with a guaranteed rate of return, only to have some of its US staff fluff their defence strategy for what to do if markets fall.

"Old Mutual, listed in London as well as Johannesburg, told investors today that it was only 60 per cent covered for falls in Asian stock markets. In real money that means a hit of £107 million - or more if Asian markets continue their precipitous decline," the website said.

Today's hiccup on annuity guarantees at US Life is the second setback to Old Mutual this year.

Barrow, Hanley, one of its American investment boutiques, has already suffered from an ill-fated $1 billion investment in Bear Stearns, reported Timesonline (
7.8.08 21:01

Tony Twine is in for a surprise

Germany's biggest national business daily newspaper Handelsblatt asked the question this morning 'whether economic policy will make a jump to the left in the post-Mbeki era, and if, how big that jump will be'.

Two private sector economists and the DA were quoted. All three parties said there will be a jump to the left. But, and this is the important point, the two private sector economists guessed it would be a small jump to the left, while the DA warned a radical jump was on its way.

I'm afraid, this time around the private sector economists "het die pot misgesit", as they say in the classics on the other side of the Du Toitskloof.

Like the DA, I spent the vital first four years after 1994 in parliament, where I witnessed how it came that SA didn't get "populistic policies", but IMF-endorsed policies. I saw how arrogant and aggressive and cock-sure Cosatu was up to that vital day in 1996 when the private sector-friendly policy was published, how they were absolutely convinced that "their way" was going to happen, and I saw how angry, shocked and surprised Cosatu was when things didn't turn out the way they had expected them to, and how they withdrew their representatives from parliament from the very next day the 1996-document was published, and how they vowed to revenge this "betrayal of the workers".

In short, I know that SA was only spared the populist economic policies (propagated before 1994) for a short period. That period is about to end. The private sector economists are in for a big surprise.

I observed in parliament that SA got the policies it got, only thanks to a small number of senior politicians (lead by Nelson Mandela) and that this policy-selection was not supported by many outside this small group of (very influential) individuals. In short, free markets have never been "in the blood" of the majority of ANC supporters.

So, the direction taken after 1994 (and especially after 1996) was connected to a few leaders, the last of whom will be in retirement by next year. That's also when the last defences against "socialism" will fall.

Now, the article quoted the private sector economists as saying SA's economy cannot easily be "sosialized". I differ again. All that has to be done, is for prices to be fixed in a few sectors.

As the government is about to do in the health sector (where they want to prescribe to the private hospitals how much they may charge....with the result that Medi-Clinic effectively "emigrated" to Switzerland last December) and wants to do in the building sector, food sector, energy sector and a few others (take a look at the economic decisions taken at Polokwane in December last year).

(And what are Cosatu's efforts to prevent Tito Mboweni from raising the interest rates other than attempts to fix the prices banks charge for money?)

To devastate supply, dictate to suppliers how much they may charge for their products, without fixing their input costs. That's essentially what Mugabe did in Zim in the 90s. We all know how that experiment ended.

Nevertheless, that seems to be the way the "new" (really "old") ANC wants to go.

Here a section of the abovementioned article as it appeared in the Handelsblatt this morning. I'll translate, if anyone has the need. Ask me, I'm at e-mail: editor (at) ntsnn (dot) com

"Die Cosatu selbst plädiert seit Jahren für eine stärkere Intervention des Staates und höhere Sozialausgaben; letztere wollen die Gewerkschaften aus dem gegenwärtigen Haushaltsüberschuss finanzieren. Daneben wehrt sich die Gewerkschaft vehement gegen eine strikte Inflationsvorgabe. Offiziell hat die Zentralbank am Kap den Auftrag, die Teuerung in einer Spanne zwischen drei und sechs Prozent zu halten. Momentan liegt die Inflation mit 11,6 Prozent jedoch weit darüber. Dies hat die Zentralbank zu einer restriktiven Geldpolitik veranlasst, die bei den Gewerkschaften auf wenig Gegenliebe stößt.

Trotz des immer stärkeren Einflusses der Gewerkschaften auf die Wirtschaftspolitik des ANC rechnen namhafte Ökonomen nicht mit einem dramatischen Linksruck der Partei unter Zuma. "Ich sehe nicht, dass sich Südafrika auf eine Planwirtschaft nach Vorbild des früheren Ostblocks zubewegt", sagt Colen Garrow, Chefökonom beim Investmenhaus Brait. Allerdings erwartet er unter Zuma eine Wirtschaftspolitik mit stärker populistischen Elementen. Radikale Schritte wie die Gewerkschaften sie fordern, würden von den Finanzmärkten jedoch schnell bestraft. Zudem sei Südafrika bei seinem Wachstum sehr stark auf ausländische Investitionen angewiesen.

Auch Tony Twine vom Wirtschaftsberatungsinstitut Econometrix warnt vor einer Überreaktion auf die von den Gewerkschaften angeschlagenen radikalen Töne. Zwar habe am Kap vor 14 Jahren mit dem ANC eine im Herzen sozialistische Bewegung die Macht übernommen, doch habe er sich immer mehr in Richtung Sozialdemokratie entwickelt. Anders als der Agrarstaat Simbabwe verfüge Südafrika auch über eine starke industrielle Basis und sei viel stärker in die Weltwirtschaft integriert. Dies begrenze das Interventionspotenzial des Staates beträchtlich.

Weit weniger optimistisch zeigt sich die liberale Demokratischen Allianz (DA). Die offizielle Oppositionspartei befürchtet unter Zuma eine viel stärkere Interventionspolitik des Staates und die Etablierung einer strikten Planwirtschaft. Zum Beweis führt die DA die nun geplanten Landenteignungsgesetze an, die die Verstaatlichung von Farmland fast völlig in die Hände des Staates legen und ein Affront für weiße Farmer sind."
7.8.08 10:06

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