Interest rates in South Africa, like most countries, are based on the prime interest rate.  The prime interest rate at the moment is 9% and then depending on how a bank rates you as a risk they add onto that 9%.  The better the risk you are considered to be, the lower your loading on top of that 9% will be.  That rate is about as low as one can expect in South Africa and by all accounts it is going to rise over the next few years and when one makes purchases, whether of a car or of a house one must always budget for that.  The Reserve Bank in America has indicated that it is looking increasing interest rates, most probably at the beginning of next year and when it does so, so will most of the rest of the world begin to increase interest rates.  At the moment our inflation is at 5,9% and the Repo rate is at 5,5% and so we are likely to see a prime rate of at least 11% in the future, and possibly 12% and if the Rand weakens over the next few years there is always the possibility of it going higher.  What does that mean for you?  Well, it would obviously depend on the agreement that you have with your bank, but if one is looking at the interest prime rate going up about 2% to 3% over the next two years, and possibly more, then you can assume that whatever interest rate you are paying will also increase by a further 2% to 3%.

This is the time of the year when most of the major companies in South Africa arrange for their staff members to get flu injections.  It is also the time of the year when staff members run around with doctor certificates explaining that they cannot get a flu injection and while there are some valid reasons, most people who are opposed to vaccinations or flu injections simply have it wrong. There is not a shred of evidence, for example, to show that vaccinations cause autism, even though there are some prominent believers in that theory, including Ernie Els, that has led to a trend, in some States in America, where people have stopped getting vaccinations for their children.  The fact that their children then don’t fall ill from dreaded diseases like smallpox is proof to them that the vaccinations are not necessary.  

They of course forget that they are surrounded by people that have been vaccinated and that as the numbers of those who are skipping and avoiding vaccinations grow, so too will the reoccurrence of these terrible diseases.  Flu is not the same, but the principle is similar. Those who try to avoid having the injection are actually riding piggy-back on those that do have the injection and quite honestly I think it is unfair.  It is a minor little prick, it is nothing for anybody to be scared of and particularly in offices where a lot of people work together, in the same space, it is essential.  My offices used to be plagued with flu issues during the peak of winter before I started arranging for, and paying, a nurse to attend at my offices to give everybody the injection and since my staff members started having the injection, we never had a serious outbreak of flu at our offices again.  

It is particularly important when some of those in the office, for example, are pregnant.  Making sure that everyone around them has had the flu injection also adds considerably to their safety.  Doctors in particular recommend that the elderly get the injection, because as we all know flu can quite often be fatal for the elderly and for anybody with a compromised immune system.

There are no easy answers to the annexation of Crimea, but I do think that the Western powers have involved themselves in a fight they won't win.  It suited many of them, on many different occasions, to hold referendums to allow people to determine their fate.  Now that the Crimeans held a referendum in their country, where the result was always a foregone conclusion, everybody slates it as being illegal and unconstitutional.  It looks worse once you have seen a 96% result by the Crimeans in favour of joining Russia.  The fact of the matter is that Crimea has a very complicated history and while Ukraine was part of the USSR, Crimea was given by Russia to the Ukraine.  It only happened approximately 50 years ago and so it is certainly not the case that Crimea has been a part of Ukraine, while Ukraine has been an independent country, for all eternity!  

Ukraine is a relatively new country, once it broke away from the USSR, and the vast majority of people that live in Crimea are in fact Russians.  I don’t feel particularly strongly about the issue because on the one hand we cannot have all people, living in different areas of the world, having votes all the time to decide which country they form a part of, but on the other hand the result is overwhelming and it would seem to make little sense to force the people to remain within the Ukraine if clearly they do not want to be – however valuable that land is of course to Ukraine.  On the other hand, I really don’t think that the issue is serious enough, given the history of Crimea as well as how the votes have gone, for the European powers as well as America who obviously have a cold war history with Russia, to start threatening sanctions, etc.  One has to see Ukraine in the proper perspective and that is that its whole yearly GDP is worth less than the Walt Disney company share on the New York Stock Exchange.  Nobody is getting murdered, there is not ethnic cleansing going on and all that has happened is that people living in an area, have decided that they want to form a part of the country that they always belonged to in the past in any event, namely Russia.

For the Western powers and the media to be meeting with the “government” of Ukraine is also ridiculous – Ukraine has a government and a President who, however unpopular, was overthrown and the current “government” have not been elected by anybody. They need to be elected before they can have any legitimacy.  On the other hand I do see the West's concern with Putin - who seems to develop more dictatorial tendencies every year he is in power.  They clearly want to send a message to him that they won't allow him to go any further - but I just don't see him backing down on Crimea, nor the West doing anything about it so my point is that this is probably not the fight to pick with him - but if the real reason is to stop him going further down the road and trying to annex another territory, that's another story.

The South African Reserve Bank website can be found at www.resbank.co.za and it details the role of the bank to achieve and maintain price stability so that we can have balance in sustainable economic growth in South Africa.  AMCU need to hear that, with their ridiculous wage increase demands.  What is important for most employees at this time of the year is the consumer price inflation rate, otherwise known as CPI, which indicates how much prices have risen from one year to the next.  The latest figure available is that CPI is 5,9% and that will guide most increases given in South Africa – those who have done well will get 5,9% or perhaps more, depending on what industry they are in and those who have not worked hard in the last year, or are unfortunate to be in an industry that is struggling are likely to see less than that rate, if any increase at all.

The latest sporting event, apart from all of the amazing ones ahead this year, like the World Cup, is the T20 Cricket World Championships.  Cricket is starting to have more and more championships, and that can only be good for our national team – who have never won anything yet.  I would imagine if we have three tournaments a year, that within a decade, we could finally win one of them!  One never knows that this particular game, which leaves so much to chance and pure violence in terms of smashing the ball, may not be the one that we finally win.  

I have been particularly impressed with the striking ability of David Miller and of course Dale Steyn is an incredible bowler - so hopefully, having just been thumped by Australia in South Africa, we will go there with lowered expectations and possibly over-achieve.  This format of the game does however seem to suit the Indian side particularly, especially with their IPL Series which gets them a lot more experience in this form of the game and so, I would still expect that the most likely winners of the tournament are either India or Australia – but we can all pull together for South Africa this time – once again!

I enjoyed a recent article by Magnus Heystek on MoneyWeb.  You can read the article here: http://www.moneyweb.co.za/moneyweb-the-money-whisperer/opinion-flogging-a-dead-horse-gets-you-nowhere It dealt with the sliding sales of newspapers in South Africa and how for example the Saturday Star has gone from selling 180 000 copies every Saturday to less than 80 000 per edition now.  It is one of the reasons I don’t advertise in the printed media, and here I am talking about newspapers mainly.  Over the years they have put up their prices and they simply do not deliver real value compared to other media.  

That is not however what the article is about – it is about how Magnus who has declined to advertise in the Saturday Star because he says that every single week the Personal Finance section, for example, lays into the financial media and attacks them.  He says he supports freedom for the press but that there are also consequences to what you write and he cannot continue to persecute an industry continually, and then expect that same industry to support you with advertising.  He mentions that when he was a journalist at the Star, it was a condition of his employment that they were never allowed to write anything negative about estate agents or the property industry, given the huge property supplement that appears in the Saturday Star every week.  In short, he is saying that freedom of the press has a price to pay, and that is if they attack the same people all the time they cannot expect those people to support them and by flogging a dead horse will get you nowhere.  

It is an interesting debate because it is very easy to take the moral high ground and explain that the media should be allowed to write exactly what they want to write, and have no regard to advertising, but on the other hand, I am not sure that all the negative criticism works – if it did, would newspapers sales have plummeted as much as they have?  One of the problems of course is that by the time you get the newspaper much of it is old news, and the rest of it is rehashed PR releases – but that is another topic and another blog article!

One of the enduring puzzles of the current time is what has happened Malaysia Airlines flight MH370? To me the evidence initially clearly pointed to something going wrong the flight crew or a passenger in terms of deliberate actions stop these modern planes, in this case the Boeing 777 are meant to be so advanced that most people believe that it cannot be a mechanical problem.   That of course is reassuring in some ways - it makes you feel you are safe in aplane and it cannot blow up mid air anymore!

One has to wonder what the situation is, and where the plane is although I think that part is probably going to be easier to resolve – not in terms of finding – but in terms of its almost undoubtedly being in the Indian Ocean somewhere. The how it got there is another question and I read interesting article on Wired which suggesst that it must have been an electrical fire. The article can be read here. The writer makes the point that the left turn would have been to try and access an airport and that the actions were not to deliberately sabotahe the plane or hijack it. He believes that the plane rose to 45000 feet in a last effort by the pilots to try and quell a fire by seeking the lowest level of oxygen and that at some point thereafter, everyone lost consciousness and the plane kept on flying until it ran out of fuel and crashed into the Indian Ocean.

We all know that schooling these days cost far more than ever before, and it is one of those purchases that parents feel bad about not making – in other words, they don’t skimp on schooling and spend probably a little bit more than they can afford in an effort to get the very best for their children.  It is interesting from that point of view to read the results and the profits of two Stock Exchange listed companies, which make their profits out of the schooling system. Those are Curro and AdvTech.  AdvTech has as its main education brands Crawford, Abbott and Trinity.  A recent article in the Financial Mail suggested that the average revenue per pupil in an AdvTech school is R57 000,00 and earnings before depreciation and tax are R14 000,00 per pupil and in a Curro school the earnings are R31 300,00 and the earnings before tax, etc are approximately   R5 400,00 per pupil.  

It shows that there are a lot of profits to be made in this sector of business and many of those with children in school forget that that is exactly what it is – a business. The business has to pay its staff and has to make a profit for its shareholders.  In the case of Curro, people believe that it is going to be so profitable in future years that its current share price is trading at a PE ratio of 220.  That means, at its current earnings, when the market averages say 17 or 18, it would take 220 years for the company to earn the equivalent of its share price.  That is an outrageous valuation, but it suggests that most people believe that the profits are going to double and possibly treble year after year for many years as this company grows and also illustrates how valuable those driving up the share price think this sector of our economy is.  

*I do not own shares in either company.

This is your opportunity to tell me what your favourite websites are, what you either find most interesting or most useful.  What would you look at in the evening or in your lunch break?  You can exclude dating sites, because nobody is going to own up about that but otherwise it will be fascinating to hear!  I find that the websites that are opened the most are the New York Times, PGAtour.com and a share broking account.  That is excluding the site that is opened more than any other, which is my firm’s own E-file website.  What do you look at the most?

Since the beginning of this year there have been 31 aircraft accidents in South Africa.  That is an incredible amount and it was brought home to me on 3 February 2014 when in very heavy weather, a King Air plane crashed at Lanseria Airport, killing three people.  I drove past the remains of the plane, day after day, for some time, and it troubled me considerably.  

Far more people die on the roads than in aeroplanes, but there is a sense of powerlessness when you are in an aeroplane, because you are not flying it, that perhaps makes people worry more about that.  What worries me is that the vast majority of the incidents involve people with 500 hours or less of flying time and the salaries that pilots earn are simply not high enough.  I think flying people around is a huge responsibility and I am shocked when I hear that pilots of huge passenger aeroplanes in America for example only earn about $22 000 a year.  I would have imagined that the salaries started at about $50 000 and go upwards.  Air safety is a huge concern in the American media as well because they have a considerable number of pilots that are going to be retiring at the compulsory age of 65 over the next few years, and they are struggling to replace them adequately.  The struggles relate to the fact that firstly it cost a fortune to qualify as a pilot – up to $100 000 and once you have spent all that money qualifying, you then only earn $22 000 a year!  Something has to give in this picture and of course if there are enough accidents, and one hopes it does not have to be that way, and enough shortage as pilots retire, salaries will inevitably go up and will then attract more talented and experienced people to fly the bigger aircraft, etc.  The problem is, for air safety, this needs to happen a lot faster.  Modern planes are extremely sophisticated and there are very few accidents that are actually as a result of problems with the plane – they are just about all related to pilot error – and one does not feel comfortable knowing that maybe the pilot of your plane has 200 or 300 hours of experience.

I don’t remember, apart from perhaps Cyclone Domoina in 1984, when I lived in Hillcrest in KwaZulu-Natal, a time when there has been so much rain.  That of course was an intense amount of rain over three or four days, but what we have experienced now for almost two weeks is something that I really do not remember in Johannesburg.  We often do have wet weekends during March and April, as we say goodbye to the summer rains, and they almost always coincide with Club Championships at most local golf courses – as they did again this year, but I still don’t remember it raining so heavily for 14 days.  

My garden is absolutely saturated, my basement area, which was not properly built or designed – lawyers are still to decide which it is, if not both – is wet again and I like most people would actually like just a bit of break from the rain right now!  It is easy for us, who live in secure brick structures, and who drive to work in cars, and then work in a safe and secure area and a well-ventilated building, of course to forget that there are many others who are no ways as lucky as us.  The vast majority of our country is living in shacks, and are surrounded by pools of water.  Those living on the edge of rivers, as is common in many townships, have either seen their houses flooded or in some cases washed away and of course there has been an increase in drowning’s all over South Africa.  Still, I cannot help but hope that today is a changing point in the weather and that this season will come to pass.

I was very disappointed to hear that Multichoice of planning to close horseracing channel, Channel 239. That is because they say that it is not popular not and not enough people watch horseracing. I do hope it’s a decision they’ll reconsider, because it will be a huge blow to the life of the horseracing industry in South Africa. 

The horseracing industry is, in itself a major employer in South Africa with each course generally having at least one group, and so the more you chase people away from owning racehorses or been involved in the racing game, the more you will unfortunately adversely affect employment in South Africa. There are not that many industries that actually employ as many people, and in horseracing it’s all on the back of the owner.  If the owner, for example, has 20 horses, it means that that owner is probably keeping 20 people employed – apart from what he or she may be doing at his or her main business. It is shortsighted decision by Multichoice, and while I appreciate that obviously more people wish to watch Fashion TV, and girls strutting up and down in lingerie, that channel certainly serves far less purpose, and does nothing for employment in South Africa, compared to racing.

We have had more than a week of coverage already between not only the international media and the local media but also new channel – Channel 199. I’d love to know what the what your opinion is of what you’ve seen on the channel so far, what you like and what you don’t. I think it’s been an eye-opener for a lot of people were not aware as to what goes on in a trial in from that point of view it’s been very good. It’s also been running fairly slowly, with lengthy breaks, and delays and one wonders how long this trial is going to last – it could easily be 3 months.

What I haven’t enjoyed about the coverage, is it when I get home after work I do actually like to see more made of the highlights of what happened in court rather than to see a bunch of talking heads discussing what happened in court. It’s very hard to believe those talking heads, when in some instances you know that for example they are not criminal advocates or people who have actually been judges in South Africa. In other words, somebody is introduced as an advocate of the Johannesburg Bar and who is an expert presumably on this area and you know full well that normally when he or she is in court, they are actually dealing with the Road Accident Fund matters. It’s not going to affect the man in the street, who believe that person is an expert, and compared to the man in the street they said they probably are, but for me it’s just a little bit hard to believe when I know the person is certainly not an expert in that area.

I have written before about calling Johannesburg a world class city, but it was driven home to me again on 4 March that we are not close to a world class city.  It took many of my staff members nearly 2 hours to get to work simply because it has rained for a few days and once again all of the robots are out of order and top it off, when they arrived at work, there was no electricity in the suburb of Parkwood!  

It really is very difficult to compete, on an international scale, when we are so uncompetitive when it comes to the basics – a business cannot run very well without electricity and while we have a very expensive UPS system to run the computers for a few hours, that is another cost of doing business in South Africa.  It absolutely blows my mind however that the City of Johannesburg simply cannot sort out the robot problems and that every single time it rains a commute that should take people 45 minutes turns into 1 hour 30 minutes or 2 hours!  In most countries the people running the city would be voted out of office if they allowed such a situation to continue and it is rather sad that as South Africans we are forced to accept that just because it rains, robots will stop working – as if they cannot be waterproofed and there is no defence against rain – and they cannot be fixed timeously either – they will stay out of order no doubt for days, if not weeks.

I thoroughly enjoyed the movie American Hustle, which is not about any topic of great consequence but certainly has some fantastic acting.  It received 10 Academy Award nominations, including Best Picture, Best Director and Best Writing and while it did not win any category, there were also a number of nominations for acting for the movie.  It stars Jennifer Lawrence who is nominated for an Oscar for her role as Best Supporting Actress as well as Christian Bale who is nominated for the Best Actor Award and a great performance Amy Adams who is also nominated for the Best Actress Award.  In fact, it is only the second film since 1981 where an actor or actress was nominated in each of the four acting categories and the one I have not mentioned so far is that of Bradley Cooper as Best Supporting Actor.  So, it is a movie with a great script and fantastic acting about a con artist couple. The movie received a 93% rating on Rotten Tomatoes. 

The report into the SABC and the Acting Chief Operations Officer, Hlaudi Motsoeneng, saw some surprise reactions from people supporting Mr Motsoeneng.  The Public Protector, Thuli Madonsela, found that he had been irregularly appointed and that he is also paid in excess of a capped salary allowance.  In one year alone his salary has increased three times from a total of R1,5 million to R2,4 million, which was exceptional considering that he had no academic qualifications.  

Luckily for him, the former SABC’s board chairperson, Dr Ben Ngubane, when advertising for the position, removed the academic qualifications that had been previously advertised so as to ensure that Mr Motsoeneng would be able to get the job.  The academic qualifications were important because the man who was the Chief Operations Officer of the SABC never passed Matric.  By his own admission, he stated in his application form to the SABC that he had passed Matric and he filled in made up symbols – so he got the job in the first place improperly and got promoted in 2013 to a post of executive producer also on an improper basis.  He apparently purged the SABC of numerous staff with whom he had disputes.  The Communications Workers Union has however said that the report of Thuli Madonsela is the views of the DA and that she is simply speaking on behalf of Helen Zille and the white minority!  In rejecting the report, which exposed all of this, they say, “We violently reject the report” and that Thuli Madonsela is a “foot soldier of the white minority”.  It is quite sad that institutions are allowed to be rubbished like this, simply because people have agendas when the Public Protector was set up to do exactly that – to protect us all.  The website of the Public Protector is www.pprotect.org. 

Yesterday’s topic was Oscar and today’s is The Oscars which of course took place in Los Angeles on Sunday night. One thing about The Oscars is fairly predictable is that, as I’ve written before, the betting websites certainly give you a very good indication of is going to win each award. In some ways that removes much excitement because there is not much uncertainty on most of the winners.

The hot favourites in the betting win everything every year and is only where the betting is close that sometimes there is a surprise. For example, 12 Years a Slave was almost guaranteed to win best picture and Cate Blanchett was far away the hot favourite to win the award for Best Actress.  Some of the awards are listed below and if you’ve seen any of the movies I like to hear what you think and which ones you still plan to see.

86th Academy Awards winners

• Best Picture - 12 Years a Slave
• Best Actor in a Leading Role - Matthew McConaughey (Dallas Buyers Club)
• Best Actress in a Leading Role - Cate Blanchett (Blue Jasmine)
• Best Actor in a Supporting Role - Jared Leto (Dallas Buyers Club)
• Best Actress in a Supporting Role - Lupita Nyong'o (12 Years a Slave)
   

There is only one topic in South Africa today, and it’s a huge international topic as well and that is the case of Oscar Pistorius. It’s going to be televised, it’s going to sell newspapers and magazines and it’s of course going to be a huge topic of discussion whether you are at work, or gym or just round the dinner table at home. The attorneys in my firm, who spend quite a bit of time in the North Gauteng High Court, which we also refer to the Pretoria High Court even though that is not the correct name, are going to see some of the media circus firsthand whenever they go to court with clients.

To me, the only thing that is reasonably certain is that Oscar is going to spend some time in jail – because a human being has been killed and there has to be, to my mind at the very least some negligence involved and the only question is whether or not they will be able to prove a case of murder. Today is a good day to hear from you as to what your predictions are for how this case will turn out, how long it’s going to take and what the ultimate verdict will be.