vl

BUSINESS
South African
capital looks
JSE 'fatcats' outweigh the
toward Angola The small man hasfled the
Johannesburg Stock Exchange When big isn't
By EDDIE KOCH ... Or has he?
SOTITH African businessmen are REG RUMNEY repons WIO Oilrrs Wwn auhor RoHn Mc(
gor lays thal while "bfu is often bear
casting their eyes westwards to An- fu|", the degre ol concentration ln
gola where a pending peace settle- 1 FEW individuals in Sourh Africa own pdvale gector was excesslve es1
ment between the MPLA govemment shares listed on the Johannesburg - prl
cially in the light ol the she of the
and Unita rebels promises to open a Stock Exchange. And their number teclor.
lucrative market for investment and has decreased, admis JSE president [b arfircd at figutes on economb q
Tony Norton. cenlration thus: "South Africa proba
rade. has aboul 200 000 operatingcom
"It's all very sensitive and still a But it hasn't dwindled to the insig- nies irrcludlng cales aid so on-. Afte?
very tender line of communication," nificant percentage that some have examinalinn ol Kreditinform's databa
says Bill Gresty, a consultant who been led to believe by incorrect analy- it would appear that only 40 000.0
specialises in exploring business op- sis of figures pro'duced by JSE- employ more than 30 people. There r

watcher Robin McGregor. 25 236 companies listed in lhe 1(

pornmities in Angola. cditircn ol Who Avns yUhorn as subsi
But a number of companies in- "The abandonmenr of the market by ariee or associates of companie lis
-
cluding giants like De Beers, Premier tlte small man has been an intema- on the JSE. lt is unlikely thal lhere r
Intemational, Anglo Vaal Industries tional phenomenon," Norton notes. many listed company subsidiaries wh
and Shell South Africa have The significance of this in the light employ la3s than 30 people, whi
-
launched a serious initiative to take of the threatening noises about na- means that 63 percent ol the medir
and large'size companies in South A
advantage of new business initiatives tionalisation coming from the African ca are conlrolled by listed companies.
in Angola. National Congress camp is obvious. McGregor added: "To aggravale tl
De Beers chairman Nicky Oppen- if the stock exchange is seen as a club JSE president Tony Norton ... degree of concentration, lour groups
heimer made the fek to Luanda in tre of "fat cats", it is unlikely to have also concerned about illlquldity lhe JSE control 80 pelcent ol marl
capitdisatirn."
middle of last year. He clinched an friends in a new Souttr Africa. on ttlestod( mafl(et
agreement with Endiama, the Ango- Calcuiating exactly how many indi-
lan govemment's diamond marketing viduals own shares in listed compa-
profi t being non-taxable). high price of shares tends to me
On the other hand, it is argued that having a spread problematic,
arn, to explore the possibility of nies isn't a simple matter. "The prob.
jointly mining the country's gem-rich lem is that we don't know what lies the presence of individual direct in- agrees, but for those with limit
vestment in the JSE is irrelevant. funds unit tnrsts offer a method of
Kimberlite deposits. behind nominee rulmes. For instance,
"The fact that institutions dominate vesting in a spread of shares.
The Angolans, who produce about Standard Bank nominees might be
ownership on the JSE doesn't mean Nofton points to the power of eq
one milliur carats of gemquality dia- buying shares for I 000 individuals."
join the private investor is not in the mar- ty investments. Equity investmer
monds a year, also agreed to the However, it's no secret uading on
ket. He is in the marker through the have offered compound growth 1
Central Selling Organisation (CSO) the JSE is dominated by the big insti-
institurions." annum of 25 percent to 28 percen
the international marketing canel tutions like Sanlam. Once a year the
-
that is cmrolled by De Beers. JSE does an analysis of one week's
Norton further says the individual year, far higher than inflation.
investor is fickle. "The private inves- For a new govemment" nationalir
Following in Oppenheimer's foot- trading. For a week in July 1989 the
tor is a tidal phenomenon, coming tion of listed shares would pose enr
steps are Premier, Shell and Anglo percentage in value of rades dme by
into the market and going out, with mous problems, arSues Norton. O
Vaal hdrsfies who have all begun to institutions (mutual funds, pension
the market's suength or weakness. way or another individuals do havr
look very seriously at investing in the funds, insurance companies, and
He was here in great force in 1987, smke in many big listed companir
war-torn country once the conflict mining finance houses) was 54 per- only to be gone
again in 1988." Taking over the companies would
stops. cent" by JSE members 31 percent and
A similar influx and outflow was effect be dispossessing the indivit
It is reported that manufacturers of by private individuals around l5 per- seen in the late 1960s.
heavy mining equipment and trucks cent. In the comparable period in als who have shares or unit trusts
He agrees this has meant at times pension funds and the like. Comg
are discussing contftrcts to zupply De 1987 the figure for individuals was
that individuals lost money as booms sation would have to be pai( and
Beers with the hardware needed for 22prcent, the figure for institutions
48 percent.
went bust, with a resulting disillu- govemment could afford such co
its mining operations. "We are inter-
ested in the same kinds of involve- Norton stresses holding shares di- sionment with shares as investments. pensation. Taking over any com1x
Norton reckons those who want to without paying compensation wol
ment that we have in other parts of rectly has not been historically en- use the market
Africa," Premier MD Katerina Yian- couraged in South Africa. should do so with scare off foreigr investors forgver.
good advice over a lengthy period. Rather than a negative approach
nakis told theWeekly MaiI. "This in- "The whole struchnle of the econo- "Don't
invest for less than three yean the stock exchange, any govemmr
cludes food exports and the rehabili- my, the lack of savings incentives
and have a spread of shares." The should errcourage investment.
ation of existing industrial infrasruc- and the tax system, have favoured
ture.' contractual investnrents." I
] nt^^-r^ ^-) ^ 1^-
turtr.
Peter Hugo, Shell's marketing
manager for lubricants, says Shell is
Individuals have tended to take out
policies wirh the big insurers like
S u t)o et cuts thn
ready to begin exporting lubric,ants to Santam and Old Mutual These poli- CHAMBER of Mines Research 0r-
Angola, a major exporter of crude cies promise a high eventual retum, ganisation (Cornro) staffare untryy Weekly Mall Reporter
oil, when the conditions are right. whereas money put in the bank has about a 42 percent cut in the trganisa-
And Anglo Vaal Industry subsidiar- been eaten away bvjinflation and ux. tion's budget, from R70-million to *Maybe they believe that in the lor
ies Becketts, Bakers' Biscuits The result has been a low rate of sav- just over R40-million. term they will be nationalised any*
-
and Irwin and Johnson are report- ing by individuals, and even dissav- Sources within Comro contend that and have already shifted their foc
- in An- ing or buying on credit. the cuts put in jeopardy research es- outside South Africa."
ed to be extremely interested
gola's food maket and the exremely Individuals - spendinghave in general not had sential to tlrc lurg+erm health of gold The jobs of highly skilled researc
rich supply offish off its coast. the money to invest directly in the mining in South Africa. ers, many of whom are foreigne
"The big attraction is that the Ango stock exchange. But the Chamber of Mines, whose may be in tlrc balance.
lan government is desperate forbasic The dominance ofcornpany inves- members are the six major mining As theWeekly Mail went to pn
commodities such as clothing and tors on the JSE isn't good for the houses, asserts that the cuts are ne- the result of a meeting to thrash c
simple foodstuffs to feed its people," stock market, Nortm believes. cessary final details was not yet known.
say Gresty. "Unlike other African "We want the small investor, be- The sources fear the functions of The sources' arguments are as f<
states it has the ability to pay and has cause he creates another constituen- Comro most likely to be cut are those lows: the exploitation technology r
allocated l0percent ofits oil revenue cy. Some have blamed instability on relating to long-term research on vision of the Comro does research r
to puchase these goods." the JSE to the effect of tbe dominance deep-level mining. More immediate making mining at great depth pos
Most of the business representa- of one constituency." research aimed at keeping down ble, as well as cutting costs of dee
tives interviewed by tlrc Weekly Mail The institutions all produce the costs, and services provided to the Ievel mining. The research is cruci
sEessed that their plans for a drive same kind of reseach, have the same mines by Cormo ae unlikely to be d- those who oppose the budget cn
into Angola are still in early and deli- technoiogy and are all interested in fected. Various divisions also have argue, because gold mines are del
cate staSes. the same kind of shares. fixed coss which cannot be cut. The ing ever deeper, increasing workit
The issues that need to be sorted But favouring winds for small in- result is tlnt the acnral budget cuts for costs, while labour costs have bet
out are twofold: security and sanc- vestors have sprung up. Norton wel- specific reserch could be 50 percent accelerating and the gold price tl
tims. "There has to be a guarantee of comes the rec€nt budget as infoduc- or more. shown continuing wealness.
security before business of any sort ing changes to a set-up that for dec- The sources believe that the mining Comro is working to devise tecl
will go there in a big way," says De ades has militated against investment houses which comprise the chamber nology which can make viable the u
Beers representative Neville Hux- in the stock exchange. are taking the short-term view. tra-deep level mines (4 000m t

P
ham. Norton promises the toughest legal
The Angolan government, while it drive against insider trading with the
is reportedly keen to establish infor- passin! of new laws recently. Fur-
mal contact with South African capi- ther legislation is awaited to give ef-
talists, at this stage is still bound by fect to the law, md Norton Promises
the official embargo on economic a "public hanging". krsider rading Members
dealings with South Africa. has been defined as a fraud and statu- b apdy 1

But while everyone connected to tory powers I to investigate have been ZenzeleniClohing CoOperaliw in Durban rquires a rng Progr

tle business foray into Angola sress- given to a panel which consists of 19t.
es that they are moving cautiously people drawn from the business and Regionol T-Shirt Solesperson/ The coun

and slowly, the Weekly Mail is n- professional community.

Soles Coordinotor 1. LEAOEi

formed that some of the projecs are The budget dropped marketable se- z clltal
3.
well beyond the planning stages. curities tax the tax paid by inves- RI{ANC

South Africa's Department of For- -

tors when buying shares to 1,5 h prcrnoto saleo ol TShirls h
trado unions, tenkur, ineli- .. PROIB

eign Afrairs @FAlis said by some of percent and the goverment- is com- lubrs, progrcsive ad ommunity organisalions in the s. soclAl.

WerrnGpe. Apcicrnt
those involved to have adopted a nov- mittedto phasing tlre tax out altogeth- bms ma
er over three years; the tax on divi-
el line on &e issue. In contrast to tlrc Tlre apdicant must haw hisfter orm nliatle haneporl, be We apob
energetic and aHe to work llexitime houn. po6Sonsr
paltem in Mozambiqug where South dends, effectively a double tax since
Conlact Shdnnie Mllet at Zenzol€ni Clohing. 38 Btooklyn address
African capilal flowed in in an ad hocthe company paying the dividend has Road, Jacobe. POBor
way' DFA is asking entrepreneuni to already paid tax, was dropped; and For te6pl
hold fire until a peace settlement is what is a capital profit and what isn't Te[031 -4611000 Telelax(81 -481652 339{774
finnly inplace. has been better defined (the capital
.: