BizNews Radio

News headlines:

*Acting Chief Justice Raymond Zondo has heavily criticised tourism minister Lindiwe Sisulu’s recent opinion piece where she challenged the effectiveness of South Africa’s Constitution

*The Pretoria High Court has found that South Africa’s Administrative Adjudication of Road Traffic Offences (Aarto) Act and the Aarto Amendment Act are unconstitutional.

*Cape Town mayor Geordin Hill-Lewis says his city formally rejects an application by Eskom to increase the price of electricity by 20.5% in the 2022/2023 financial year.

Tongaat analyst and whistle-blower David Woollam shares the grave details about the rise and fall of one of KZN’s most treasured businesses, Tongaat Hulett. Tongaat was the subject of accounting irregularities when its former management was responsible for cooking the books. Now the company is coming after those executives to the value of R450m, a fraction of the R10bn+ in shareholder value that has been destroyed. Operational issues coupled with a large debt burden has led the company to announce a highly dilutive rights issue, which will increase the shares in issue by 33-fold. Shareholders who own R1,000 in Tongaat will have to cough up between R6,000 and R7,000 to maintain their pro-rata shareholding. Worse, the pricing of the rights issue is yet to be determined and Tongaat shareholders are going into the new year blindfolded.

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In this episode of the BizNews Power Hour, "Doctor of Uncertainty" Dr Richard Smith offers his insights into volatile US tech stocks; we meet the surprise of November's Local elections, 30 year old uMngeni mayor Chris Pappas; Tongaat whistleblower Dave Woollam explains why he's horrified at recent developments at the company - including the shadowy attempt by a Zimbabwean tobacco family to acquire the business on the cheap; and we find out about one of Michael Appel's favourite Zondo witnesses - the brazen huckster who ran the SA operations of multinational Swissport.

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News headlines:

*With the end of the fourth wave of Covid-19 on the horizon in SA and the end of the current national state of disaster due in a few days, scientists and politicians have made calls for President Cyril Ramaphosa to allow it to lapse as it is no longer considered necessary and undermines democracy.

*Mineral Resources and Energy Minister Gwede Mantashe says that there’s no need for his department to review the decision granting Shell exploration rights on the Wild Coast, because it has already deemed the gas and oil exploration activities would not have a detrimental impact on the environment.

*The government has distanced itself from tourism minister Lindiwe Sisulu’s “reckless” tirade against South Africa’s constitution, where she suggested that it has done nothing but keep the masses in poverty.

US-based investor Dr Richard Smith unpacks the implications of a persistently higher inflationary environment and rising interest rates on the financial markets, with a particular focus on US equities. A Goldilocks era for equity markets seems to be coming to an end. The Fed is taking a more hawkish stance as the economic indicators have been flashing red. Inflation, the primary threat to equity markets, has been a major headwind for emerging tech, the high-growth businesses that were the standout winners at the start of the pandemic. Dr Smith emphasises the importance of understanding the behavioural dynamics of investing, especially during market downturns. He says that given human nature hasn’t changed in the last 20 years and valuations are at their highest levels in history, a market crash such as the dot-com bubble can be repeated.

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BizNews regular contributor and passive management pioneer, Steven Nathan, reflects on a restful festive period and looks ahead to what lies ahead for the financial markets in 2022. South Africa has grossly underperformed the returns experienced by global markets over the past decade. This underperformance has been driven primarily by an incompetent ruling party, with fraud, corruption and aimless economic policy have been constant headwinds for the private sector. Steven believes a more supportive economic policy could lead to growing key economic indicators such as GDP by more than 5% per annum for the next decade. To wrap up the conversation, Steven discusses Bob van Dijk’s R150m plus investment into Prosus, which will be seen as a sign of confidence by shareholders. - Justin Rowe-Roberts

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One of the biggest shocks of South Africa's Local Elections in November was the victory by the Democratic Alliance in the 67% Zulu-speaking, previously ANC-supporting uMngeni municipality. The surprise victory, the DA's first in KZN, owes much to the efforts of multilingual Chris Pappas, who although only 30 is already something of a veteran at the DA. Pappas, born in Mooi River and the son of KZN Midlands farmers, describes himself as pragmatic but also "a hopeless idealist". He may well reflect a political future few South Africans believe possible. Here's his unlikely story

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US-based investor Dr Richard Smith unpacks the implications of a persistently higher inflationary environment and rising interest rates on the financial markets, with particular focus on US equities. A goldilocks era for equity markets seems to be coming to an end, with the Fed taking a more hawkish stance as the economic indicators have been flashing red. Inflation, the primary threat to equity markets, has been a major headwind for emerging tech, the high growth businesses that were the standout winners at the start of the pandemic. Dr Smith emphasises the importance of understanding the behavioural dynamics of investing, especially during market downturns. He says that given human nature hasn’t changed in the last 20 years and valuations are at their highest levels in history, a market crash such as the dot-com bubble can be repeated.

Corion Capital publishes an informative summary of asset class and fund performance returns every month. David Bacher, Corion Capital's chief investment officer, reviews the winners and losers for the month of December.

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Director of Accountability Now, Paul Hoffman, unpacks the findings and implications of the State Capture Commission Part 1, which was handed over by Acting Chief Justice Raymond Zondo to President Cyril Ramaphosa last week. The full report will be released in three tranches, with the second and third tranches expected to be released at the end of January and February respectively. Hoffman believes Zondo will consolidate all his recommendations in the final tranche with respect to those implicated. Part 1 is split into three sub-sections, namely SAA and its subsidiaries, The New Age newspaper and its controversial business breakfasts as well as SARS and public procurement.

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