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GNU NOISE IS JUST NOISE

What does 2025 hold for the government of national unity (GNU)?

The pact ushered in a wave of optimism, boosting market sentiment and investor interest

When cracks over policy issues emerged early on between parties, President Cyril Ramaphosa appointed a “clearing house” , or dispute resolution mechanism, chaired by his deputy, Paul Mashatile

The clearing house is processing crucial policy differences between parties with Ramaphosa set to have the final say. Still, the political temperature around the GNU is high, particularly over the past week From the outside, it appears dissent is growing, especially in the ANC

One of the party’ s key allies, the SACP, has rejected the GNU, deciding at a special conference last week that it will contest the 2026 election on its own ANC chair Gwede Mantashe declared last week that any party unhappy with the way things work is free to leave, in a direct reference to the DA

The ANC in Gauteng has rejected working with the DA in the province, and forms the base of those who want to see the back of the party

EFF leader Julius Malema told his party’ s elective conference last week that he is waiting for the DA to exit the GNU before his party will enter the governing arrangement

It will happen soon, he declared, arguing that the differences between the ANC and the DA over the Basic Education Laws Amendment (Bela) Act marks a moment of intractable conflict

“Once Helen Zille is out, siyangena [we go in],” Malema said

It is a bleak prospect, one that could

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dampen the positive mood in the country

The Centre for Risk Analysis does not believe the GNU will falter in 2025, nor does the FM The need for the arrangement to hold is intense for the ANC and the DA; it is crucial to ensure stability and confidence, and is the only path to growing the economy The noise inside the ANC and the alliance for now is just noise

Malema’ s assertion that the education law is a red line for the DA is misplaced; a number of DA leaders are on record as saying that the law can be implemented, as long as fitting regulations are in place beforehand National Health Insurance (NHI) marks more of a red line for the DA than Bela

The argument that the ANC will remove Ramaphosa if he concedes to demands from GNU partners it is not just the DA which has taken issue with the Bela Act and NHI is also a weak one. Ramaphosa’ s popularity still far exceeds that of the ANC Axing him will be political suicide for the party before the local government elections in 2026

The only clear threat to the GNU in the medium term remains the ANC’ s next elective conference in 2027, when a successor to Ramaphosa will be chosen Among the front-runners, Deputy President Paul Mashatile and secretary-general Fikile Mbalula, there is little clarity over whether they will continue with the pact in its present form Some in the ANC argue Mashatile would end the DA’ s participation, while Mbalula is more likely to retain it Either way, despite the ANC’ s crucial midterm policy review meeting next year, the GNU looks set to hold at least until 2027

Hopefully by then the partners will have carved out a clear way to grow the economy and put a dent in unemployment

This is the GNU’ s most urgent task for 2025 x

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BANK ON CHANGE

Not too many years ago

Nigerian financial services enterprises might have been on the radar of any number of South African ventures looking to gain strategic footholds across the continent The boot is now on the other foot

Nigeria’ s Access Bank has pitched a R2 8bn offer for niche financial services business Bidvest Bank

It’ s not Access Bank’ s first local rodeo The group has been operating in South Africa since 2021 when it snapped up Grobank Just how Bidvest Bank with its distinctive position in foreign exchange, business banking and fleet and trade financing fits into Access Bank’ s vision of becoming the “gateway to Africa” will be fascinating to watch unfold

Coinciding with this move, Brazilian digital banking group Nubank has made a meaningful investment in local fintech operator Tyme Group

Tyme operates two digital banks

TymeBank in South Africa and GoTyme Bank in the Philippines

Tyme completed a $250m funding round, which was encouragingly oversubscribed Nubank took up $150m, the M&G Catalyst Fund another $50m and the remaining $50m came from existing shareholders

Maybe some of the scepticism about Tyme’ s ambition to become a top three retail bank in South Africa within the next three years will burn off Certainly, the mooted stock exchange listing for 2028 might even need to be brought forward x

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editor’s note by Marc Hasenfuss

editor’s note by Rob Rose

I KNOW IT ’S ONLY STOCK AND ROLL ...

Zahid Group’ s offer to buy out Barloworld is a timely reminder that scepticism can be misplaced

Idetest taking stock of another year gone, being the perennial underachiever across the many traditional gauges of success I managed to lose more than I won on both the padel and tennis courts, and as soon as I repair one torn muscle another summarily gives way Even though I don’t have the stomach for it, I now munch anti-inflammatory tablets as if they were Smarties

My only solace was that my Strava “ year in review” showed I managed to clock up 1,513km, which, according to the app, meant I outdid 92% of its users It’ s a hollow victory, though On more than one occasion, as I traipsed past the outer limits of Kommetjie, the Strava app would veer into a twilight zone and a 5km stroll would register as a 12km sprint Very flattering Apple Music, my backdrop when I toil away, also gave me pause for thought I spent almost 500 minutes listening to the “King of New York” , Lou Reed I ga Invitation (a song where Lou espouses th benefits of tai chi) and New Sensations (where our man gets zenned on a motorcycle) more than 14 listens each during the year

I am slacking a bit, because Apple tells me I spent about 850 hours wallowing in the genius of Frank Zappa in 2024 Clearly it was a year of yearning and self-deprecation My most listened to songs this year were Lloyd Cole’ s No Blue Skies, The Rolling Stones’ s I’ m Going Down, Richard Hell’ s Time, Mark Lanegan’ s One Hundred Days, The Cars doing Let the Good Times Roll and Toots Thielemans puffing extra pathos into the weary theme from Midnight Cowboy No wonder my whisky stocks are depleted

coin around Knuckles McDuck the wonderful creation of late, great FM colleague Peter Wilhelm.

It was apt, I suppose, to end the year with a timely reminder that some of our ingrained scepticism is often misplaced At least I called this deal half correct earlier in the year when I speculated the Zahid Group was going to buy out industrial giant Barloworld. Zahid, joined by Barloworld CEO Dominic Sewela, will fork out an effective R123 10 a share to buy out minority shareholders That’ s a decent premium on Barloworld’ s recent share price and a serious 87% premium on the group’ s average share price of R65 72 about 30 days before the issuing of a cautionary in mid-April There’ s not been much good news at Barloworld in the past 12 months, so I suspect minorities will mostly take the money and run

It will be sad to see another stalwart of the JSE’ s broader industrial segment delisting, remembering we lost the mighty Imperial Logistics (also to an offshore investor) only a few years ago While there has been a marked uptick in sentiment for South Africa Inc counters since the formation of the government of national unity, there are still a good number of undervalued industrial counters that might be advanced on by offshore predators in the year ahead Hulamin springs to mind Metair, Santova and Master Drilling? Maybe

Speaking of which, KAP a sprawling play across numerous sectors from timber to polymers is slowly regaining its mojo Things are not that pretty, but it’ s clear CEO Gary s knuckling down and racking up those yards that come before a much-anticipated wnward stretch, when the business will apitalise on its big capital expenditure programme over the past few years (which will hopefully coincide with stronger momentum in local economic growth)

In a year in which, I assume, most readers enjoyed better fortunes on the JSE, I was largely forced out of my market positions by domestic demands that just seem to get bigger as my offspring get older That said, I did have loads of fun with Brait though I will confess that I have not had the guts to crunch the numbers to see whether I finally sold out with any dignity Kore Potash, one of my long shots, finally paid off Finbond Mutual Bank was a worthwhile flirt too The legally hinged Randgold & Exploration might test my patience into 2025, not that there is an option for a graceful exit

Frankly, there’ s far more frivolous fun to be had in the crypto market, where I had great difficulty recently restraining myself from tilting at the Peanut the Squirrel meme coin I am halfseriously wondering if there is any merit in developing a meme

The good news is that timber business PG Bison started and ramped up its new R2bn production line in Mkhondo There is a catch, though The stop-start nature of the ramp-up process meant the new line was only 60% utilised in the five months to end-November It will take four ars to reach full capacity through a comion of domestic and export sales So, ng profit dipped as the depreciation and running costs of the new line were absorbed and exports were clinched at lower margins

Perhaps more importantly, the logistics hub managed an improvement in operating profit and returns off lower revenue and a smaller fleet size KAP says the division also completed an organisational redesign during November to further enhance returns I’ m not sure what the group intends doing with Unitrans Considering the debt levels, I’ m certain most shareholders would still prefer a sale

On the topic of sales, I was surprised to see small investment counter Sabvest Capital diminishing its stake in unlisted industrial business Apex Partners, cashing in R145m by reducing its holding from 46 4% to 40 6% I was even more surprised to note Sabvest’ s debt levels had been culled from R600m to just R160m after collecting the Apex proceeds and “other inflows” CEO Chris Seabrooke’ s nicely poised for 2025, I would think x

Ppower brokers by Natasha Marrian GAYTON MCKENZIE —

icture this: after the election this year the ANC opting as party chair Gwede Mantashe wanted to enter a governing coalition with the MK Party and the EFF instead of forming the government of national unity (GNU) in its current shape

NO DNA, JUST GNU

The PA leader and sports minister opens up about the Chris Brown tickets and why he is a big Ramaphosa fan

If that had happened the economic fall-out would have been severe, and aside from that, the subsequent political intrigue would have been harrowing Giving Gauteng premier Panyaza Lesufi what he wanted nationally would have been the final nail in the ANC’ s coffin

Months later, Floyd Shivambu and Dali Mpofu would defect from the EFF to MK, causing deep instability inside the new unity government

Worse, ANC insiders still loyal to Zuma would also defect to MK, en masse, with a clear path to government posts as part of his new outfit Zuma has never wanted a “ reverse takeover” (whatever that means) of the ANC He wa to replace it, and sharing power with it would be th way to achieve this The ANC and, more importantly, the state, would be on their knees now, mere months after the election

The above scenario was avoided, and no-one is more grateful for this than Patriotic Alliance leader Gayton McKenzie The sport, arts & culture minister is passionate about the GNU, having mapped out precisely such possible scenarios in the aftermath of the election.

He is a tough man to pin down after his entry i the government, with a gruelling schedule He tells the FM: “The president asked me how I am holding up just this week let me tell you, it’ s tough Coming from a corporate environment, I thought I worked hard I am not a lazy guy but the amount of work is insane ”

were reserved for the politically connected “A lot of bursaries were handed out by us in the past to people who did not truly deserve it it was based on who you knew But I want a child whose father or mother died for this country to be given opportunities the children of widows, of police, of soldiers, of firefighters those are worthy recipients of bursaries I am starting that now ” McKenzie’ s bursary initiative was launched after he gave away R2m in tickets to US singer Chris Brown’ s shows, a controversial move Nonprofit organisation Women for Change, which works to protect women from gender-based violence, called for a boycott of the shows, citing Brown’ s history of such violence

It was a tough call for McKenzie, given South Africa’ s alarming levels of attacks against women, one he made in consultation with his department’ s director-general

“I am the last person in the world to deny someone a second chance the opportunity to redeem themselves 10,200 le were employed this week due to that concert ok what it has done for our economy Giving Brown] a second chance allowed him to be a force for good he himself wanted us to give away the tickets ”

McKenzie describes the existence of the GNU as a revelation for him, delivered by the most important players in South Africa’ s political space: the voters

“I don’t think people understand the concept of a second chance, but this is the second chance voters gave, not to President Cyril Ramaphosa, not to Gayton, not to John Steenhuisen, but to all of us Voters said: ‘Here, take this and make it work’ We dare not fail them ”

Second chances is something McKenzie understands He was jailed for robbery and served a 17-year sentence, before turning to business, motivational speaking and, most recently, politics He feels he is living his second, and perhaps final, chance Despite his being a relatively nonstrategic cabinet post, McKenzie takes it very seriously He has backed local musicians and sports people and pushed for poor people to have access to opportunities through the arts

This week he began the department’ s annual handout of bursaries but gone are the days when these lucrative benefits

A politician looking for a second chance or perhaps a fourth or fifth is Zuma While McKenzie was close to the former president, he now describes the man he wrote a book about as “getting stranger by the day” McKenzie believes Zuma is out to destroy the EFF, and that this ttempt is likely to intensify in the coming year. Yes, Zuma poses a threat to the ANC too, he says, but there is one way for the party to survive “The ANC alone cannot beat Zuma The ANC alone cannot beat the GNU, only the GNU can beat Zuma and silence ANC critics If this government changes the lives of the people for the better, it is a recipe to beat Zuma If the GNU is successful, it nullifies everything Zuma says about the GNU being a sell-out ” He has warned the ANC to put aside its succession politics for the sake of the country and has urged the DA and its federal executive chair, Helen Zille, to “stop bickering”

“Let’ s send one message, and unite around this new thing in our country People are excited about the GNU let us deliver services like never before and grow the economy, ” he says

Another shift for McKenzie is his stance on Ramaphosa

“He is made for this moment One thing we all have in common [the ANC, the DA and the other GNU partners] is that we trust him we all trust him enough to know he won ’t stab us in the back Ramaphosa puts the country first he humbles me Everyone wants me to leave the GNU, but I will not Even if I am reshuffled, I will remain an avid supporter I believe this is the best possible scenario for the country I won ’t betray my country ”

McKenzie is a believer, yet there remain many in Ramaphosa’ s own party who are not It is no wonder the ANC’ s trajectory is downward; “country first” is no longer in its DNA x

Gayton McKenzie

letters

How to get SA growing again

South Africa’ s challenges are layered and complex But to execute vital structural changes, we need to address the three real constraints to South Africa’ s growth, the three SAs: serious attitude, aptitude and action

Attitude is probably the most important South Africa’ s survivalist mentality is understandable given our sociopolitical trauma and persistent inequality and poverty But in our government of national unity era, it’ s an impediment to growth People are sceptical, because they have been burnt too many times by promises of change that never materialised

But without a shift in mindset towards a collective acceptance that failure is not fatal, that change is necessary, and that progress requires risk-taking, South Africa will miss opportunities and struggle to move forward

The second constraint is aptitude South Africa has one of the highest unemployment rates in the world, yet at the same time businesses complain of a skills shortage This paradox is at the heart of the country’ s growth dilemma

To unlock the potential of our economy, we need a radical shift in the way we approach education and skills development More focus must be

online

Has South Africa learnt its lesson about consultants?

Pick any government department or stateowned entity Then do an audit to determine how much of the critical work is done by employees vs consultants The results will be fairly uniform I’ll leave you to guess what they’ll be Johan Prins

The constant carping about consultants is simply a smokescreen to obscure the identities of the real miscreants, the politi-

placed on critical thinking, problem-solving and technical competencies across government and business We must move beyond traditional, outdated measures of success, and nurture skills that are aligned with the digital, green and global economy

Finally, we need determined action to turn intentions into impactful outcomes We are a nation full of visionary plans and ambitious goals, yet time and again these fail to translate into meaningful results Addressing this constraint requires a culture of accountability, discipline and urgency We need to develop an almost obsessive focus on execution

and we need leaders across the public and private sector to set the course and ensure follow-through

No single policy or leader can solve these problems overnight But we can start by shifting the conversation, by encouraging a culture of accountability, continuous learning and action across every sector of society, every day right now

Adam Craker CEO, IQbusiness

My Stephen King tax moment

We have become inured to reports of inefficiency in government organisations, but when it manifests in a person who is supposed to have ethics and good standing it is a bitter pill to swallow I have had the same tax practitioner since 1998 and delegated my tax matters to him as he is a chartered accountant

To discover that he has abdicated his duties for the past five years and incurred enormous penalties for me from the South African Revenue Service is like reading a horror story.

One hopes that the authorities can impose some form of sanction for what surely amounts to dereliction of duty

Tony Ball Gillitts

cally connected people who engage the consultants’ services Dominic Rooney

How secrecy backfired at Steinhoff

Well done for pursuing this matter The public needs to know, not only the intricate dealings leading to the demise but more importantly the roles people played I am very interested to hear whether this all came “like a bolt from the blue” as Wiese claimed Philip Jansen

Surely this hocus-pocus has been going on long enough! Steinhoff was a public company I was a shareholder, and am

entitled to see how these clowns screwed us! Christopher Lang

Saving South Africa? It’s the economy, stupid

Pity Ramaphosa is so useless He will never be in a position to actually save South Africa He must step back and give the reins to the DA and the private sector to fix the economy Andrea Robertson

The ANC can deliver; it used to during the terms of Mandela and Mbeki The current ANC is failing because it has no connection with South Africa John Maleka

123RF/marisetio

at home & abroad by Justice Malala at home & abroad by Justice Malala

NO PARTY FOR YOUNG MEN

Worldwide, voters are choosing against leaders who have run out of ideas and time. Julius Malema could have inspired his followers with this vision. Instead, he remains in the past

If you looked below the noise and histrionics of the EFF’ s national conference (they had a self-aggrandising name for it “national people’ s assembly”) last week you would have realised that it was a battle between the past and the future It was a contest between remaining a splinter of a decaying ANC or being a possible ruling party

Julius Malema’ s actions in the run-up to the conference, and during the shindig, show that he has chosen to stay in the past, to continue to swim in the slipstream of the ANC and not to strike out boldly to speak to the core of his base, which is South Africa’ s marginalised and increasingly restless youth

Malema is missing a golden opportunity Across the continent and across the globe, populations are voting against incumbents who have run out of ideas and time. Parties of liberation in Africa and parties of the establishment across the globe face deep discontent and anger Citizens are seeking lean and hungry young men and women with new ideas for a new world with deep new challenges

I am not saying they are making the right choices, these citizens I am saying they are making the choices They are telling incumbents: you have pushed us far and you have pushed us for a long time, but this is the line, and we are going no further Malema and the EFF are perfectly placed to reap the rewards of this movement

Earlier this year Bassirou Diomaye Faye, a 44-year-old former tax officer, defeated the incumbent to become Senegal’ s president In Botswana, a 55-yearold has just unseated

a party that has been in power for 58 years In Kenya, William Ruto and the establishment are being shaken by young activists Venâncio António Bila Mondlane, the Mozambican opposition leader who many say won the October elections and was robbed, is 50 years old

Yet if you listen to the 43-year-old Malema and his rhetoric you will feel sad He speaks as if he is Jacob Zuma He is fixated on the ANC and its struggle history He sees, like the ANC’ s leaders, conspiracies and “Western agents” everywhere

While the EFF was holding its conference, the SACP was hosting its own “ special national conference” Those who attended sang lustily that they want socialism, while their Mercedes-Benzes stood waiting outside the conference centre They lambasted the government of national unity and reminisced about the glory days of the tripartite alliance

The SACP, like Zuma’ s MK Party, has little or nothing to offer by way of a theory

of change It hankers after a mythical, nonexistent, glorious past. It fights over the ANC’ s struggle history and the way to eat from the trough it has offered them

As the ANC continues to unravel, so will these old parties Without the ANC they are nothing, you see Malema should be rejoicing loudly at the departure of discredited has-beens such as Mzwanele Manyi, Dali Mpofu, Busisiwe Mkhwebane and the like from his party These are people clinging to the past, fighting old battles, and he should be no part of it Yet he has chosen to humiliate and freeze out fresh and energetic fellow EFF leaders such as Mbuyiseni Ndlozi

Malema should stop behaving like a leader of the ANC Youth League trying to “correct” the party from within Instead of setting the line of march for an energetic party ready to govern, Malema’ s closing remarks at the EFF conference often sounded like the gossiping of an ANC factional leader at a shebeen

The EFF has a unique trait it has managed to speak for frustrated young people If it were in better hands, it would drive home the key issues: unemployment among young and old alike, the stalled economy, the corruption that is eating away at the fabric of society, the young men and women immobilised in their homes by crime and corruption

These are winning themes

Yet the EFF is trying to seem like it fought the struggle against apartheid I mean, come on Malema was nine when Nelson Mandela walked out of prison

Why is he trying to pretend he was in Umkhonto we Sizwe, or that he is some kind of revolutionary leader? It shows that he has run out of ideas He is letting his moment slip away x

Julius Malema

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on my mind by Sanisha Packirisamy

10 ECONOMIC PLOT TWISTS OF 2024

The outcomes of these 10 surprises are set to ripple through the coming year, influencing everything from economic outcomes to market returns

As we draw the curtain on 2024, we are reminded of the unpredictability that has characterised this year ’ s economic and political landscape The reverberations of unexpected events have been felt through financial markets and political institutions alike in an era defined by deepening inequality and escalating geopolitical strife Here are 10 of the most unexpected developments that shaped our world in 2024:

1 The fall of incumbents In a global rejection of the political status quo, ruling parties faced unparalleled electoral defeats Voters, burdened by inflation and inequality, turned their backs on centrism, embracing more radical alternatives This marked the most significant shake-up in global politics in decades, leaving leaders to grapple with a profound shift in public expectations

2 Trump’s political renaissance Donald Trump’ s return to the White House stunned the world, not only because of the barrage of legal battles he faced but also due to the contentious policies that defined his first term With an adept campaign addressing economic discontent and job creation, Trump made inroads into unlikely bases of support Worryingly, his second term could shape up to be even more volatile than his first as he solidifies his grip on power by installing loyalists in key cabinet roles and leveraging a Republican “red sweep ” in Congress 3. Trump victory resets rates outlook. Trump’ s proposed economic policies have raised concerns over inflation and have led to expectations of higher terminal interest rates Futures markets have shifted from expecting nine rate cuts in the US by late 2025 to just three 4. Japan finally tightens the screws. The Bank of

Japan raised interest rates for the first time in 17 years in 2024, marking the end of an era of ultra-loose monetary policy in response to wage pressures hitting 33-year highs This move, compounded by domestic political upheaval, reverberated through global markets, disrupting the popular carry trade that had seen investors borrow cheaply in yen to invest in higheryielding assets

5 China’s fight against weak demand In stark contrast to the inflationary pressures experienced globally, China faced persistent deflationary challenges throughout 2024 While much of the world tightened monetary policies in response to rising prices, China deployed interest rate cuts and liquidity injections to stimulate demand Despite these efforts, domestic consumption remained constrained, compounded by a struggling property market However, China’ s export sector demonstrated remarkable resilience, buoyed by sturdy global demand and competitive pricing strategies.

6. South Africa’s energ y revival. After years of debilitating load-shedding, South Africa’ s power sector turned a corner The successful execution of the energy action plan revitalised Eskom’ s ageing power stations, boosted private sector participation in generation capacity and restored energy reliability, offering a much-needed economic reprieve

7. Voter discontent sparks political realignment in South Africa. In May, the ANC lost its majority for the first time since the end of apartheid, paving the way for a government of national unity This drama-

tic shift in South Africa’ s political landscape can be attributed to widespread discontent with the ANC’ s governance, failures in service delivery, economic stagnation and the rapid rise of the MK Party, which capitalised on these sentiments As a result of these changes, South Africa’ s political environment has matured, advancing collaboration across ideological lines to address pressing national issues and reshape the future of governance in the country

8 Inflation tamed to below 3% in South Africa. Declining food and energy prices contributed to cooling inflation, allowing the Reserve Bank to ease monetary policy Nevertheless, apprehensions remain regarding stubborn inflation in certain categories, particularly medical costs averaging 9 2% since 2009, along with electricity prices at 11 9% and water at 7 9%

9. A flurry of bills signed into South African law The signing of critical bills in 2024, including the National Health Insurance Act and reforms to the energy and transport sectors, reflected a concerted effort to address the pressing socioeconomic challenges facing the country But some legislative developments, such as the Pension Fund Amendment Bill and the Land Reform Bill, have been contentious

10. A vote of confidence in South Africa’s reform efforts S&P Global Ratings upgraded South Africa’ s outlook to positive, driven by political reforms, improved energy availability and stronger growth prospects This vote of confidence reflects the progress made under a unified government but also underscores the need for sustained reform momentum and fiscal discipline

The outcomes of these 10 surprises are set to ripple through the coming year, influencing everything from economic outcomes to market returns While some surprises may fade, others are likely to carry forward The pressing question now is how leaders will address the forthcoming challenges and leverage the opportunities that lie ahead x Packirisamy is chief economist at Momentum Investments

TRANSPORT

All stations to Cape Town

City says it is continuing its push for rail devolution but questions remain as to how it could be funded

Matthew Hirsch

● It makes sense for the City of Cape Town to take over the running of commuter rail, but there is a catch: it is very expensive This is according to Prof Stephan Krygsman, an expert in transport economics at Stellenbosch University

Earlier this month, the city announced it had signed a service-level plan (SLP) for rail with the Passenger Rail Agency of South Africa (Prasa) after extensive negotiations

This month the Cape Town council also approved its rail feasibility study, which began in 2022 and investigated the impact and implications of passenger rail services being devolved to the city

The study reports that lower- to middle-income earners would save an estimated R932m a year if trains were working as they should

Krygsman says transport is perhaps the most important element of local planning

“As the main purpose of local government is to stimulate economic development, ensure equitable and effective access to

employment opportunities and redistribute income, it only seems fair that the city should control all the transport modes under its spatial area of jurisdiction,” he tells the FM

But he points out that the various elements of rail must be considered, “including the physical track, the stations, the signalling, the coaches, the locomotives, the staff (operational and administrative), the management systems and so forth”

He adds: “The skills involved are not the typical ones you will find in a city government ”

Another big issue, says Krygsman, is what the city’ s focus would be: accessibility or the modes of transport “The success of rail, and in fact of all modes [of transport], depends a lot on where people are located If a lot of people live on the urban edge, they’ll require a lot of transport to employment opportunities But ultimately, the better option is to move them closer to employment or move jobs closer to them ”

Krygsman adds that the Gautrain receives a subsidy of about R1 6bn a year and its market is significantly larger “Cape Town will have to get a substantial subsidy allocation from the national government ” He says the city could also claim a larger share of the fuel levy to fund rail

It is important to view the entire transport system as a unit, he says “It’ s difficult to undertake a feasibility study for a single mode It’ s much better to determine the overall integrated intermodal system for the city, as the modes are sometimes substitutes and sometimes complementary ”

The topic of rail devolution was discussed in parliament recently Deputy transport

minister Mkhuleko Hlengwa said the department is working on a devolution strategy and that it will be workshopped when that work is done

“We must look at the key questions of affordability and practicality Can we afford to have nine Prasas? Does it form part of the strategic direction that is consistent with what we want to achieve? So there are many factors that we have to look at, but this work is under way, ” he said

The city’ s feasibility study reports that the passenger rail system has faced significant challenges because of theft, vandalism and operational disruptions, particularly during Covid These incidents cause substantial financial losses and

On the move: About 200 new electric trains have been delivered to Prasa across the country Cape Town says 36 have been sent to the Western Cape Matthew Hirsch

hinder network recovery efforts

The study proposes three possible ownership models. The first is that the city owns, operates and maintains the rail network, stations and trains, and absorbs Prasa personnel

The second is for the city to own all rail-related assets and concessions, the rail network and the stations, and for it to have responsibility for all train operations and maintenance

The concessionaire would absorb Prasa personnel The third suggestion is for the city to procure a large-scale integrated solution through a comprehensive concession

The city says the business plans should be completed by mid-2025

Our passenger rail plan cannot take only the current situation into account. It has to cater for future demand

Mayor Geordin Hill-Lewis told the city council this month: “Through these business plans, we will get a clearer idea of the viability as well as the possible funding strategies for each option We will also then have clarity on the kind of capital investment it will take to replace dated assets and expand the rail network Expansion is important, because our city is growing at a rapid rate Our passenger rail plan cannot take only the current situation into account It has to cater for future demand, whether this is through increasing the capacity on existing lines or expanding the service to new areas ”

A Prasa statement says the SLP is the first of its kind and represents a “partnership designed to harness co-operative governance” and is not an agreement on devolution

The national department of transport did not respond to questions x

ANOTHER WEEK

Prof

told the BBC

BY THE NUMBERS

SAVINGS ACCESS

How do you feel about having access to a portion of your savings before retirement?

Would

CHRISTMAS GALAXY This latest image from outer space has been called a solar system lights show for Christmas. It was captured by Nasa’s James Webb Space Telescope and for the first time shows an image of what our galaxy likely looked like as it was forming ‘I just love the sparkle galaxy with its Christmas lights shining as it was when the universe was just 600-million years old,’

Catherine Heymans, the Astronomer Royal for Scotland,

“Frelimo is not a political party; it’s a scheme to make business.”

João Feijó, a Mozambican sociologist, on that country’s recent and contentious election outcome

TRENDING

Assad and Astérix

Why a fondue-loving dictator is no longer a big cheese

Paul Ash

● In January 2012, as Syria burned, Asma al-Assad emailed her dictator husband, Bashar, about ordering a fondue set from Amazon “Pls can we get one?” she asked “Sure” , he replied “By the way harrods [sic] sent a few days ago, all done.” The “banality of evil” is an overworked phrase but one that fits the Assads like a Christian Louboutin shoe In between their online shopping, Assad was using chemical weapons against his own people and having dissidents tortured to death in a prison designed for the sole purpose of surveillance, terror and death

Back to the fondue, a running gag when Astérix the Gaul travels to Switzerland, circa 50BC In one scene, as Swiss rebels prepare to do battle with a Roman legion, one of the fighters hurriedly puts a cooking pot of cheese on the campfire, and says: “There’ll be just enough time to melt the cheese before the Romans arrive ”

DINNER PARTY INTEL...

The topics you have to be able to discuss this week

1. Sixty60 in the surf

Checkers is planning to extend its successful Sixty60 delivery service to the sea The first hint of the new service was seen on Clifton beach in Cape Town, where a jet ski painted in the same colours and logos as the ubiquitous motorbikes arrived out of the waves onto the beach The supermarket chain says it will let its clients know when the service is ready to deliver

2. Rugby diplomacy

Rugby is being used as a diplomatic weapon to checkmate China The Australian government has agreed to Papua New Guinea (PNG) joining the National Rugby League as long as it does not sign a security treaty with China The Australians will pay A$600m over 10 years to set up the team, which will be based in Port Moresby, the capital of PNG It is the first time the league has expanded beyond Australia

3. Snore no more

Did the Assads manage to squeeze in one last fondue before their Romans the rebel group Hayat Tahrir alSham liberated Damascus from the couple’ s threedecade tyranny? Perhaps the fondue set travelled with them to Moscow where their patron, Vlad the Bad, may or may not be tempted for a cheesy night with the couple, given the stink of humiliation that wafts from the Kremlin

All that money spent, all that advice, all those bombs and

all it bought is a tasteless Syrian refugee couple squatting on Russian soil

These are heady but dangerous days for Syria and the region Russia’ s trying to cut a deal to save its naval bases

The West is scrambling to make friends with the rebels, uncertain if another Libya or Iraq lurks in the shadows

Türkiye and Israel have sent tanks And in between are a whole bunch of rebel groups whose acronyms the world is just getting to know x

Snoring may soon be cured, judging from an experiment at University College London The university’ s Hospitals NHS Foundation Trust has developed an app that controls a tongue implant The device stimulates the hypoglossal nerve in the tongue, using a tiny neurotransmitter that is implanted under the skin and allows unobstructed breathing and no snoring A scientist described it as “ a pacemaker for the tongue”

Assad out: A billboard in Damascus with a picture of Syria’s Bashar alAssad shows damage by bullets after his ousting Reuters/Ammar Awad

DIAMONDS & DOGS BY JAMIE CARR

A very merry AI

2024 will be remembered by market watchers as the year when the only game in town worth getting excited about was AI

If you spent the year long in AI and all those that provide the backbone to the project, prepare yourself for a very merry Christmas; the bonus will be mighty and Santa will be flying the reindeer straight to your chimney to fill the stockings with swag If, for some perverse reason, you found yourself on the short side, then you ’d better be hoping for a Good King Wenceslas to be looking out in your general direction

Nvidia has been leading the way among the makers of the mighty chips required to enable vast quantities of data crunching, with its share price up 180% in the year, but Broadcom hasn’t exactly been a kick in the teeth for investors, with its price up 90%, nudging its market capitalisation up to $1-trillion

Broadcom’ s share price jumped 20% when it announced that its AI revenues were up 220% in the year, and its CEO, Hock Tan, predicted that by 2027 Broadcom ’ s AI market would be somewhere between $60bn and $90bn, compared with the current $20bn

Dents in German cars

The years when German industry was the proudly beating heart of the European economy are looking like a fond memory, as it approaches the festive season in a mood that’ s less “joy to the world” and a lot more “in the bleak midwinter”

It used to churn out products that flew off the shelves around the world, benefiting from cheap Russian gas and an engineering heritage second to none, but now, with the announcement of a second consecutive year of negative GDP growth, it’ s looking like the sixstone weakling preparing to get sand kicked in its face

There’ s been an endless stream of bad news from the manufacturing sector, with iconic names like Thyssenkrupp announcing widespread redundancies, and the 200-year-old shipyard Meyer Werft needing a $423m public bailout to avoid bankruptcy.

good week

Joe Coetzer is not someone who is easily put down by a disability The policeman lost his right leg last year after he was hit in a shoot-out with cash van robbers in Louis Trichardt The police shot dead 18 robbers in the incident Coetzer, despite already being shot in a hand, kept firing back at the robbers He was later hit in the leg and surgeons battled till late in the night to save it, but in vain Coetzer was a lieutenant-colonel at the time but has been promoted to a full colonel He is now in charge of a Hawks unit, where he runs its planning and training And he still plays golf x

bad week

It’s approaching the festive season in a mood that ’s less ‘joy to the world’ and more ‘in the bleak midwinter’

Chipmakers have been an easy first course for investors to tuck into, as are the energy utilities that are going to have to provide the vast quantities of power required to support AI’ s ravenous appetites The next phase of investor focus is likely to be the companies that can sell AI-enabled products, such as software and IT services companies, before moving to industries that will be transformed x

With reports predicting that 20% of German industrial production is in danger of disappearing by 2030, it’ s no surprise that Porsche SE, the holding company of the Porsche-Piëch family, has joined in the wailing and gnashing of teeth with the announcement that it is writing down the value of its stake in Volkswagen (VW) by 40% and its stake in Porsche AG by a third VW is locked in a mighty battle with union IG Metall, which is a long way short of gruntled with the company ’ s plans to close factories and lay off tens of thousands of workers

Since the pandemic started, VW’ s market share in China has nearly halved as local brands such as BYD have become increasingly competitive Drastic change is required to make sure the people’ s car has a future

Thousands of passengers were greeted with “delayed” notices alongside their flight numbers at OR Tambo airport last week, yet the Airports Company South Africa (Acsa) took no responsibility for it Like a Marie Antoinette of the jet age, Acsa CEO Mpumi Mpofu was unmoved Her state -owned company, not known for its competence or efficiency, made a dismissive announcement to passengers: “Please contact your airline ” As if the airlines were responsible for the fuel bowsers and the faulty valve that was the cause of the delays and disruptions involving 17 7 flights and 22,073 passengers x

MARKETING It’s raining data

How Shoprite’s precision retail media approach may turn the supermarket group into an ad business

Andrew Thompson

● Shoprite again posted impressive results this year, largely driven by strong sales at its Checkers, Usave and Shoprite stores

Growth was robust: customer visits increased by 4 5%, the average basket size grew by 6 9%, and the number of products sold reached 7 4billion

An analyst would likely tell you that Shoprite sold more products than its competitors, achieved better margins and boosted its performance through operational efficiency and affordability across income groups

At a Sunday braai, however, conversation likely turns to more anecdotal observations: the fun new bubble tea store inside a local Checkers, the sight of omnipresent Sixty60 deliveries or the unbeatable deal on the boerewors

But behind much of this growth lies a less publicised, more intriguing, development: Shoprite’ s rise not only as a supermarket giant but also as a media and advertising powerhouse This is thanks to its Rainmaker Media division, which generated millions in the past financial year

The idea of a supermarket

also functioning as an advertising company may seem unusual Deeply simplified, traditional retail advertising rands flowed outward, spent on space in newspapers and on radio and TV This approach, often called “ spray and pray ” , aims to put ads in front of as many people as possible, in the hope that some would heed the calls

But retail behemoths like Amazon and Walmart realised the goldmines of data they were sitting on, generated by the increase in digital payments, loyalty programmes and online shopping

Locally, Rainmaker did much the same, almost as the pandemic took hold It now reaches and understands 81million South African shoppers monthly, processes 1 1-billion transactions annually and tracks 500-million baskets

All of this is small fry compared with its global counterparts, but trendsetting for the local retail industry that has for decades relied purely on starshaped cutouts in the snack aisle and digital in-store displays at till points And though all major retailers in South Africa still use this in-store advertising technique, it’ s hardly surprising that retailers with access to extensive, clean data

are shifting from traditional mass advertising to more targeted, data-driven strategies

Sitting on this much data puts retailers in an immensely powerful position one that also generates significant revenue This is perhaps why any precision retail media businesses will also quickly point out they aren ’t the only winners in this scenario

“With retail media, there are three key stakeholders: the retailer, the brand and the customer,” says Rainmaker MD Tanja de Korte “The retailer gains additional high-margin income, the brands receive more targeted advertising, and the customers benefit because the ads are more relevant ”

Who gets the best slice of the pie depends on your level of scepticism and willingness to dig into the annual reports But it’ s impossible to ignore that this trend is gaining momentum; market research firm eMarketer forecasts that omnichannel retail media adspend in the US will reach $129 9bn by 2028

The numbers are less clear in South Africa, where the concept is still in its infancy However, in its annual results, Shoprite lists “marketing and media” , to which Rainmaker Media contributes the lion’ s share, as its fourth-largest revenue stream, with an income of R473m

Undoubtedly, Shoprite and

its shareholders stand to benefit the most As De Korte notes, Rainmaker is essentially a business-tobusiness player tapping into lucrative high-margin income streams.

Suppliers that can afford to participate also benefit from increased visibility and more insightful analytics on their advertising campaigns

“Rainmaker is a media sales business, and we want to connect the right people to the right products,” says De Korte “It’ s like a dating service for brands and customers ”

Whether customers feel like they’ ve met their match likely rests on how uncomfortable they feel about their myriad data points turning them into the product

Every time shoppers swipe those Xtra Savings cards a phenomenon which occurs 2,500 times every minute they’ re contributing a small piece to the growing retail media puzzle But becoming the product is easier to forget, if not forgive, when it means seeing fewer irrelevant ads and receiving more personalised discounts on items we thought we were going to buy anyway

Marketing Intelligence Hub business analyst Nilesh Hansjee calls Shoprite’ s approach “ a clever, almost visionary way of monetising data”

“If you ’ re not developing a retail media arm, you ’ll struggle,” says Hansjee “It’ s a smart way to diversify revenue streams and reduce reliance on core retailing ”

As long as consumers are aware that their data is being used, and suppliers have the resources to elevate their brands, everyone stands to gain except, perhaps in the long term, the media formats that have long been dependent on more traditional advertising, like the very publication you ’ re now reading x

● Sarika Lakraj-Naidoo did the right thing. She didn’t ignore the corruption that was happening around her at the City of Joburg; she chose to fight it

Five years later and LakrajNaidoo is paying the price She has been threatened, survived an assassination attempt and can ’t find work because she has been branded a troublemaker

Her story is a typical one that has been repeated across the globe where whistleblowers do what is right but end up threatened, financially ruined and sometimes dead

Nevertheless, Lakraj-Naidoo and fellow South Africans Dorothy Mmushi and Mbuso Ngcobo have been internationally recognised for their sacrifices They are winners of the Blueprint Africa Whistleblowing Prize for 2024

Mmushi was a fraud investigator at Eskom who had a hit put out on her after she began looking into corruption activities at the parastatal Ngcobo was a key witness in a criminal corruption investigation of the mayor of Durban.

Blueprint, the organisation honouring them, is an international NGO that supports free speech and has recognised whistleblowers since 2016 It is an award that is a nod to the bravery and integrity of whistleblowers and each winner receives a trophy and a cash prize Past winners include Chelsea Manning, a trans woman and former US soldier who leaked sensitive documents on the wars in Iraq and Afghanistan; Daniel Ellsberg, known for releasing the Pentagon Papers, secrets of the US war in Vietnam; and Tesla whistleblower Lukasz Krupski, who revealed the working conditions at the carmaker “All of our winners this year have shown real bravery, all have experienced retaliation,

and some have been left in fear for their lives Just a couple of years ago South Africa’ s Zondo commission called for effective legal protection for those who speak out Unfortunately, we ’ ve yet to see real changes on the ground, which makes the example set by this year ’ s winners all the more important,” says Suelette Dreyfus, executive director of Blueprint for Free Speech and a member of the judging panel

Lakraj-Naidoo was the CFO for Joburg’ s department of public safety when she began noticing irregularities in 2019 “The first time I noticed

things were going incredibly wrong was with the integrated operations centre, where millions of rand were being spent for equipment and we paid a company for a platform that was never delivered,” she says

She also flagged an incident where a single BMW was being leased for R48,183 a month, a cost that ordinarily would have covered seven BMWs at that time

Then there was the R200m worth of fire trucks that weren ’t delivered Lakraj-Naidoo reported this to then mayor Geoff Makhubo “And he

PROFILE

The cost of

courage

She has been threatened and can’t find work but now at last she has also been rewarded

then called me up and he said: ‘Well, Sarika, you ’ ve got a fiduciary duty, and you need to report this,’” she says Lakraj-Naidoo did report it and other irregularities to the value of R8 2bn at the City of Joburg She approached the city’ s group forensic & investigation service (GFIS) Instead of action, she was suspended and in June 2023 dismissed after a disciplinary hearing

The bargaining council later found that she had been unfairly dismissed “I went to arbitration where I was cleared of all the misconduct charges, and part of my arbitration award says that I have an outstanding record,” she says But the damage had been done; she couldn’t get her job back

She also began fearing for her and her family’ s lives

There were incidents of intimidation “They tried to get my son out of school by phoning the school and telling them that his mother was ill and that other people would come to fetch him,” she says

Then there was a shooting, where she was forced to abandon her car and flee For safety she moved around, sleeping at different places Friends avoided her

When Zenzele Sithole, an investigator at the GFIS, was gunned down in his car in an apparent hit, Lakraj-Naidoo says they found dockets related to her cases in the boot

Lakraj-Naidoo also couldn’t find work “We [whistleblowers] are labelled troublemakers Nobody would give us jobs because they think that we are too dangerous, because it’s obvious that a lot of companies pay bribes to get government business,” she says

But the international award is good to get “It was uplifting for me to be recognised in the international arena in terms of just doing what is right,” she says But she says she would be reluctant to do it all again The cost was just too high x

Shaun Smillie

Sarika Lakraj-Naidoo City of Joburg whistleblower

FEATURES

22

MASTER OF DESTRUCTION

How to go from good to great (or, indeed, one of the greatest of all time): what business leaders can learn from the Springbok coach

The list of newsmakers is not short of contenders, but Trump made himself the most talked-about person on the planet in 2024

By returning from the dead this year at the head of MK, Jacob ‘Zombie’ Zuma has demonstrated there is still plenty for us to be afraid of

Sam Sithole of VCP likes to take a constructive rather than an acrimonious approach in his dealings with target companies

The easy part is picking a strategy and plan, and getting the best people to execute it The hard part is going from good to great (or, indeed, one of the greatest of all time) Here’ s what business leaders can learn from the Springbok coach

David Williams

Perhaps the greatest of Rassie Erasmus’ s contributions as Springbok coach has been to establish that rugby is not a 15-man game, though the laws still say it is This simple insight has been revolutionary It has changed the way the game is played or the way South Africa plays the game, anyway, while other rugby nations strive to understand and so catch up

If there is one man with whom just about every CEO in South Africa would like to have lunch, it is Erasmus There is so much to learn from a man who has made South Africa feel more united and happy than anyone has since Nelson Mandela; who has turned racial transformation from an intractable obstacle into a non-issue; who has shown how to turn strategy into consistent and successful execution; and who is able to get talented people to relax and be themselves, but also to

THE RUGBY REVOLUTIONARY

play as a team and deliver their best under extreme pressure

To understand where Erasmus has taken the game of rugby, we have to understand where it was coming from

The first rugby international was a 20-a-side match in 1871 between England and Scotland In 1877 the number of players in a match was reduced to 15 a side, where it remained for another hundred years. During that time, substitutions were seldom allowed for injury If a man had to go off the field, his team carried on without him

There was something heroic about this: being outnumbered and insisting on continuing with the match In 1964, the Springbok wing Jannie Engelbrecht broke his collarbone playing for Western Province in a Currie Cup match against Northern Transvaal With substitutes not allowed, his captain refused to let him go off With one arm hanging uselessly for much of the second half, Engelbrecht scored two tries to take Province to a 16-11 win

But serious injuries were less frequent in those days In the 1970 series between the Springboks and the All Blacks, physically one of the hardest of

M ore important than his approach to selection is Erasmus’s communication of it

all time, the Springboks used only 21 players in four Tests

It was a strange paradox that as rugby became more professional and less dirty (in the sense of deliberate foul play), it became more violent As the top players became bulkier and better conditioned, tackles and collisions happened with greater pace and force The injury toll mounted

In the 1980s, it was conceded that substitutions needed to be allowed for genuine medical reasons In South Africa, the substituting player had to hand the referee a note from a doctor certifying that the player who had gone off could not continue Of course this system could not last It was impractical and open to abuse

And so the principle of substitution was accepted It was actually no longer a 15-man game The game’ s administrators eventually settled on an eightman reserve bench at top level, with substitutions for injuries but also, in effect, for tactical reasons Coaches would try to cover all bases: a tight forward, a loose forward, front row, halves, utility back But it was understood that these were reserves: the best XV would start the game, and the best XV would be picked for every game if possible That’ s how selectors, coaches, players and the media saw it

However, Erasmus went beyond thinking of the eight-man bench as reserves He saw them as equal members of the team He invented what became known as the bomb squad an apt nickname, not least for its capacity to intimidate the opposition By picking seven forwards and one back, instead of the customary four/three split, he was able to bring on virtually a full pack of fresh forwards in the second half

Defeated opponents, notably England, complained But there was nothing in the laws to prevent it It has proved devastatingly effective, especially when the world’ s best player in a position like hooker Malcolm Marx rumbles onto the field as a “substitute”

The bomb squad’ s effectiveness is linked to another, less obvious aspect of Erasmus’ s innovative genius his approach to selection

Kitch Christie, who took the Boks to unexpected World Cup glory in 1995, was once asked what the most difficult aspect of coaching was He replied: “Selection ”

Christie regarded Tiaan Strauss as one of the two best flankers in the country, but believed there was not room for both Strauss and captain Francois Pienaar in his World Cup squad As Kobus Wiese, lock forward in that 1995 team, put it: “The decision wasn ’t about how good or bad Tiaan was as a player Kitch knew exactly how good he was, but he felt that the team dynamics demanded he make a different decision ” In essence, Christie felt he could not accommodate two captains in the side

Such dilemmas have plagued coaches for much of the past three decades. The approach has always been to keep picking your best 15 available players, backed by eight substitutes usually while agonising about who to leave out Changes from match to match were made only when forced by injury

Erasmus has blown all that away He has built a squad of about 50 players, the equivalent of more than three genuine Springbok teams This is unprecedented anywhere He has demonstrated that there is a torrent of ability available in South Africa to support this policy, as long as the fresh talent is backed and allowed to prove itself

Erasmus knows what his predecessors always knew, in a strong rugby nation like South Africa: sometimes there is nothing to choose between two or three players even four in a position But Erasmus solves the problem by picking them all and rotating them There are certainly exceptional, once-in-a-generation talents like lock Eben Etzebeth but

for most players, Erasmus has shown how arbitrary it is to pretend to select one “best” XV

Erasmus has taken his tactical opportunities, but he also knows that injury is still a factor in substitution, perhaps now more than ever Players are better conditioned and the laws that protect them for example, from being tackled in the air have been tightened But nobody is immune to concussion A head injury assessment can mean weeks or more out of the game all the more reason to ensure that blooded players are ready to step in

More important than his approach to selection is Erasmus’ s communication of it He has persuaded his players that when they are omitted, they are not “dropped” In the Erasmus Bok side, starting a match is no particular honour and being omitted is not necessarily a rejection It all depends on the needs of the team

coach and administrator for nearly 50 years, liked to say that when a player of genius emerged, like flyhalf Naas Botha or centre Michael du Plessis, the wise coach will just let him play and not try to mould him to a pattern “Otherwise,” Doc said, “ you might as well try and turn my dog Bliksem into a fullback.”

Christie, successful at every level of the game, was known as a people’ s coach “Kitch was an honest person and an honest selector, and the players responded to him because of that,” said Wiese “He was also very good at understanding people and what made them tick That was how he got the best out of you ”

Erasmus himself has written (in Rassie: Stories of Life and Rugby, with David O’Sullivan) that “ a coach has to have a proper, open communication system with his players Whatever is going on, or decided in the boardroom or at selection meetings, if the coach isn’t consistently giving the players information, then all they get is rumours and misinformation through other means like social media ”

Of course there has to be a solid rugby foundation At the highest level, good strategy, fitness, exceptional skills and effective teamwork are almost taken for granted But there are exceptions

Source: Sumantra Ghoshal

A further aspect of Erasmus’ s approach is that he encourages players to exploit their talent to the full, rather than being pigeonholed into playing a particular role His lock forwards must do their job at the lineouts, but they also roam at pace, handle like backs and score tries from open play as Franco Mostert and Etzebeth did in the 45-12 thrashing of Wales in November Flankers coming off the bench can play centre, fullbacks can take over at scrumhalf

Etzebeth is 2 03m tall and weighs 117kg but was able to keep pace for about 40m with the flying winger Kurt-Lee Arendse before taking the latter’ s pass to score Erasmus’ s rotation policy means he can rest his older star players (Etzebeth is 33) more often, and so prolong their careers and help them retain their enthusiasm

All the great coaches have known that they must treat players as individuals Danie Craven, Springbok player, selector,

In 2000, Springbok coach Harry Viljoen went into a Test match against Argentina instructing his men not to kick at all self-evidently a poor strategy to everyone but Viljoen The team mutinied at halftime and managed to avert defeat Viljoen resigned after just 11 Tests.

Another short-lived tenure was that of Carel du Plessis, coach in 1997 when Erasmus made his international debut as a player Du Plessis, who was known as The Prince of Wings in his playing career, paid the price for a 2-1 series defeat by the British & Irish Lions with dismissal after just eight Tests

“The problem was that he just couldn’t explain his rugby vision to us, ” wrote Erasmus “When Carel told us his game plan, big English words came out of his mouth He was a brilliant player and was highly intelligent in his understanding of the game, but we simply couldn’t see what he saw The way he explained spaces on the field was almost scientific We didn’t have time to adapt to his style of play ”

Which brings us to what business leaders can learn from Erasmus In rugby, as in leading companies, the easy part is decide on a strategy and plan, and find the best people to execute it The

cover story / newsmaker

really hard part is to get those people to actually do what you want them to do, while reaching the highest possible level of team performance to go from good to great, as management guru Jim Collins put it.

The traditional 20th-century business school way to run a good company boiled down to endless advice on:

● Strategy what you choose to do If you are in mining, do you disinvest from platinum in favour of copper? If in retail, do you engage in a price war to gain market share?

SPRINGBOK COACHES WITH 50%+ TEST WIN RECORD SINCE READMISSION IN 1992

Name (number of Tests)

Kitch Christie* (14)

Rassie Erasmus** (39)

Nick Malle (38)

Jacques Nienaber (39)

Heyneke Meyer (48)

Jake White* (53)

Peter de Villiers (49)

Andre Markgraaff (13)

● Structure what you put in place to support your strategy Do you need a new department to deal with changing market conditions? How much responsibility is delegated from head office? How do you prevent duplication and “wheelspin”?

Harry Viljoen (11)

Rudolf Straeuli (23)

Won World Cup * | Won World Cup x 2 **

set period? Does your strategy align with your broader purpose?

● Systems how you ensure that the wheel does not have to be reinvented every day How do you simplify chains of command and decisionmaking? How do you monitor, measure and reward the company ’ s performance and the contribution of individual employees?

The problem with this approach is that it lends itself to rigidity in some environments It may be appropriate for a mechanised production environment, or a railway network where efficiency, punctuality and routine safety measures are essential However, systems and structure might easily be destructive in a place where creativity is important, like a fashion design company or an advertising agency or a rugby team Prof Sumantra Ghoshal of the London Business School argued in the early 2000s that while the “three Ss” were useful, they were an outdated management doctrine In the 21st century, he said, a new management philosophy was needed: that of the “three Ps” : purpose, process and people

● Purpose focuses more on the outcome Allows more agility and flexibility when strategy needs to be adapted in changing circumstances Ghoshal argued that if a company ’ s values are only self-serving (which strategies tend to be), they lose appeal for both employees and customers Is your strategy signed off and then regarded as immutable for a

● Process less rigid than a structure usually is A focus on process is likely to emphasise collegiality above bythe-book practices Do your employees find themselves operating in silos, unable to interact with the appropriate problem-solver? Does your organisational hierarchy forbid questioning those in authority, or does it prefer a process where rank is less important than creativity or disruption? Do you encourage risk-taking?

It is a different kind of gift, as a coach, to get others to share your vision and selflessly commit 100% to the common goal

● People accepts that people might need to work within systems to some extent, but they should not necessarily be subordinate to them Does your company insist that people fit the job descriptions generated by the system, or does it adapt the requirements to the individual? Another example: does your system of performance review depend more on scores and box-ticking than imaginative empathy? Ghoshal believed companies “should shift from a purely transactional relationship with their employees to one that fosters mutual respect, commitment, and a sense of belonging” The key point, Ghoshal believed, is

that “ many people make the mistake of treating the three Ps as substitutes; they are not The trick is to supplement the Sdoctrine with the P-doctrine ”

It should be clear by now that while Erasmus understands the importance of the three Ss and relies on them as a foundation, he is really operating fully in the world of the three Ps. Most rugby coaches are still in the realm of the three Ss because it seems so secure and safe

This is how Erasmus is able to focus on each individual player, working out not only how he can contribute to the team (which is essential), but also how to get the best out of him That means giving the player permission to make mistakes and, perhaps the most difficult step of all if you are genuine about it, trusting him None of this is encouraged by the three Ss, but it is almost mandatory under the three Ps

Nick Mallett coached the Springbok to 17 successive Test victories, equalling the record set by the All Blacks He described Erasmus as “ a broken-field specialist In an instant he would sum up a turnover situation or an intercept situation None of the players could read a game the same way Rassie could ” Mallett described Erasmus as a genius when he was a player It is a different kind of gift, as a coach, to get others to share your vision and selflessly commit 100% to the common goal It is such a team that can create single-point victories, as the Springboks did in three successive knockout victories in taking the World Cup in 2023. That was not luck It was the product of an environment where individuals could express themselves without fear of failure

The need for renewal in organisations, wrote Ghoshal, “ comes from the fact that work environments are full of constraints, control, compliance and contract This makes it difficult for employees to show initiative, learning, experimenting, or co-operation The context has to be renewed It must move from compliance to discipline; from constraint to stretch; from control to support; and from contract to trust ”

The professor might have been describing what Erasmus has achieved with the Springboks And, as Mallett said: “Rassie got the gees going; he was good at that ” x

The list of newsmakers of the year is not short of famous (and infamous) contenders

Paul Ash

T“here is only one thing in life worse than being talked about,” Oscar Wilde wrote, “and that is not being talked about ”

Nineteen words which appear to sum up why Donald J Trump had to be president again, thereby making himself the most talked-about person on the planet in 2024 To be named Newsmaker of the Year is not an accolade that signifies approval, as Time magazine is always at pains to point out with its Person of the Year award (2024: Trump)

Trump: the man who should have been the real gone kid is the comeback kid The first convicted felon to win a US presidential election, loser of the popular vote two out of three times, a TV-made narcissist consumed, it seems, by two things: getting even with the people who showed him the door in 2020, and proving his bully dad wrong He is perceived as vengeful, bigoted, ignorant and dangerous, and that is who he is It tells us something about the 77-million people who voted for him

Not that the list of newsmakers of the year is short of contenders In no particular (dis)order, then

Kamala Harris. Not the comeback kid. Despite raising more than a $1bn for her too-short election campaign, Harris was really riding on gossamer waves of wishful, magical thinking, with no better message than “the prosecutor vs the felon” Also, the fact that 90-million Americans didn’t vote 90-million! screams louder than any incel with a podcast: the country would rather settle for four (or more) years of chaos and hate than let a woman be president

Volodymyr Zelensky The comedianturned-president of Ukraine The Jack Russell terrier of presidents, always in green fatigues and combat boots as he begs the West for more weapons to stop the Russian meat grinder This was the year that should have turned the Red Tide as F16 fighter jets and Leopard tanks appeared on the battlefield, but it was not to be As the Trump presidency looms, even the Ukrainian leader is now mulling Western troops being deployed as peacekeepers while the Russians get to hold

conquered ground

THE

COMEBACK KID

E Jean Carroll The journalist and former Elle magazine advice columnist, who sued Donald Trump for defamation and battery in a New York court in 2022, and was awarded $5m In 2023, judge Lewis Kaplan issued a partial summary judgment finding Trump liable for defamation In January 2024, the jury verdict saw Carroll awarded $83m in additional damages Will she ever see the money? Don’t hold your breath

Alexei Navalny Russian dissident who survived poisoning, allegedly at the hands of Vladimir Putin’ s enforcers, recovered in exile before making the unwise decision to return home to Russia, and was promptly rearrested He died in the Arctic “Polar Wolf ” penal colony, as far from Moscow in kilometres and mind as you can get, while “taking a walk” That’ s like the Chris van Wyk poem Death in Detention: “He slipped on a piece of soap while washing … ”

Benjamin Netanyahu Comeback kid 2 The longest-serving prime minister of Israel, with 17 years in the hot seat From negotiating with Palestine Liberation Organisation leader Yasser Arafat during his first term in the 1990s, he has moved steadily to the right while he employs Jacob Zuma-like tactics to avoid appearing in court on corruption charges Sending the Israel Defence Forces into Gaza in late 2023 and pledging they will stay in the enclave “ as long as necessary ” , even as its people starve, has earned him an arrest warrant from the prosecutor of the International Criminal Court as an alleged war criminal

Keir Starmer The Labour leader who led his party to a crushing victory over the Tories in July will probably spend

Christmas ruminating on the fact that it’ s much more pleasant to be attacking the government than it is to be the actual government Setting aside for a moment his apparent befuddlement over the outrage of his scoring free concert tickets and a luxury apartment for his son to study in, the UK prime minister now has the desperately unenviable and futile job of trying to suck up to Trump and/or making friends with Europe again Meanwhile, the sewage-filled rivers in his green and pleasant land risk becoming a metaphor for his administration

Kim Jong-un The original Rocketman, loved by Trump, fêted by Putin, gazed upon warily by Xi Jinping That this agrarian economy, otherwise known as the Democratic People’ s Republic of North Korea, has been scaring other countries with its missile launches would almost be something to marvel at if it weren ’t so dangerous And at the centre of it all is the roly-poly Kim, always surrounded by grinning, gurning sycophants with big military hats and notebooks at the ready to scribble his “thoughts” 2025 is going to be his year, one way or another

Elon Musk Rocketman the second This has been a wild year for him, his shareholders and just about anyone else in his, er, orbit Now self-appointed “first buddy” to the 47th president of the US, it’ s unclear how long it will take before these two planet-sized egos collide in a fury of flaming gas and flying asteroids Meanwhile, all eyes on Musk as he vows to cure the federal government of its wasteful expenditure tendencies And as he goes, we should remember that he warned 2024 would be the last fair US election Whatever did he mean? x

Getty Images / Brandon Bell / 123RF

cover story / politics

By

returning

from the dead so dramatically this

year at the head of the MK Party, Jacob ‘Zombie’ Zuma has demonstrated there is still plenty for us to be afraid of

Natasha Marrian

Jacob Zuma finally has what he wants: an organisation he can mould in his own image according to his own needs and instincts

Gone are the constraints of the ANC’ s “democratic centralism” , elective conferences and term limits; Zuma’ s version of the ANC, the MK Party, is his and his alone

The seismic impact of his new creation in the election was unprecedented from a standing start, the new party picked up 14% of the vote nationally and an astonishing 45% in KwaZulu-Natal This was almost entirely attributable to the cult around Zuma, which makes him the standout choice as the FM’ s political newsmaker of the year

If they were ever implemented, the party’ s core policies would destroy South Africa as a country, as well as its standing in the world as a modern democracy Its plans include doing away with the secret ballot and requiring voters to publicly place their ballots in drums assigned to political parties; expropriation of all land without compensation and placing it under the custodianship of the state and traditional leaders; scrapping the 1996 constitution in favour of parliamentary sovereignty (as in the days of apartheid); nationalisation of banks, mines and major financial institutions; and holding a referendum on the death penalty

Zuma’ s political obituary has been written before First, when Thabo Mbeki axed him as deputy president due to the arms deal stigma that surfaced in the corruption trial of Schabir Shaik; and more recently when he was forced to step down as president in the face of state capture testimony at the Zondo commission evidence so overwhelming that even the ANC could not continue to ignore it

In 2018 it was widely assumed that South Africa had finally closed the Zuma chapter but once again those who had buried him had to eat their words His political resilience and

THE MASTER OF DESTRUCTION

popular standing were underestimated, not least by the ANC itself, as was the importance of ethnicity in our politics

Almost single-handedly, Zuma’ s new party precipitated the stunning fall in the ANC’ s national support from 57% to 40% and the loss of its overall majority in parliament after three decades in power

In the Zuma heartland of KZN, ANC support plunged to just 17% in May This was a clear demonstration of the ethnic nature of Zuma’ s appeal; he also secured large chunks of the Zulu vote in Mpumalanga and Gauteng

Through painstaking negotiations, the ANC retained a place in the KZN government, forming a coalition with the IFP, the DA and the National

Freedom Party (NFP)

It is this tenuous agreement that dictates the fate of the country if it were not for the need to keep the DA onside in KZN, the ANC would long have abandoned working with Helen Zille and John Steenhuisen at a national level

A stark danger for the ANC and for the country is a Zuma with access to state coffers, even if only at a provincial level in the short term

It was Zuma, after all, who spearheaded the shift in the governing party from being a mass-based, communitylinked movement into a patriarchal, elitist, nationalist organisation feeding off taxpayers via state structures With 45% in KZN, Zuma and his party can

almost taste the riches in the provincial trough; their snouts are prevented from plunging in only by the collaboration of the DA and NFP with the ANC

Zuma’ s party has so far been predictable its intellectual thrust is shallow and its organisational and parliamentary processes are chaotic

Floyd Shivambu, previously hailed as the brains trust of the EFF, is no Joel Netshitenzhe, Kader Asmal or Pallo Jordan the kind of thinker the ANC was accustomed to in its glory days After defecting to the Zuma camp, Shivambu has been thrust into the centre of MK’ s growth attempts as its general secretary and organiser This is despite his failure to grow the EFF into a potential governing party in its decade of existence

Zuma is fully aware that his party may have reached peak Zulu support, which explains Shivambu’ s recruitment Shivambu hails from Limpopo, another populous province and one where the MK Party would like to make inroads into the ANC’ s popularity

Zuma’ s re-entry onto the political stage has been dramatic, but can he sustain it?

Over the weekend, his party held its first anniversary celebration at Moses Mabhida Stadium in eThekwini, which is an MK stronghold The stadium was halffull at best, but does that matter? The EFF and the ANC both drew capacity crowds at campaign rallies at the stadium this year, yet their results at the ballot box were derisory (The EFF won 2% in the province ) So the science of stadiumology falls flat.

The biggest risk for MK is Zuma himself He will be 88 when the party contests its next national election The acid test of future growth will probably be the local government elections in 2026

No other single leader in South Africa could capture the Zulu vote the way Zuma has Many suspect his party’ s lifespan is the same as his own But others believe MK could survive on its own merits as a populist party with appeal for the millions who are suffering due to the dire socioeconomic situation However, even with Zuma still at the helm, the party is in chaos heavily factionalised, with parallel structures that are only legitimised by Zuma himself, when he is well enough to deal with organisational matters

He has declared that MK will not hold an elective conference, so he will remain all-powerful It is a recipe for implosion and further factionalism Already there have been a number of court cases One

involved former members who were unilaterally removed from parliament Another was brought by religious leaders who campaigned for the party but were ignored when plum posts were distributed after the polls and then were expelled Both the 10 former MPs and the All African Alliance Movement’ s bishops Sophonia Tsekedi and Meshack Tebe won their cases against the party

Given Zuma’s disdain for the judiciary, he is unlikely to adhere to the court rulings He made clear how he views courts in a meeting with the ANC’ s top officials in 2021 The transcript of that meeting, held virtually, sheds light on Zuma’ s state of mind in forming MK

“When I say you have neglected me, it is actually an understatement You have stopped me from getting anything to help me on my side My own comrades have facilitated that I must be suffocated financially, so that I am buried once and for all for crimes I did not commit,” he said in the meeting

On the judiciary, he said: “We are forced to implement only what the unelected judiciary agrees with This is not a democracy but a pseudo-democracy It’ s a little funny? We fought for democracy Majority rules What happens when they [the judiciary] are wrong in the decisions they take?

“What happens when they assume more powers than they are allowed? What happens when they unilaterally dissolve parliament tomorrow and establish their own structure in its place? There is something fundamentally wrong in this model,” he said, according to the transcript

The legal woes Zuma constantly bemoans will continue in 2025 Ironically, this will likely fuel his attempts to build his party His long-delayed corrup-

He has declared that MK will not hold an elective conference, so he will remain all-powerful

tion trial supposedly gets under way in April and is set down for five months He will use his court appearances and their attendant publicity as opportunities to rage against the ANC of President Cyril Ramaphosa

With the local government elections a year later, Zuma is likely to take full advantage to deepen his victimhood campaign, particularly as the state attorney was in January this year ordered to recoup about R28m in legal fees that Zuma has spent on his defence so far

The 2026 elections will likely be a crucial moment of truth for MK Can it do even better in KZN and take control of major metros such as eThekwini, as well as rural municipalities that are home to the poorest of the poor?

So far, the party has not fared well in by-elections in KZN or elsewhere

At MK’ s birthday celebration over the weekend, Zuma encouraged “black parties” to join hands to take over South Africa in future elections He sought to entice EFF leader Julius Malema to collapse the 10-year-old party into his own, but Malema refused At the EFF’ s elective conference last week, Malema ruled out working with Zuma Last month he declared MK the “biggest enemy ” Zuma’ s biggest opportunity to get his hands back on the levers of power is in 2027, when the ANC holds its elective conference

Zuma is seeking nothing less than to liquidate the Ramaphosa version of the ANC, which would be much easier to achieve if he is working with the party in an alliance. The post-Ramaphosa era will bring this opportunity The ANC elects a new president in 2027, potentially rendering Ramaphosa a lame duck; he could even fall victim to the party tradition of “recalling” presidents who fall out of favour

So far the strongest contenders as his successor are Deputy President Paul Mashatile, secretary-general Fikile Mbalula and party chair Gwede Mantashe Either Mashatile or Mantashe could easily slip into a working relationship with Zuma’ s party, if it meant securing power again for the ANC without having to rely on the DA

The Zuma chapter with all its possible destructive endings remains open, at least in the short term He is one of the country’ s most adept politicians at attaining power, but the most incompetent and destructive in exercising it except when it comes to patronage

The dark days are not necessarily behind us x

cover story / business

This year ’ s business newsmaker certainly did not hog the headlines In fact, readers might be hard-pressed to find even a few column inches dedicated to the person

But those who watch the surfeit of turnaround and deep-value stories scattered across the JSE will know that 2024 was a watershed year for Sam Sithole and the investment business he heads, Value Capital Partners (VCP)

VCP was launched in 2016 as a specialist active investment outfit with the premise of “unlocking value as an engaged shareholder” Scepticism, naturally, abounded

Shareholder activism has not really taken hold in South Africa Activist shareholders have been few and far between in recent years, and those that did take a tilt at various projects in the past, such as Active Value Partners and FRM Strategies, endured mixed results and were short-lived

To make matters worse, the prime movers at VCP had only recently left private equity investment firm Brait, which had made a nifty turn by selling

THE BRIDGE BUILDER

Sam Sithole of VCP likes to take a constructive rather than an acrimonious approach in his dealings with target companies

Marc Hasenfuss

off its meaningful stake in fashion retailer Pepkor to Steinhoff International The wheels would start coming off at Brait in 2017, when investments like UK-based fashion chain New Look started to unravel

The fallout at Brait would, unfairly, cause ripples for the fledgling VCP which did not exactly impress the market with its first low-key tilts at beleaguered counters such as technolog y conglomerate Altron, services group Adcorp and cement giant PPC, as well as out-of-fashion gaming groups Sun International and Grand Parade Investments

Then there is the view that the broader philosophy of activist investment is inappropriate for South Africa and the JSE One has to remember that the smattering of individual activist investors take a bow, Theo Botha and Chris Logan would garner almost no

support from institutional investors, even if their concerns had merit or they presented logical value-unlocking proposals.

Activist shareholders, due to the “critical” nature of their engagements, can often ruffle feathers badly There have even been instances where activist efforts backfired because executive management doggedly doubled down on existing positions or strategies

VCP seems to have taken a different tack The engagements with target companies look constructive rather than acrimonious

Sithole says the FM’ s observations are absolutely right “This was a deliberate decision by my co-founder, Antony Ball, and me when we started VCP in October 2016 ”

There were several reasons for this approach, says Sithole “The business culture in South Africa is very different from that in the US, where it’ s mostly cut-throat and ruthless Part of it is that South Africa is quite small Each person you deal with is probably a fellow member at a country club or church,

and you probably know their kids and wives A more collegial and respectful relationship with top executives makes sense in South Africa, even when you have decided to part ways ”

He continues: “When there is infighting between management and the board, or among board members, there are invariably newspaper headlines, followed by a nose-dive in the share price We strongly believe any differences must be resolved in confidence, otherwise there is serious destruction of shareholder value Our primary focus is the protection of shareholder value, and it starts with the way conflict is resolved ”

Sithole says businesses do take after their founders and in most instances mirror their values and cultures “I would like to believe that Antony and I are relational people and always put the relationship, and treating others the way we want to be treated, first This is, of course, not always the case, especially where there are disagreements on the future direction of the business But even in those instances, we tend to err on the generous side We lean towards a process that retains a person ’ s reputation and dignity, rather than the opposite ”

Sithole says Ball recently remarked at an investor conference that there is probably not one former CEO of any of the VCP portfolio companies who would not answer a phone call and have a cup of coffee with the team “That’ s quite an incredible statement, when some of these people had to exit their lifelong career positions ”

He also stresses that VCP employs people who have great people skills and the character to build bridges with a board that initially would be quite hostile or suspicious

“It’ s a mixture of art and science But at its core it’ s an ability to develop trust and constructive relationships at the highest level of the corporate world There are very few individuals who are able to do this, and at VCP we have been blessed with some extraordinary investment directors and partners ”

Several VCP investments have paid off in the past year Altron where VCP had already unlocked significant value a few years ago by initiating the spinning-off of Bytes has had its share price jump over 100% this year Key operations like tracking group Netstar and the fintech hub gained encouraging traction Consumerfocused investments Pepkor and Tiger Brands have also been robust this year, while private education group AdvTech has delivered a gain of more than 100%

since VCP bought in three years ago Even laggards like fintech hub Lesaka, PPC and Adcorp have found fortification this year the latter doling out some generous dividends Sun International, which sweated bullets through the Covid lockdowns, is on the front foot again, even if the share price gains were quite pedestrian in 2024 Over three years, Sun has had a 63% gain in its share price, and VCP is starting to collect decent dividend flows.

Automotive and battery group Metair remains the stark underperformer in the VCP portfolio But changes are afoot, and there could be structural developments to spark sentiment in 2025

The question, of course, is how VCP manages to be patient in addressing key changes that market watchers might feel are already long overdue

Sithole explains that much of VCP’ s “patient” work is done before it invests or takes a board position “We probably spend between six and 24 months

It’s a mixture of art and science. But at its core it’s an ability to develop trust and constructive relationships

Sam Sithole

assessing a potential investment before we gain the conviction that we should invest ”

He says this is partly to ensure that VCP has enough margin of safety (or downside protection), because it manages a concentrated portfolio of between eight and a dozen positions at any one point

Sithole says the assessment includes having contingency plans for bringing in new management should this be required

He points out that VCP also prefers to test its thinking with other shareholders using publicly available information “We try to avoid a fight between shareholders if we can It can be very destructive to the business Once we take a board seat, we try to move as quickly as possible, though we still concede that it takes a good 12 to 36 months to see the results of any transformational efforts ”

But is there ever a time that VCP has to reassess original goals and walk away from an investment?

Sithole notes: “Investing is probably the most humbling profession, and you will always have your fair share of duds and investments that don’t work But this process, while unavoidable, is priceless, as you learn the most during your unsuccessful investments about both your investment model and your people ”

VCP has been fortunate in that most of the pedestrian investments were made during its initial stages, when the group was still testing the model “separating the theory from the practice on the ground” , Sithole says

“What we do every month is to undertake a review of the portfolio, during which we compare each investment against original targets and assess potential upside vs our minimum target returns ” He says VCP has been fairly decisive in exiting the suboptimal investments, though he concedes that the constraint of being on a board, or sometimes being in illiquid investments, has delayed one or two of the exits

After a cracking 2024, is there a temptation for VCP to cash out of any of its current positions?

Sithole says the conventional investment wisdom is that investors hold on to their losers for far too long, and sell the winners way too quickly

“This has something to do with human psychology We tend to experience the pain of losses much more deeply than the joy of gains Fortunately, I think we have managed to stay the course for a few of our investments ”

He cites Altron, VCP’ s first investment in December 2016 and still one of its key investments “By December 2020, we had created an internal rate of return of more than 50% and four to five times returns for our investors But we still believed there was more juice left. I am glad we stayed the course, as Altron has just been the best-performing share in 2024 ”

The way things have stacked up for VCP this year suggests 2025 could be another big year, with plenty of opportunities still abounding on the JSE Would there perhaps be any merit in listing VCP as a specialist activist investment fund which could, for one thing, provide a meaningful war chest via an IPO?

Sithole seems open-minded “We are constantly looking at new fundraising efforts and have recently appointed our fellow partner Tapiwa Ngara to be in charge of this key strategic pillar We won ’t discount any ideas at this moment, as we need as much capital as we can raise ” x

cover story / culture

South Africa’ s cultural workers simply get on with it and keep creating, as they always do

Tom Eaton

W“hat? Oh my gosh, guys, this is crazy! I never thought I’d say I won a Grammy at 22 years old ”

They were endearingly humble words from Tyla as she stood at the pinnacle of pop music in February, and for a moment it allowed the rest of us to feel that we had something in common with her After all, you and I also never thought we ’d win a Grammy at 22

For all her humility, however, the fact is that Tyla is already in a class of her own as the youngest African to win pop ’ s most coveted award

Of course, the wheel turns and this year, as bright young people like Tyla reached out and grabbed their futures, the South African cultural world lost veterans who had come before: beloved figures like poet James Matthews, gospel star Solly Moholo, Darlington Michaels (the magnificent rogue Georgie Zamdela from Isidingo), and of course the inimitable Connie Chiume, whose role as a respected elder in both Black Panther blockbusters reflected her status in the local acting world Television is poorer for their passing, but it remained in good health. The bigbudget historical epic Shaka Ilembe cleaned up at the South African Film & Television Awards, getting a record 17 nominations before going on to win in 12 categories Unsurprisingly, a second season has been commissioned, and, while I don’t know how far they’ll take the story and I definitely don’t want to provide any spoilers, you might want to keep an eye on that Dingane fellow

There was also high praise for Die Brug as this local iteration of the international reality show was nominated for an international Emmy It’ s a good concept strangers have to band together to build a makeshift bridge across a lake to reach a cash prize but I suspect a show about South Africans having to build their own infrastructure out of twigs was always going to feel particularly relevant here I look forward to local spin-offs like Die Waterpyp and Die Straat

Indeed, there were probably more

South African artists do it because they have to; because they’re compelled to. Because it’s what they love. It’s who they are

NATIONAL NIECE, INTERNATIONAL SUPERSTAR

than a few local film and TV makers who watched Deadpool & Wolverine rake in R50m during its South African run roughly what it made every halfhour during its opening weekend in the US and reflected how many films they could make for that sum Still, at least they would have been cheered by seeing their own struggles reflected in the superhero flick, as two jaded misanthropes with fantastically foul mouths take a huge amount of punishment but somehow don’t die

Speaking of bloody-minded penury brings us elegantly to literature, where local publishing always seems to be one WhatsApp piracy spree away from ruin. Rumours of the death of the novel, however, are exaggerated, especially now that “romantasy” has left the privacy of feverish diary entries to slide moistly into the mainstream. Admittedly it’ s a broad church, ranging from quasimedieval courtly fairytales right through to bog-standard porn but where the hot plumber is an elf However, as a genre it seems unstoppable

In South Africa, though, it is the gritty crime drama that still holds sway This year Irma Venter and Rudie van Rensburg, along with the un-put-downable Deon Meyer, underlined the fact that Afrikaans thrillers and Afrikaans book-buyers are the economic engine of local publishing

Of course, they’ ve had some help, albeit late in the year John van der Ruit’ s Spud has returned, a bestseller once again, reminding us of that bona fide publishing phenomenon of the mid2000s when more than a few fine

books that might not otherwise have been considered bankable enough got published solely because there was Spud money sloshing around

Some books, on the other hand, were always going to be winners Jonny Steinberg’ s Winnie and Nelson: Portrait of a Marriage and Andrew Brown’ s The Bitterness of Olives won the Sunday Times literary awards for nonfiction and fiction, gongs that seemed guaranteed from the moment both books arrived

At some stage I hope we can start the process of having Steinberg declared a national key point, like parliament or the SABC He certainly seems more interested in South Africa than the former and produces considerably more knowledge than the latter but I know that Gayton McKenzie, our new minister of Sport, Sport, Sport and Whatever Else There’ s Time For, is a very busy man, so perhaps this will have to wait

For now, though, South Africa’ s cultural workers, who act or sing or write, who dance or paint or sculpt, who record the thoughts or songs or beliefs of our country, who chronicle or transpose or interpret, will simply get on with it, as they always do

The money will be terrible, because it always is The hours will be long, because they always are If you ask them why they do it, they’ll quote Tyla: oh my gosh, guys, this is crazy

But that’ s only half true, because they know why they do it: because they have to; because they’ re compelled to Because it’ s what they love It’ s who they are And there’ s nothing crazy about being yourself x

Reuters / Mina Kim

cover story / sports

THE GOLDEN GIRL

Tatjana Smith shone this year, bringing gold and silver home; she was one of the many South African athletes who gave the country much to be proud of David Isaacson

Tatjana Smith put the cherry on the multilayered gateau that South African sports fans enjoyed throughout 2024

That she arguably eclipsed even the Springboks the world’ s rugby champions from 2023 who maintained their No 1 world ranking in 2024 illustrates the significance of her achievement

Smith became the first South African to win Olympic gold medals at different Games in real time when she took the 100m breaststroke crown in Paris in July And she did it in gladiatorial style, delivering a second-lap surge after turning in fourth place with half the race gone

Caster Semenya is the only other athlete to have golds from two Olympics, but her 800m gong from London 2012 was awarded only after she’d won at Rio 2016, her silver being upgraded in the wake of the doping disqualification of 2012 winner Mariya Savinova of Russia

Smith won both her golds in the heat of battle, and when she took the 200m breaststroke silver a few days later she became the country’ s most decorated Olympian, with two golds and two silvers

The Paris showpiece, at which Team South Africa secured an impressive sixpack of gongs, proved significant for the country in other ways too

Akani Simbine won what could rank as the most deserved medal in local sports history when he crossed the line second in the men ’ s 4x100m relay He went into the Games having made the 100m final at three world championships and two Olympics, finishing fourth twice and fifth on three occasions

Simbine ended fourth by one-hundredth of a second in the blue riband

sprint in Paris, the most closely contested by the entire field of any Olympic 100m race In the relay final Simbine produced a world-class display, taking the baton in fifth place and storming down the home straight in 8 78sec, the third-fastest anchor leg in history behind Jamaicans Usain Bolt (8 65) and Asafa Powell (8 68)

Alan Hatherly picked up South Africa’ s first Olympic cycling medal since Melbourne 1956, bagging bronze in a scintillating men ’ s mountain bike race behind British star Tom Pidcock and Frenchman Victor Koretzky Hatherly ramped it up to win the world championships a month later, pushing both rivals into the minor placings

Jo-Ané van Dyk stunned the women ’ s javelin field in Paris with her silver It was a performance that underlined the skill of Terseus Liebenberg, probably South Africa’ s greatest active athletics coach He also mentored Marius Corbett to a first world title in 1997 and Sunette Viljoen to the 2016 Olympic silver medal and two world championship medals

Propped up by athlete Mpumelelo Mhlongo, the Paralympians landed six medals, but that was their worst haul to date Kgothatso Montjane won the wheelchair women ’ s doubles at Wimbledon

Rassie Erasmus, Siya Kolisi and the men in green and gold delivered another memorable feast for fans The shared home series against Ireland was soon forgotten as they demolished Argentina 48-7 at Mbombela to secure the Rugby Championship and saw off Scotland, England and Wales to go unbeaten on their end-of-year tour for the first time in a decade

The old stalwarts fired, like repeat World Rugby player of the year PieterSteph du Toit, Eben Etzebeth, who became the most capped Bok on record,

and winger Cheslin Kolbe And flyhalf Sacha Feinberg-Mngomezulu showed there’ s plenty of young blood coming through for 2027 In a bizarre decision, Erasmus was snubbed for the international coach of the year award, which went instead to relative unknown Jérôme Daret, coach of France’ s Olympic-winning sevens team

The Proteas reached their first World Cup cricket final, in the T20 format, where Heinrich Klaasen, Tristan Stubbs and David Miller nearly pulled it off against India But the team stumbled at the death, unable to handle the wiles of the world’ s best bowler, Jasprit Bumrah

In the five-day arena Kagiso Rabada joined the likes of Dale Steyn and Allan Donald in the 300-wicket club, and the Proteas won a two-Test series against Sri Lanka to set up a likely World Test Championship final

The women cricketers also got through to another T20 final but were outclassed by New Zealand

Even Bafana Bafana gave the country much to shout about, finishing third at the Africa Cup of Nations Goalkeeper Ronwen Williams pulled off four saves in the penalty shoot-out of the quarterfinal against Cape Verde The team have already qualified for the next continental tournament and are still in the hunt for 2026 World Cup qualification

In the non-Olympic individual sports, mixed martial arts fighter Dricus du Plessis dominated, becoming the first South African to win an Ultimate Fighting Championship title, dethroning Sean Strickland for the middleweight belt and defending it by forcing Israel Adesanya to tap out in the fourth round

In boxing, Kevin Lerena was handed the World Boxing Council’ s bridgerweight crown after champion Lawrence Okolie vacated it to move to heavyweight, making Lerena only the third South African to hold the Mexico-based organisation’ s green belt, after Thulani “Sugar Boy” Malinga and Dingaan Thobela

Sivenathi Nontshinga regained the International Boxing Federation’ s juniorflyweight title by stopping Mexican Adrian Curiel in the 10th round of their rematch in Oaxaca in February, becoming the first South African to reclaim a championship in a rematch But he lost it again in his next outing, getting counted out against Masamichi Yabuki in Japan

Phumelela Cafu had a better time of it in Japan, scoring a critical knockdown on his way to a split decision win over Kosei Tanaka for the World Boxing Organisation’ s junior-bantamweight title x

The new look S owetan. Trusted for over four decades and just getting smar ter.

Piling on the fat in the food aisle

All three of the big retailers that held shareholder votes on executive pay policy in 2024 got the thumbs-down but none seems to care that much

Renée Bonorchis

● Comparing how investors feel about the remuneration policies of major food retailers, it would seem from the “against” votes in 2024 that Shoprite’ s shareholders fear there are prices they can ’t trust, Pick n Pay’ s owners feel the pay packages are not inspired by them and Woolworths’ investors believe that management did not make the difference

The only retailer yet to be tested on whether it measured up to its slogan in 2024 is Spar Perhaps shareholders will have felt that they and the board were all better together.

With these nonbinding remuneration votes a “ pass ” is 75% Anything below that means companies have to sit down with dissenting shareholders and talk about their concerns Supposedly, the board and its remuneration committee could then tweak a few things that would make shareholders far more likely to vote in favour of the packages

And it’ s not like shareholders automatically say no to high pay In many

CEO REMUNERATION

instances the CEO and fellow executives are being paid a sign ficant amount, and more than of investors vote in favour Rea can include variable pay being c forcefully linked to performance; measurable targets being met; share schemes being reasonable rather than over the top; true market-beating returns; company innovation; market share gains; and decent dividends where applicable

But so far this year, not one major food retailer has passed the test

Given that these remuneration votes have existed for a few years now, it’ s not like the retailers haven’t had quite a few chances to get it right when it comes to the management pleasing the owners

“For the second consecutive year, Woolworths shareholders have rejected the company ’ s remuneration policy, failing to secure the required 75% approval at the AGM,” says Kwanele Ngogela, senior inequality analyst at Just Share

“Additionally, the implementation report on executive pay has faced similar

disapproval for three consecutive years This highlights growing shareholder dissatisfaction with the company ’ s approach to executive remuneration ”

In the year, the retailer’ s attributable profit halved after the one-off benefit from getting rid of David Jones fell away, its return on equity dropped to 28 6% from 39 9%, profit margins narrowed, the share price sank and the dividend slumped 15.2% year on year

Woolworths didn’t respond to e-mailed questions about the AGM CEO Roy Bagattini was paid R65 3m this year and while it was much less than the previous period’ s R122 5m, which came about after shortterm and long-term incentives produced extreme returns, it may have been the catalyst for the rush to “benchmark” remuneration and reward executives just to keep up with their rivals

At Pick n Pay, which has a February year-end, Sean Summers replaced Pieter Boone as CEO on September 30 2023 Boone received a termination settlement with total guaranteed pay of R25 3m, while Summers was paid R10m for his first five months and had 4-million performancebased shares thrown into the mix This retailer, which saw its share price cut in half, didn’t “ pass ” either, though it was close to making the cut

From an investors’ perspective, there wasn ’t much in it for them The headline

Roy Bagattini: Paid R65 3m this year

investin

loss per share year on year widened significantly, the return on invested capital fell to 1 2% from 10 3%, return on capital employed swung into negative territory from a positive outcome in the prev ous period and no dividend was declar which makes Boone s payout after seven months of work in the 2024 fiscal period appear unbalanced, severance package or not

Poor performance resulted in executives forfeiting some of their incentive rewards and Pick n Pay, which declined to respdond to e-mailed questions, said in its annual report: “The newly appointed leadership team’ s salary packages have been reviewed and benchmarked against their new roles and relevant market data to ensure appropriateness Where necessary, salary packages have been adjusted to align to the new roles and expectations of the role ”

From the voting outcomes, it seems shareholders will believe it when they see it

In the retail sector “it is common to see a CEO brought in to replace underperforming leadership, as recently observed with Pick n Pay and Woolworths” , Ngogela says “This leads to extraordinary rewards that become entrenched and subsequently serve as benchmarks for other companies, perpetuating a cycle of escalating pay levels In South Africa, CEO packages are frequently benchmarked against those in the UK, oft the self-serving jus tification that these executives will leav if not compensated at comparable levels ”

Shoprite’ s performance was the most dismal with more than 40% of shareholders saying “ no way ”

CEO Pieter Engelbrecht’ s pay leapt a most 29% to R83 3 from R64 7m in the year after a short-t

Engelbrecht: d R83 3m

incentive target was achieved This made him the year ’ s bestpaid CEO among the big food retailers

Profit attributable to the comany ’ s owners rose %, the total dividend p 7 4% and return y inched up from 24 8% to 26% for the year ended in June. A solid financial performance vs particularly stellar pay

Ngogela explains that disparities arise because “the lack of binding shareholder votes on remuneration, with the absence of tan consequences, has allow companies to continue with minimal accountability”

He adds: “While companies are required to engage dissenting shareholders, these engagements rarely result in substantial changes to remuneration policies This cyclical approach fosters a cynical view th such engagements are merely tick-box exercis often serving to shield c executives and remuneration committees from genuine responsibility and meaningful reform ”

remuneration committees, which heavily depend on advice from remuneration consultants part of a global industry that has, for decades, prioritised serving the interests of executives, their paymasters, over those of shareholders ”

Still, Shoprite says it conducts extensive engagements with shareholders ahead of the AGM, “which includes an invitation to any shareholder to engage with our chair, the remuneration committee chair and members, and the management team”

Nonetheless, following the AGM vote, a stock exchange news report “ was issued requesting feedback from shareholders No adverse comments were received,” the company says

Perhaps engagement is also y apathetic the investors years of nonnding votes aven ’t resulted in substantial change

Shoprite surpassed the 75% mark in previous years, but for the 2024 iod, despite having ve remuneration mmittee meetings nd using four outside advisers REMchannel, PwC, 21st Century and Vasdex Associates it flopped

“Shareholders are increasingly dissenting against excessively generous and frequently njustifiable execue pay packages,” gela says “These s are often deat the discretion of

So, what do shareholders want? It’ s not rocket science Just Share advocates for fair nd responsible muneration that ises the stakeholder community, including workers, rather than focusing solely on shareholders or fulfilling executives’ economic self-interest

The activist shareholder group believes remuneration policies should emphasise stakeholder-centric value creation, balancing benefits for shareholders, workers and others to promote equity and foster sustainable, inclusive growth

“This involves transitioning from adherence to the national minimum wage towards paying workers a living wage, ensuring they can afford a decent standard of living,” says Ngogela “At the same time, executive remuneration must be reasonable, with clear and measurable economic, social and governance targets linked to both short-term and long-term incentives, and aligned with company performance and broader economic realities, addressing the country’ s inequality, which is largely driven by pay disparities in the labour market ” x

Pieter Boone: Total guaranteed pay of R25 3m

Sean Summers: Paid R10m for his first five months

Flush Capprec banks on growth

Capital Appreciation is leveraged to turnaround, despite headwinds faced by its software division

Stephen Cranston

● It was a very different first half for the two main operating units at fintech firm Capital Appreciation (Capprec)

In the six months to September 2024, overall revenue was up 10.4% to R612m. But this strong real growth was entirely driven by the payments division, in which the revenue increased by 18 5% The revenue of the software division was up just 2.4% to R295.2m.

Overall operating profit fell 14% to R90 7m, and headline earnings 8 3% to 5 96c a share

Payments is the more boring part of the business as the growth driver is renting out or selling payment terminals those hand-held devices waitrons use in every restaurant and coffee shop

There are now 387,000 Capprec point-of-sale terminals in the hands of clients, up 13% year on year

CEO Bradley Sacks says the main contributor to growth in the payments division was terminal rental income, up 70% to R38 5m, and terminal sales, up 26% to R138 6m Sacks says the trend towards renting rather than buying terminals has led to enhanced annuity income from maintenance, support services and value-added transactions

to an 18% increase in payments earnings before interest, tax, depreciation and amortisation to R138 5m Payments is expanding in a whole range of ancillary services, including vending machines for consumer-related products and parkingrelated products

Sacks says there is an enormous opportunity for the business as 2G and 3G networks will disappear by 2027 “There will need to be significant reinvestment in the infrastructure around bank terminals, as many point-of-sale terminals currently in use in South Africa aren ’t compatible with 4G or 5G networks ” The environment for the software division, described by the Capprec management team as “challenging” , is a lot less benign

Salomon says customers continued to focus on cost-cutting “and demonstrated a low commitment to innovation projects, especially in the financial services sector”

The environment for the software division, described by the Capprec management team as ‘challenging’ , is a lot less benign

Largely because of the increase in the rental “fleet” , transaction-related income grew 11% to R44 5m, benefiting from increased software licence revenue and other fees. The rentals are subject to an annual escalation based on the consumer price index

CFO Alan Salomon says operating expenses were well managed and aligned with business growth and inflation, leading

.

A large international contract, executed from South Africa to restructure the logistics software for the port of Singapore, the second-biggest port in the world was not fully replaced with new work, and there was underemployed skilled labour on the payroll

Salomon says the group has decided to retain highly skilled specialist staff, as it expects improved trading conditions

“Since payroll accounts for 80% of the software division’ s fixed costs, the decision not to rationalise the human capital base placed enormous pressure on the division’ s financial performance ”

The division experienced its first operating loss of R5m, compared with a R32 2m operating profit in the six months to September 2023

Software has a much wider geographical footprint than payments, with

non-South African revenue making up 21% of sales while they account for less than 1% of payments revenue

The managed services business has new clients in the UK and US and the intelligent data services acquired clients in the UK, the Netherlands and Kenya The group also incubates several new projects in Amsterdam through its Synthesis business

But Sacks says the domestic sales pipeline and activity levels have improved, even though “the conversion of leads into actual sales is gradual” The Halo Dot software business, for example, increased its footprint with clients such as Pick n Pay, the Gautrain Management Agency and African Bank

Sacks describes the two main operating companies in the software cluster, Synthesis and Dariel, as “thought leaders” and “trusted advisers” in the software market They have had some outside endorsements: Synthesis was recently awarded premier partner status by Amazon Web Services (AWS)

Bradley Sacks: There’s a trend towards renting rather than buying terminals

investing

AWS and Google Cloud both recognised Synthesis as the leader in generative AI in South Africa

Sacks says Synthesis has partnered with AWS on large-scale cloud migration programs for several large banks Other companies, including insurance companies, moved to Google Cloud

There are few barriers to entry in software development, and Sacks is confident that Capprec has the skills, experience, track record and necessary infrastructure to retain a competitive advantage

Capprec remains a strong cash generator; it paid out R71 5m in dividends in the first half but still has cash of R327m on the balance sheet out of R1 8bn total assets And as an intellectual capital business, it’ s perhaps not that surprising that almost half the assets (R840m) are made up of goodwill or intangible assets Capprec trades on a handsome dividend yield of 6 5%

In the business overall, Sacks says the three months to June 2024 were affected by low business confidence, with businesses postponing major capital expenditure In the following quarter there was a marked improvement in sentiment, in the wake of the election and the formation of the government of national unity

“Companies once again started investing in their businesses,” says Sacks

Salomon, one of the founders of Capprec in 2015, retires at the end of December He was previously CEO of Bidvest Bank His successor is Sjoerd Douwenga, previously CFO and then CEO of Metair Investments

Capprec is leveraged to economic turnaround, and particularly to improved business confidence Though it has material international business, it can still be considered a South Africa Inc recovery play x

RESOURCES

Speed bumps ahead for PGMs

How will the outlook for these metals change with the new extended-range models now hitting the road?

Raymond

Steyn

● Commodity supply-and-demand analysis often resembles a Rorschach test, with both bullish and bearish investors finding patterns in the data to support their theses This in turn causes price volatility as the two camps battle for control of the narrative

The platinum group metals (PGMs) sector is no different Though it’ s widely accepted that the battery electric vehicle (BEV) revolution will reduce the demand for autocatalysts and their associated PGM loadings, there’ s wide divergence on how this will play out over the short to medium term (PGM loadings are used to reduce the harmful pollutants in exhaust gases that are produced by internal combustion engines ICEs for short ) As autocatalysts represent roughly 85% of palladium and rhodium demand and 45% of platinum demand (which are the three main metals), determining the likely path is exceedingly important

PGM bulls have been encouraged by a slower rate of BEV adoption outside China, as poor affordability, among other issues, affected consumer demand Lacking Chinese scale and supply chain sophistication, Western carmakers have struggled to produce BEVs that can compete on price with comparative ICE models This could change in the coming years, though, as BEV production ramps up and cheap Chinese models enter the market The US has announced punitive tariffs to protect its car industry, but Europe can ’t do the same without inviting reciprocal measures from China

electric motor and an ICE They are popular due to decreased costs (read: smaller batteries) and better range a standard BEV can do about 300km before the battery needs recharging, while hybrids can switch to an ICE as backup Considered a transition technology until BEVs’ range and affordability improves, most hybrids require PGM loadings that are marginally higher than those of ICE vehicles

The future hopes of PGMs therefore rest on the development of alternative applications

Though this sounds positive for PGM demand in the short term, not all hybrids are the same A new kind of hybrid electric vehicle, called the extended-range electric vehicle (Erev), has a small ICE that’ s not connected to the wheels, as with standard hybrids, but instead functions as an on-board generator that recharges the battery Because of the limited but steady use of ICEs at relatively low temperatures, the PGM loadings on an Erev is only 40% that of a normal ICE (or hybrid) vehicle

Another reason for optimism among PGM producers has been the rise of hybrid electric vehicles that sport both a battery

In China, sales of hybrid electric vehicles are growing faster than those of BEVs, albeit from a smaller base, and now comprise 23% of all vehicle sales, with BEVs at 31% and traditional ICE vehicles at only 46% Among hybrids, the Erev is the fastest-growing category, with a 26% share of all hybrid vehicle sales

Erevs are also expected to be popular in

GAPPING IT

countries like the US, where several models are being planned for release in 2025

As the batteries that Erevs use are typically smaller than those of BEVs but bigger than those of other hybrid electric vehicles, they cost somewhere in the middle, with the equation continuing to evolve as batteries become cheaper The bigger batteries make Erevs more environmentally friendly than other hybrids, given their extended electric range, which will encourage carmakers to sell more of them

Source: Infront

BEVs and Erevs aren ’t the only threats to PGM demand Chinese ICE vehicles are typically fitted with only 40% of Western cars ’ PGM loadings, due to less strenuous emissions testing conditions (though the standards themselves are similar), with

Chinese hybrids having even lower loadings This has led to lower PGM demand from China as local brands grab more market share in the world’ s largest car market Boasting cheaper prices than Western rivals and making inroads in foreign markets such as Latin America, Southeast Asia and Africa, Chinese cars also stand to reduce PGM demand in territories where Chinese emissions testing is considered adequate

Furthermore, while tougher EU emissions standards could increase PGM loadings requirements on ICE and hybrid cars over the short term in Europe, carmakers want to broaden their offering of BEV and Erev vehicles This dynamic could be delayed in the US, where president-elect Donald Trump has vowed to repeal a federal “EV mandate” (in reality just tough emissions standards and incentives), though he’d have to contend with large states like California, where emissions standards are set independently Many US carmakers will also feel pressure to transform, regardless of Trump’ s policies, to remain competitive internationally Ultimately, China proves that adoption rates increase exponentially when electric vehicles are cheap enough and can allay fears about range limits, whether through hybrid electric models like Erevs or improved battery technology Legislation, especially in Europe, will increasingly favour Erevs as the desired transition technology, while affordability and range concerns about pure BEVs should fade as technology improves and economies of scale kick in

The future hopes of PGMs therefore rest on the development of alternative applications, whether these relate to the hydrogen economy (fuel cell technology and hydrogen production), water purification, solar cells, electronics, medical technology or something else For now, though, caution is advised As the old investment mantra goes, hope isn’t a strategy x

REAL ESTATE

Making the index bigger

Rule changes for inclusion in the Alpi will create more choice for investors — and share price upside for new entrants

Joan Muller

● Four real estate stocks are expected to be added to the 20 all property index (Alpi) constituents if a JSE proposal to lower the market cap threshold for index inclusion is implemented

Counters set to join the Alpi in March are Dipula Income Fund, Octodec Investments, Spear Reit and Schroder European Real Estate Investment Trust

The Alpi is the go-to real estate benchmark tracked by larger fund managers, which typically only take positions in index participants Of the JSE’ s 38 property counters, 18 are excluded from the Alpi.

The proposed changes to Alpi eligibility come after several fund managers lobbied the JSE to find ways to broaden the bourse’ s investable universe of real estate stocks

WELCOME CHANGES

Source: Infront Dipula Income Fund vs SA listed property index – weekly – based to 100

Income Fund

investin

Meago Asset Managers director Anas Madhi says the Alpi has shrunk notably in recent years on the back of declining share prices and consolidation among peers fro 33 constituents at launch in 2017 to 2 today

“It has become quite restrictive for fund managers in terms of choice,” he says

At the same time, the index weighting of large stocks such as Nepi Rockcastle and Growthpoint Properties increased significantly, creating more and more concentration risk

Madhi says the market caps of several smaller companies have dwindled since the pandemic, making it virtually impossible to qualify for Alpi inclusion in terms of size requirements

He says Alpi inclusion has ultimately been delinked from the property universe as it is first dependent on qualifying for the JSE’ s small-cap index, which has a market cap requirement of about R7bn

Madhi believes that’ s unfair “Property is a unique asset class and companies that have built a solid track record over many years, some in niche subsectors, should not be penalised for not meeting the small cap index threshold ”

He adds that eligibility for Alpi inclusion should be less focused on size, and more on free float and liquidity considerations

“This would encourage more niche property players in subsectors, such as student accommodation and health care, access to equity markets ”

The Alpi’ s expansion will benefit institutional and retail investors, as stocks in the index become naturally more tradable and liquid

Madhi says the move is also good news from a corporate governance perspective, as the shareholder base of new index participants will be broadened

Moreover, the timing of the four stocks’ entry into the Alpi is opportune given the sector’ s recent rebound thanks to improved post-election sentiment and lower interest rates

Share prices of real estate investment trusts (Reits), which have been largely out of favour for the past five to seven years,

and liquidity

have recovered strongly, with the Alpi up about 50% since endOctober last year

Still, there’ s been quite a divergence in the erformance of ividual counters hi says smaller and d property stocks p y those that aren ’t part of the Alpi have lagged their larger peers

“We believe there’ s still a lot of value sitting in smaller caps, with plenty of value-unlock potential among those that will be included in the Alpi next year ”

The four new Alpi entrants will contribute a combined benchmark weighting of about 2 8% Izak Petersen, CEO of Dipula, which is the largest of the Alpi’ s new constituents with a market cap of R4 7bn, has welcomed the JSE’ s proposal

He says Dipula ticks all the boxes in terms of free float and liquidity just not on market cap “Yet some counters that no longer comply with the JSE’ s size threshold haven’t fallen out of the index ” Petersen believes Dipula isn’t really benefiting from increased investor interest in the Reit sector because it’ s excluded from the Alpi

So Alpi inclusion will place Dipula on the radar of fund managers whose mandates preclude them from investing in stocks that fall out of the index, he says Dipula’ s weight-

ing in the Alpi will be 1 45%, which, Petersen says, is not insubstantial

It is also likely that some fund managers may take an overweight position given that Dipula’ s earnings performance outlook is “comparable or better” than that of many of its peers, he says

Petersen expects distributable earnings growth of at least 5% for the year to endAugust

Incidentally, Dipula’ s weighting in the Alpi will be larger than three existing Alpi constituents Shaftesbury Capital, Primary Health Properties and Emira Property Fund

In a circular to market participants, the JSE says the proposed methodology aims to delink the Alpi’ s eligibility criteria from the broader all share index (Alsi)

Under the new proposal, property constituents of the JSE’ s fledgling index that are excluded from the Alsi would qualify for the Alpi from March provided they pass the free float and liquidity requirements

NEW ALPI WEIGHTING (capped)

NEPI Rockcastle: 15 72%

Growthpoint Properties: 14 30%

Redefine Properties: 11 74%

Fortress Real Estate: 8 04%

Vukile Property Fund: 6 75%

Resilient REIT: 5 91%

Hyprop Investments: 5 53%

Equites Property Fund: 3 90%

Sirius Real Estate: 3 15% A acq: 3 30% MAS Plc: 3 08%

The circular reads: “Mandates that exclude offbenchmark allocations have become restrictive for efficient access to this sector, since several property companies outside the Alsi universe are nonetheless potential asset allocations for bespoke property funds ”

Lighthouse Properties: 2 59%

SA Corporate Real Estate Fund: 2 45%

Fairvest B: 2 17 %

Stor-Age Property REIT: 2 08%

Burstone Group: 1 96%

Hammerson Plc: 1 63%

Sha esbury Capital: 1 31%

Primary Health Properties: 0 73%

Emira Property Fund: 0 86%

*Dipula Income Fund: 1 45%

*Octodec Investments: 0 69%

*Spear REIT: 0 64%

*Schroder European REIT: 0 03%

*New entrants from March '25 Source: JSE 3 Hammerson Plc: 1.63%

The JSE adds that the proposed changes for Alpi eligibility will result in a 20% increase in the number of constituents “This will provide increased flexibility to portfolio construction At the same time, more listed property companies would gain access to indexbased investors, which may bring second-round benefits to the industry ” x

tersen: Dipula ticks all oxes in terms of free t

the ghost train by the finance ghost Property wins by a nose

Coming into 2024, a year packed to the brim with elections and the promise of decreasing interest rates, it felt that property was going to be a decent place to play It offers fairly dependable cash flows (provided there are no lockdowns remember those?) as well as inflation protection in the form of lease escalations There are limited key dependencies, unless a portfolio has Pick n Pay as its anchor tenant in every mall Even then, there’ s a competitor ready to take the space Heck, even office properties were showing some signs of life, with very few people still able to work from home The sheer amount of traffic on the road suggested that people were moving around, which means they were going from home to somewhere else and you can invest in “somewhere else” by buying real estate investment trusts (Reits)

My favourite way to do this is in my taxfree savings account The Reit distributions are then free of the clutches of the South African Revenue Service, which makes a huge difference as Reit distributions are taxed as income tax rather than dividends If you are in one of the higher tax brackets, this means the relative benefit of using your tax-free savings account is much better for Reits than anything else Plus, you don’t have to make heroic assumptions about each underlying Reit or spend hours doing the research into each portfolio By buying the exchange traded fund (ETF), you ’ re getting broad exposure in one go An alternative to consider is a broad financial services portfolio, as this also gives you exposure to the broad economy and its underlying drivers This would include the likes of banks and insurance houses The key difference

between these companies and the Reits is the impact of interest rates.

Rates and risk

As a rule, high interest rates are painful for property funds Reits use a lot of leverage, so interest costs are a major drag on performance and anything that decreases that drag is helpful A decrease in rates also reduces pressure on tenants, making leases more affordable for them Finally, the consumers shopping at the malls, or buying online from tenants in warehouses, or growing their businesses and considering office space, are all dealing with debt as well, so lower rates that inject life into an economy will flow through into better demand for goods and services and thus space We don’t need to guess whether a drop in rates will be beneficial We know that it will be

Conversely, the life insurance houses can benefit from strong yields, as they can improve the return on their floats This is an important component of the return to shareholders, as the underwriting profits

tell only part of the story The challenge is that it’ s not guaranteed that high rates will lead to better returns because of all the underlying investment decisions that the institutions need to make (for example, exposure to a venture capital portfolio will do poorly whereas floating yield investments would do well), so it’ s also not guaranteed that declining rates will have a negative impact It becomes a case-bycase basis, and guesswork isn’t fun

Over at the banks, high rates drive strong net interest margin the difference between what the bank pays for its funding (for example the deposits in your current account) and what it charges to borrowers They also earn stronger endowment income when rates are higher, as banks can lend out their equity at a higher rate without having to pay a funding cost on the other side Though the credit-loss ratio moves higher as borrowers start to struggle, the benefits outweigh the costs at all but ridiculously high interest rates As rates come down, we therefore see the reverse happen There are mitigating factors such as increased demand for credit, but the pricing impact tends to outweigh those benefits and banks report only modest earnings growth

So, was property the right call? The Satrix Property ETF (STXPRO) is up 24 7% year to date and the Satrix Fini ETF (STXFIN) is up 21% It’ s closer than I expected, but property took the win The gap widens when distributions are included, with STXPRO on a trailing yield of 7 36% and STXFIN on 4 75% Both have had a terrific year thanks to South African sentiment, with property really shooting the lights out Understanding interest rate cycles is valuable So is taking a risk and being in the market, as you cannot get returns like these without risk Here’ s to 2025! x

economic indicators

AFRICA TOP STOCKS (EXCL SA)

ECONOMIC INDICATORS

EXCHANGE RATES

SHAREHOLDER MEETINGS

WHERE TO INVEST IN AFRICA

your money r m

TOP TRADED STOCKS ON EASYEQUITIES

December 10 - December 16 2024

TOP 5 BUYS

$648,639

$149,907

Altcoins are champing at the bit

Bitcoin began as the disrupter-in-chief in the brave new world of crypto, but some of the newcomers are making it look staid and plodding

Christo

BS&P 500 ETF

TOP 5 BUYS

EasyEquities EUR Account

ASML Holding NV

€2,716

Heineken NV

€2,570

€2,108

PLC

€1,973

€1,732

AG

TOP 5 BUYS

EasyEquities USD Account Paladin Energy

$7,399

itcoin is the original cryptocurrency, but “altcoins” cryptocurrencies other than bitcoin probably now number more than 20,000 While this number appears impressive, only a fraction of these have significant market capitalisation or meaningful utility

Born from blockchain technology, these digital assets have proliferated to address various technological challenges, industry-specific needs and investment opportunities.

The performance of a few altcoins in rand has been particularly impressive this year The top five altcoins on the Luno platform make even bitcoin’ s 132% surge look pedestrian dogecoin (doge) is up 327%, Ripple (XRP) 285%, Hedera (HBAR) 274%, Stellar (XLM) 243% and solana (SOL) 210%

Altcoins can fall into various categories

Stablecoins are designed to minimise volatility by pegging their value to stable assets such as the dollar. They provide a more predictable crypto experience Tether (USDT), for instance, is pegged to the greenback Traders and investors use it as a bridge between traditional finance and crypto exchanges and as a hedge against price swings of crypto and volatile fiat currencies It is the largest stablecoin by market cap

Utility tokens provide access to specific blockchain-based services or platforms Think of them as digital access passes to specialised ecosystems For example, XRP is a digital asset built for global payments, it facilitates cross-border payments by acting as a bridge between different currencies An XRP transaction confirmation takes three to five seconds to complete so banks and payment companies can

facilitate faster and more efficient crossborder payments.

Governance tokens allow holders to participate in a crypto project’ s governance They can vote on proposals, make decisions and influence the project’ s future Governance tokens are crucial components of decentralised autonomous organisations (DAOs) and facilitate democratic processes Maker (MKR) allows investors to vote on the operation of the MakerDAO platform

Meme coins, often dismissed as ridiculous, have in some cases demonstrated surprising market resilience and stellar growth Dogecoin is the original meme coin, whose creators aimed to build a fun and friendly internet currency based on the “doge” meme It has gained a devoted following that includes such influential figures as Elon Musk, who have pushed it into the public consciousness Despite starting as a joke, dogecoin now has several payment integrations and is increasingly used as money

Should you be investigating altcoins?

By the end of 2023, 10 years after Luno’ s launch, just six assets were listed. Initially, we were intentionally selective, offering only a handful of carefully curated cryptocurrencies

There are now 33 available on the platform, with more to come in 2025

As the industry matures, reliable data is more readily available, allowing us to assess and add new digital assets faster

The potential and speculation are exciting, but the altcoin market may be even more highly volatile than bitcoin For this reason, thorough research, risk management and a diversified approach are essential

We recommend customers start small, invest only what they are prepared to lose and grow their crypto knowledge x De Wit is country manager for Luno South Africa

de Wit

TReview your stocking over Christmas

While you’re on holiday, have a look at what you got right — and wrong — in the markets during the year

his is my last column of the year and because of deadlines this means I am already on holiday I have a few year-end traditions, of which two relate to markets

First I will reread Trading in the Zone by Mark Douglas This is by far the best book on market psychology and I reread it every year Often some small point will resonate with my year in the markets and hopefully keep me constantly improving

The second tradition is my portfolio review

I start by crunching my returns for the year and the past three and five years The 2024 return matters, but the longer-term return matters more because some years I may just get lucky or unlucky But my longer-term return must beat the market, otherwise I might as well quit and buy an exchange traded fund

I also check what I got right during the year. This includes what I bought, what I sold and what I did not buy Did I get the entry price right? Did the stock do largely as expected? If not, why not?

Selling is my weakness, specifically selling too soon I have held onto my 2024 clothing retailers, which have given me

100%-plus returns But how to maximise the return, even though I don’t expect another doubling next year?

I also have a look at what I missed Some shares, such as Sasol, are a good miss I investigated the stock in March and decided no thanks But some misses hurt and then the question is why I missed them

Now, of course we can ’t catch every good idea; we simply don’t have enough capital So, what I am looking at is the megatrends playing out, like AI I have exposure there, but what’ s bubbling up?

I also want to look at what I hold now I have written before that when I buy longterm positions I make a short list of what I like and don’t like about the stocks How do the results over the past year fit in with my thinking when I initially bought them?

Is there anything I missed? Are there things that are better or worse that I didn’t list? This part of the review takes a fair bit of time During the year, as results and other announcements come out, I read them in detail, of course But the next set of

What the smart money is doing

Mark du Toit, portfolio manager at OysterCatcher Investments

BUY: Standard Bank

Leading indicators show that the South African economy is at its highest level in nine years The latest inflation print of 2 9% bodes well for further interest rate cuts, which will stimulate the economy This is a great economic backdrop for banks to grow their lending books and earnings Standard Bank has the scale in both retail and commercial banking in South Africa and elsewhere in Africa, where GDP growth is also recovering The bank continues to invest to improve its cost-to-income ratio, a good measure of a bank’ s efficiency We expect Standard to grow earnings faster than nominal GDP and the return on equity to improve towards the top of the bank’ s target range of 17%-20% This, coupled with a forward dividend yield of 6 5%, makes for an attractive investment opportunity x

results or breaking news will often distract me from deeply reflecting on the stocks

But over the holidays I have the time to really think about the stocks I hold, considering expectations, changing trends and maybe new risks

I also check my watch list to see if anything needs to be added or deleted and if my reasons for having them on the list still make sense

The process is never perfect but it’ s important to ensure consistency in investing and trading x

SELL: BHP

BHP is a well-run global mining company It generates the majority of its earnings from iron ore, copper and its major new project, potash (fertiliser)

The company has benefited over the past 30 years from the large expansion of property in China, as iron ore is one of the major components of the steel used in buildings

However, this property boom has come to an end, with the Chinese government now more focused on stimulating domestic consumption than on property expansion

Reduced demand for steel, together with growing iron ore supply from West Africa, will keep the iron ore price under pressure

This will lead to lower earnings for BHP and lower investor returns for shareholders x

Simon Brown

Cryptic No 304

ACROSS

1 Describing one who has gone to pot? (5)

4 This sort of job has no lively conclusion (4-3)

8 They keep arms under cover (7)

9 Causes instability in geological strata (5)

10 A particular part of the site moved (4)

11 Not in good health, but having achieved a better-than-average golf score (5,3)

13 Investigates those who deal with beastly complaints (4)

14 Burden supported by you and me (4)

16 Destined to be in poor health? (3-5)

17 Apartment not blown up (4)

20 & 19Dn The tea-bar is ruined by pulsating action (5-4)

21 She is bound to be fleeced eventually (3-4)

22 Took a fatal plunge? (7)

23 In an instant he recalled that place (5)

DOWN

1 Made out to be famous (13)

2 It sounds like lack of hostility for a bit (5)

3 Pacific bird (4)

4 Scatter five hundred untidy piles (6)

5 Transported in an unearthly fashion (8)

6 Freedom flights that sometimes follow the fire (7)

7 Descriptive of one who will not be allowed to have an overdraft? (13)

12 Put into difficulties remove any crooked tendencies, we hear (8)

13 When this is extinct, upheavals will cease (7)

15 Resist a charge in trying circumstances (6)

18 Don’t disturb a holiday (5)

19 See 20 Across

PREVIOUS SOLUTION

Across: 3 March hare; 8 Ache; 9 Helpmates; 10 Screen; 11 Wrath; 14 Loser; 15 Yard; 16 Dwell; 18 Need; 20 Amble; 21 Sepal; 24 Seance; 25 Centurion; 26 Left; 27 Brushwood

Down: 1 Marshland; 2 Pharisees; 4 Amen; 5 Caper; 6 Hearty; 7 Rues; 9 Heard; 11 Whell; 12 Harbinger; 13 Adherents 17 Laden; 19 Deltas; 22 Arrow; 23 Peer; 24 Solo

life

A look at how to spend your downtim , p , ,

CRICKET

LOOKING GOOD FOR LORD’S

The Proteas are second on the WTC log and to remain there they need to beat Pakistan at least once in this home series

Luke Alfred

● Late on the fourth day of the second cricket Test between South Africa and Sri Lanka at St George’ s Park in Gqeberha, leftarm spinner Keshav Maharaj ambled up to weave his magic Within the space of a few balls, he had dismissed Sri

Lanka’ s two best batsmen, Angelo Mathews (who was out sweeping) and the dashing young left-hander Kamindu Mendis Subtly but unmistakably, the second Test had spun South Africa’ s way, as they wrapped up victory the following day by 109 runs to win the series 2-0, Maharaj taking five

wickets in the innings, seven in the match and nine in the series

The Mendis dismissal is worth revisiting Maharaj was bowling left-arm over into the rough outside to the lefthander’ s off stump Mendis believed he had the delivery covered, padding up as he dealt with the spin

But the ball gripped and bounced, kissed Mendis’ s glove and was brilliantly caught by wicketkeeper Kyle Verreynne, who dived full-length in front of the batsman to grab a one -handed wonder catch

Mendis is the next big thing in Sri Lanka cricket, a player in the dashing mould of Sanath Jayasuriya, now Sri Lanka’ s coach Getting him out was a

moment of class from Maharaj and his keeper, and wrested the initiative back towards the hosts

Maharaj is all too often overlooked in the slightly breathy discussions taking place around the Test side Others are more eye -catching: the dashing Tristan Stubbs, for example, he of the Clark Gable moustache and swashbuckling tendencies; or Marco Jansen called “Plank” by his teammates because he is long and thin

Jansen took 11 wickets in the first Test against the Lankans at Kingsmead in Durban, helping to skittle them out for a record-low 42, in taking seven for 13 He rounded it off to take four for 73 in the Lankan second dig, helping him to record match figures of 11 for 86

That’ s hard cash in the currency of the game, as Jansen, after a long layoff, helped South Africa to a priceless 233-run win, so propelling them up the ladder of the World Test Championship (WTC)

Maharaj does his work in a different register and is less eye -catching Watching him on TV, he looks almost innocuous, but he demands that you look more closely His command of pace the speed of release, in other words is supernatural

And his use of the crease is highly intelligent He can get the ball to rip as far as anyone in the international game

He’ s one of the country’ s

Eye -catching: Marco Jansen’s nickname is ‘Plank’ because he is so tall and thin Gallo Images/Richard Huggard

In sparkling form: Captain Temba Bavuma is back after missing all of the Bangladesh series with an elbow injury Gallo Images/Richard Huggard

life ?????

hidden treasures

All the players already mentioned have made this team more than the sum of its parts There have been others Skipper Temba Bavuma was in sparkling form with the bat after missing all of the Bangladesh series with an elbow injury As a result, you will have seen him batting this summer with a long sleeve, similar to an ankle support He’ s now 34, so he needs all the protection he can get

Not that the need seems too pressing. After scoring 70 in the first innings of the first Test at Kingsmead, he scored 113 in the second, combining for a 249-run fourth-innings partnership with Stubbs (122)

He has been written off more times than he can remember, but he’ s a fighter and, though he’ s not a wildly creative captain, he’ s one for whom his team will run through a brick wall

Smells like team spirit

in your favour

Importantly for this team, they are enjoying their cricket They’ re gobbling catches, Verreynne ’ s catch to dismiss Mendis being a case in point Tony de Zorzi, the left-handed opener, took a screamer to dismiss Prabath Jayasuriya in the first Test while fielding at shortleg, and the catching generally has been of the highest order Smart catching is instructive because it speaks of many things Confidence, for one, self-belief, for another David Bedingham, Aiden Markram and Stubbs have proved smart slip catchers in the mould of Brian McMillan and Graeme Smith Very little this summer has been grassed In contrast, the Sri Lankans have dropped and bungled quite a few South Africa’ s opponents after Sri Lanka are Pakistan, with the Proteas happy to play them at home

Pitches in Pakistan tend not to be bowler friendly You can bowl for days without having so much as a leg-before decision

teams at home, the Pakistanis always have talent to burn If the mood takes them, they can make life very uncomfortable for their hosts

Their recent form has been impressive They beat England 2-1 at home in the three -Test series after losing the first Test in Multan Key in their victory in the second Test, also in Multan, was a century on debut by Kamran Ghulam, a right-handed all-rounder, who held the innings together like glue

His 118 was priceless because it kept Pakistan in the game and, because they batted first, allowed them to bowl at England in the fourth innings on a turning pitch

Here the spinners Noman Ali, who is 38, and Sajid Khan came into their own, bowling England out for 144 in their second innings Ali (an off-spinner) and Khan (a left-arm spinner) took all 20 England wickets in the match

theory about captains, arguing that if you could make a visiting captain’ s life hell, you could bring down his side Masood is a doughty performer but he’ s no Stubbs It will be interesting to see how he fares playing cricket at altitude on a screamer of a deck at Centurion The first Test starts on Boxing Day, before the teams travel to Newlands for the second over New Year’ s

Stay close to the TV

So, these are heady times for Bavuma and his men Who would have thought a year or two ago, with the retirements of so many (Dean Elgar, Faf du Plessis, Heinrich Klaasen) that a Test side would take shape so quickly?

At SuperSport Park in Centurion and Newlands in Cape Town, where the two Tests are being played, the South African attack will find things more to their liking Pakistan have never won a series in South Africa and the Proteas don’t want that to change, especially as they try to accumulate points at the top of the WTC

The WTC is a newfangled competition devised by the International Cricket Council to give more meaning to bilateral series Points are gained for wins (12 points) and draws (four points), with no points accruing for defeats

Teams are ranked on the final log standings (or table) based as a percentage of points won out of the total number of points contested

The Proteas are second on the log Should they remain there, it means that they and Australia will contest the final of the WTC at Lord’ s next year

To do so, South Africa will need to beat Pakistan at least once at home over the next month This is no formality

Though South Africa’ s pace bowlers have traditionally done well against subcontinental

It is difficult to see them being this dangerous in alien conditions in South Africa, but we shouldn’t be hasty in our analysis This is South African cricket Strange things can happen and frequently do

Two other Pakistanis locals might be familiar with are the skipper, Shan Masood, and the wicketkeeper, Mohammad Rizwan Much will rest on Masood, a left-handed opening batter born in Kuwait

The Aussies used to have a

But this is what’ s happened. Almost without looking, South Africa has a dynamic, hungry side, keen to go to Lord’ s for the WTC final next year Who would have thought it? International sport can be the strangest of places and tell the oddest, most unlikely stories

That this team isn’t richly talented (it contains no Dale Steyn and no AB de Villiers or Jacques Kallis) only adds to the excitement They play for each other and scrap as if their lives depended on it, and so we love their commitment and gees

It’ s going to be an interesting Test summer If you can ’t get to the grounds, don’t stray too far from your TV x

Hidden treasure: Keshav Maharaj during day 4 of the second Test between South Africa and Sri Lanka in Gqeberha

Swashbuckling tendencies: Vishwa Fernando of Sri Lanka tries to get Tristan Stubbs of South Africa out during the first Test in Durban

Gallo Images/Darren Stewart

FOOD THERE’S NOTHING MODEST ABOUT COY

With luxury on the one side and austerity on the other, chef Ryan Cole has found a sweet spot at the V&A Waterfront

Adele Shevel

● Ryan Cole often walked past an empty building on the V&A Waterfront in Cape Town, wondering why no-one had snapped up the location in a place where there were many restaurants but few with such a remarkable view.

The venue was “hidden in plain sight” , says Cole It had the luxury of expensive yachts on one side and the austerity of fishing trawlers and a fish factory on the other It was in an unassuming spot, separated from the main madding crowd by a bascule bridge one that swings open that allows sea traffic into the V&A’ s marina He set up shop there and called his place, appropriately, Coy Not that Cole, voted chef of the year in 2023, is shy about what he serves

There’ s a seven-course menu as well as a cheaper version, offering just a starter and main,

along with bread and snacks

Whatever the menu, Coy’ s food features ancient grains and African staples such as samp Dessert can be based on the chefs’ concept of what would be provided at teatime by their grandmothers: roasted rhubarb and strawberry jam, topped with toasted Otees, or lemon cream ice cream and Ceylon tea foam with some raspberry sherbet, along with a madeleine (in this case a koeksister)

Cole has now moved from the seclusion of one setting to another in the busiest, and certainly the most lavish, part of the city In 2018 he opened Salsify, a restaurant in the Roundhouse, a hunting lodge from the early 18th century on the slopes of Lion’ s Head among the pines overlooking Camps Bay His partners were chef Luke Dale Roberts and former Springbok Ray Mordt During Covid Cole took over from Dale Roberts and he and Mordt are now partners in Coy Business in the culinary trade is competitive, but Cole says he enjoys it “I love the industry, I love the hours, I love the pressure, I love the dilemmas, I love the challenges I’ ve never wanted to do anything else I’ ve never done

anything else since I was 16 ”

At that age he was in matric and on weekends worked in the bakery at The Vineyard hotel in Claremont Two days after finishing his school exams, and aged 17 by then, he started working full-time at the hotel He wasn ’t allowed to sign a contract until he turned 18 the following year

Now, in his new place, he is eager to expand beyond the tasting menus he made famous at Salsify “So it’ s a completely different experience, but it’ s definitely part of the same ‘family’ , ” he says “It’ s like the cool younger sibling of somebody that’ s fully grown up, which is Salsify ”

The proximity of the sea resonates with Cole’ s background: his father is a retired fisherman, and his brother followed in those footsteps For his restaurant, Cole focuses on sustainable, seasonal and local catches

But he doesn’t go in for “signature dishes” He says this is “ a good way to keep reinventing yourself ”

Cole has transformed the once empty building into an elegant space of Afro-chic with a dark palette imbued with lightness in the chairs and eye -catching artwork The blackened wood panelling on the walls and floors references the ancient art of cooking over fire; it has contrasting amber accents that flow through the artwork, fabrics and lighting There are views of the ocean and Table Mountain

Head chefs Geoffrey Abrahams and Teenola Govender talk customers through the choices of three starters and three main courses Our first course was maize chip with tahini and roasted shiitake, plus red lentil fingers with blatjang and cashew The second was bread, fermented amadumbe sourdough with kefir, konfyt and bokkom

The smoked seafood was a play on the classic combination sandwich of cheese and chocolate, with smoked Stanford cheese, cashew crumbs and Mrs Balls chutney on top, accompanied by mango atchar foam

For the main starter, I went with tuna tartare followed by seared line -fish with cabbage and spiced chimichurri My dining partner decided on the smoked aubergine and pepper tabil The samp and lamb were excellent

The wine menu features lesser-known labels, and the bar, called No Reservations, encourages pop-ins so you can arrive, sip a cocktail and sample the menu x The writer was a guest of the restaurant

Jan Ras Photography

The chefs: Teenola Govender, Ryan Cole and Geoffrey Abrahams

The view: Coy restaurant at the V&A

backstory

Giulio Airaga MD of Desco

What’ s your top tip for doing a deal?

Listen carefully and take your time to think things through. Find someone you trust, explain the deal and talk it over with them Ask for their critique of the benefits you see. In our family business, we share deals with each other, discuss them and offer constructive feedback.

What was your first job? Bookkeeper.

How much was your first pay cheque, and how did you spend it?

It was R5,000 I put it in an investment account and bought what I needed

What is the one thing you wish somebody had told you when you were starting out?

You can’t do everything on your own, even if you’re the best at it. To scale and grow, you must delegate. If growth is your goal, you need to consistently “fire” yourself from your current tasks. Having a strong team around you is essential for this.

What is something you would go back and tell your younger self that would impress them?

The value of a trade skill is often greater than what can be learnt at a university It’s important to diversify your practical, handson skills. A company experiences faster growth through knowledge sharing and networking than from textbooks.

If you could fix only one thing in South Africa, what would it be?

Foster a cultural shift towards greater environmental awareness and promote a strong recycling mindset.

What is the hardest life lesson you ’ ve learnt?

Be cautious about who you trust in business Strong relationships take time to develop. There can be a lot of smoke and mirrors, with some businesses presenting themselves as more than what they really are. On the other hand, you may also encounter humble, unassuming individuals who are exceptional to work with and can significantly help you grow your own company.

What’ s the best book you ’ ve read recently and why did you like it?

Your Next Five Moves by Patrick Bet-David offers practical business advice relevant to day-to-day decisions and long-term strategy It emphasises the importance of thinking several steps ahead, rather than just reacting to the present. Bet-David highlights the abundance of “blue ocean” opportunities, but stresses that success relies on your ability to sell if you’re not selling, you’re just working He encourages shaping your business around a clear purpose, rather than simply chasing money M oney, on its own, is not a sufficient goal because it has no limit. If money is your objective, set a specific target and define how you will achieve it, so you have measurable criteria for success, even if that means facing the possibility of failure Many people avoid setting clear goals out of fear of failing, especially when those goals are self-imposed Bet-David also warns against wasting time on distractions, such as social media or spending time with friends who don’t challenge you to improve.

What’ s the worst investment mistake you ’ ve made?

Fifteen years ago, we purchased a PCB shredder, and we still have it However, it didn’t perform as promised. We bought it with insufficient information. Though it worked for a short period, it kept getting blocked and stopped functioning. In hindsight, we should have tested it for a longer time

What’ s the best investment you ’ ve ever made? And how much of it was due to luck?

Licensing the facility more than 15 years ago has proved to be a worthwhile investment. The compliance has paid off, not through luck but through consistent effort and absorbing the costs.

If you were President Cyril Ramaphosa, what would you change, or do, tomorrow?

The private sector is crucial for driving and enhancing the economy. Instead of burdening industries with excessive regulation and multiple taxes, we should support them

Taxation often feels like a black hole for businesses, as they rarely see a return on their contributions to the state

If private industry were given incentives to invest in infrastructure improvements, it would be a more effective use of resources, allowing companies to contribute positively to communities beyond their immediate areas Imagine if businesses could use tax funds to invest in energy infrastructure, with the stipulation that a certain percentage, if not all, would belong to the state. In this scenario, the businesses responsible for financing these projects would ensure their implementation.

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