Local investors can now gain exposure to Facebook, one of the worlds’ most anticipated IPOs, without using their foreign allowance allocation.

Priced at $38 per share, Facebook’s initial public offering is expected to generate at least $16bn. This makes it the third-largest IPO in US history and by the largest of any US internet company.

A statement released on behalf of the JSE states exposure to Facebook is through the suite of Single Stock Futures (SSFs) listed on the JSE that track performance of the selected international companies. Called International Derivatives or IDX, the range of products includes SSFs on companies such as Nokia, Louis Vuitton, Bank of America, Apple and Berkshire Hathaway.

“These derivatives offer local investors the opportunity to gain exposure to international blue-chip companies without dealing with a foreign bank or broker,” says Magnus De Wet, Manager: Derivatives Specialist at the JSE.

The Facebook SSF can be purchased through any JSE-registered broker in the same way that one would purchase local derivatives products. While retail investors and corporate entities do not have any exchange control restrictions in trading the instrument, institutional investors do have to comply with foreign portfolio regulations.

The directory features all the SMMEs that are part of the Shanduka Black Umbrellas programme and which have been taken through a rigorous assessment process prior to inclusion in this directory. In addition, 100% black-owned businesses from around South Africa (although not appraised by Shanduka Black Umbrellas) are encouraged to showcase their enterprises to the nation at large by registering their businesses in blackpages.

See the compete directory here: Black Pages

The Reserve Bank’s monetary policy committee (MPC) meets again next week. Economists expect no change in the repo rate (currently at 5.5%, prime at 9%), but the important news will be the guidance that Bank Governor Gill Marcus gives about the future course of interest rates. Will Marcus indicate that she’s ready to cut interest rates should global conditions deteriorate further?

Not up for discussion

For the past two MPC meetings, the possibility of further interest rate cuts from present three-decade lows wasn’t discussed. The reason for this was twofold:  First, the Bank became more concerned about inflation, which is above the 6% upper limit of the target range. Second, it seemed a new global economic crisis sparked by the fiscal troubles in the eurozone had become less likely.

The Bank has two aims that are sometimes in conflict – it has to fight inflation, but it also has to promote economic growth and job creation. Sometimes raising interest rates to bring inflation into its 3%-6% target range causes costs that are too high because of the economic growth and jobs lost. In that case, the Bank will refrain from hiking rates. That has been the case for some months now, with the Bank refraining from raising interest rates despite inflation breaching the 6% target.

Large scale losses

But there is no long-term trade-off between growth and inflation. If the Bank goes for growth and forgets about inflation, growth will eventually implode and jobs will be lost on a large scale as the economy counts the costs of inflation that’s out of control. That’s why Cosatu’s views on the Reserve Bank are so wrong.

The Bank takes a risk every time it ignores the inflation target and it has to be very sure of itself that the risk will pay off and that inflation won’t spiral out of control. So far, the Bank has been able to tolerate inflation being out of target because the economy is too weak to generate the bottlenecks that would lead to an intolerable inflation spike.

Another reason is that inflation has been largely caused by exogenous shocks – fuel, food and electricity prices. This is known as “cost push inflation.” These shocks aren’t responsive to interest rates and the Bank will tolerate them – but not if there are “second round” or knock-on effects on other prices.

Risk assessment

These second round effects have now become more evident, and the last MPC statement commented: “The MPC is of the view that while the main pressures on inflation are of a cost push nature, there is some evidence that these pressures may be becoming more broad based.

However, these developments are in line with our previous forecasts and are expected to remain contained by the relatively subdued state of the domestic economy. Although at this stage the Committee assesses the risks to the inflation outlook to be fairly evenly balanced, greater vigilance will be required going forward.”

That’s a roundabout way of saying the Bank is watching the inflation rate excluding food, fuel and electricity. This “core” inflation rate edged higher to 4.4% in March – still low, but rising and the reason why the Bank sounded a more worried note about inflation than before. However, most in the market expected growth concerns to continue to dominate, keeping interest rates unchanged until March next year.

Stagnation

Since the last meeting of the MPC, growth concerns have heightened considerably. The last MPC statement said: “The intensity of the financial crisis in the eurozone appears to have subsided somewhat, but the very mixed signals indicate that the crisis is not necessarily resolved.” Now that it’s clear that Greece may precipitate a break-up of the eurozone, the crisis has flared up again.

The current situation isn’t yet cause for an interest rate cut in SA. The situation is complicated by the fact that the crisis is causing the rand to weaken, which is bad for inflation. At the same time, it’s important to note that the eurozone has avoided a technical recession, and is stagnating instead, because of strong growth in Germany. For the moment, it’s right that interest rates should stay unchanged.

Even if Greece leaves the eurozone, this won’t be reason enough for SA to cut interest rates. It’s only if the “troika” of the European Central Bank (ECB), the International Monetary Fund (IMF) and the European Union (EU) fail to manage the Greek exit that Marcus should act. In that case the global economy will be in crisis and the whole world will be injecting liquidity into markets. SA will be no exception. An interest rate cut will only occur if the world is back in crisis.

• Marc Ashton, Finweek editor, on this week’s cover story -  Eskom Price Shock by Garth Theunissen;
• Mia Kruger, from Kruger International, on her trip tot he Berkshire Hathaway AGM;
• Ben Pierre Malherbe, CEO of Calgro M3, on recent great results;
• Chris Schutte, CEO of Astral Foods, on their results and tough maize prices and imports;
• Alan Halloway, CEO of Ansys, on getting it right in the latest results with rail and mining and
• Francois Diedrechsen, FD of Raubex, on tough set of results and BEE partner selling 5m shares.

It’s a harsh assessment of the Rainbow Nation given that the term is more typically used to describe the likes of Russia where journalists, critical of the state, are frequently found dead, or Singapore where laws make government opposition difficult. Yet it’s hard to argue that SA is not moving slowly towards pseudo- democratic territory. We may have the world’s most liberal Constitution, a feisty media and an independent judiciary but all of them are functioning under increasing implicit duress.

Reversing gains

None other than President Jacob Zuma wants the Constitution amended – not just once, but annually. ANC secretary general Gwede Mantashe, who has in the past accused the judiciary of being counter-revolutionary, last year criticised judges for undermining the government Government and seeking to “reverse the gains of transformation”.

The ruling party is also lobbying for the establishment of a tribunal to regulate the media, not to mention its desire to make it illegal to report on state State information.

But perhaps most worrying is the growing intolerance in South Africa’s public discourse, which reached a new nadir this week when Cosatu supporters violently attacked DA members for attempting to hand over a memorandum to the trade union requesting that it abandon its alleged opposition to a youth wage subsidy.

Provocation

Cosatu, a movement that has for too long simply turned a blind eye to violence and intimidation by its members, argued that the DA’s march had provoked its supporters. It’s a ridiculous argument by a federation that just a few years ago threatened to protest outside the Reserve Bank during monetary policy meetings until interest rates were reduced to “acceptable levels”.

Had the MPC members used Cosatu’s logic they would’ve lobbed bricks down at union members for daring to provoke them during an interest rate decision.

Sadly, Cosatu’s violent intolerance to views that differ from its own is symptomatic of a societal small-mindedness that has taken root in SA. So successful has the ANC-led alliance been at branding anyone who disagrees with it as being either racist, or an instrument of racists, that any public utterance against the ruling party is now viewed with almost as much disdain as if the offender had sprayed the dreaded k-word all over Twitter.

Justifying violence

One of the more disturbing things to emerge from the DA’s clash with Cosatu was how many callers to radio stations and commentators on social networking sites seemed to justify the violence against the country’s official opposition. Many also questioned the credibility of the mostly-black DA marchers, dismissing them as a sponsored “rent-a-crowd”.

The irony in the insult, which implies that black people are incapable of deciding for themselves which what political party they’d like to support, was apparently lost on these critics.

Amidst the insults, the arguing and the opinions, the Twitterverse did provide at least one call for reason and introspection.

“Telling how many people find it hard to condemn anti-democratic acts just because they dislike the victim of such actions,” tweeted veteran journalist and author Max du Preez.

Speaking of job creation, Tuesday saw the unemployment saga continue over Cosatu’s stand against treasury’s introduction of the youth wage subsidy, leading to the Democratic Alliance (DA) marching to Cosatu House in Braamfontein. And we all know how that turned out.

Unbiased view

Now this column is not about pointing fingers at who’s right or wrong and it’s definitely not about politics because I maintain a neutral stand; I am not affiliated with any of the parties involved. This column is about trying to understand what the impact of introducing the youth wage subsidy will mean for the ordinary unemployed youth who has never worked before.

It’s been said that “Money makes the world go round”, so I decided to literally look at what the numbers say.

It’s been reported that finance minister Pravin Gordhan put aside R5billion for the initial first phase of the youth wage subsidy project. I had a look at Helen Zille’s speech. It reads: “The Youth Wage Subsidy will create 400 000 first time job opportunities for young South Africans. That would mean 400 000 more people working in South Africa. Four hundred thousand more families with an income to rely on. Four hundred thousand more families with renewed hope of a better future. Suddenly, exponentially, 400 000 benefits millions”. The key phrase seems to be the “400 000 jobs”.

Put in context

Now, R5bn seems like a large amount, but you’d be surprised how much that number shrinks once put into context. So I took the liberty of punching in the numbers to calculate what the youth wage subsidy would mean for young first time job opportunity seekers (between 18 and 29) and their families.

If R5bn were to be used to employ 400 000 youth, each youth employed full-time earning below R60 000 per annum would be subsidised at R12 500 per year or by about R1 000 (R1 041, 66 to be exact) a month. And the following year of experience employers will be subsidised R6 000 for each employee.

A person with an annual tax threshold  of R60 000 will earn a monthly salary of up to R5 000. Let’s say a first time employed youth earns half of that, meaning R2 500, the reality is that as soon as you are working, whether for experience or not, there will be several mouths in your household waiting for you to feed them.

Nuclear meltdown

Those of us who grew up in townships and still live in townships know that the idea of a nuclear family with a mom, dad and kids has been replaced by larger extended families made up of grandparents, aunts, uncles, their kids, nieces, nephews and grandchildren who all rely on sole bread winners, or worse, no bread winner. This brings us to the flip-side of this coin, a lot of young people have basic qualifications, but cannot land a job because they have no on-the-job experience.

But if I am young and earn that amount and the family expects me to pull my weight to help out the family, how will I make ends meet in the next year or two of trying to gain work experience? The cost of living keeps rising and hungry families don’t see logic nor understand their child waking up each morning to go to work, but not be able to put food on the table. To them, you cannot eat experience.

This unemployment issue seems to be a bit of a catch-22 situation. If the unemployed don’t lose not by staying at home without jobs then it seems they may be exploited in the short term or long run depending on how fortunate they are in getting a job after gaining some work experience.

Yes, the Youth Wage subsidy will boost job creation that will in turn boost the economy, but that is a short term view. Isn’t this subsidy a bit like putting a plaster onto a problem instead of solving the underlying issues, just like the World Cup job creation opportunities, instead of looking at long term solutions? Perhaps. But so far we’ll have to wait and see how the unemployment saga continues.

This bodes well for entrepreneurs on the continent, where starting and maintaining a business is still costlier than in any other region of the world. Globally, 125 economies implemented 245 reforms making it easier to do business in 2010/11, 13% more than in the previous year.

According to the report, in low- and lower-middle-income economies a greater share of these changes were aimed at strengthening courts, insolvency regimes and investor protections than in earlier years. The increase in the pace of regulatory reform is critical for small and medium-size businesses, which are the main job creators in many parts of the world.

This is because negative comments about an employer are seen as bringing the employer’s name into disrepute, gross insolence or insubordination and these comments often lead to a breakdown in the trust relationship between employer and employee.

Filters off

These days we have technology at our fingertips. Smartphones mean that people have access to the internet wherever they are and the likes of Facebook and Twitter make sharing personal news with friends as simple as pressing a button. On the whole, comments and status updates are relatively innocuous; however, a problem arises when people grow so accustomed to sharing their every feeling with their online friends that they forget to filter what they are publishing.

Unless a Facebook user specifically enables the setting which restricts access to friends alone, the contents of his or her Facebook page are within the public domain and any internet user has the ability to access the page. However, even if access is restricted to the user’s friends only, the employee may still not safely be able to make derogatory comments. This is because of the possibility of the user and employer having mutual friends or the user being friends with a fellow employee. Either of these friends may be inclined to bring the comments made by the employee to the employer’s attention.

The famous F-word

In a recent matter an employee of Gold Reef City Casino was dismissed for posting derogatory comments, and the dismissal was upheld by the CCMA. In this case the employee had posted on his Facebook page that he had been fired by his employer for being gay, which the employee knew was not the truth.

The employee then followed up with a comment which read “F*** you all” and thereafter clarified that the comment was not directed at his friends but rather at “GRCC”. The commissioner found that it was clear that “GRCC” referred to his employer, who was easily identifiable and that the employee had intended to bring his employer’s name into disrepute.

Widely distributed

Interestingly, in this matter, unlike some other CCMA awards, the question of whether or not the employee had activated privacy settings was not discussed. The commissioner found that because the employee had 700 friends and the offending comments were posted for all of them to see, this publication was sufficiently widely distributed so as to have serious consequences and result in bringing the employer’s name into disrepute.

In light of this and considering the duty of good faith which is owed by employees to their employer, it is advisable that Facebook users vent their work-related frustrations on an appropriate platform and refrain from splashing these frustrations across the pages of Facebook.

* By Candice McGregor ,a Professional Assistant in the Employment Law Department at Garlicke & Bousfield Inc.

Think about it, amongst your friends and colleagues I bet that you know some pretty amazing people. Not people who are amazing because they’re famous or because of what they earn but simply because of who they are. I know I am lucky enough to know plenty of people like this and I’ve realised that it’s not enough to sit back and smile congratulations to myself  for knowing them, it’s time to let them inspire not only me but others too.

Jobs galore

A work colleague of mine that I am fortunate enough to call my friend as well, got hold of me yesterday to tell me she has been short-listed in the Y-AGE Youth and Graduate Entrepreneurship Development programme. The programme is a public-private partnership jointly created by SACORD, ORESEGO Holdings and Hope Africa and aims to encourage young entrepreneurs by providing skills development, training and mentorship.

It was launched last year October with the purpose of reigniting the dying hope of South Africa’s youth and channel them towards entrepreneurship. Oresego Holdings CEO, JJ Tabane, had this to say about the programme: “Due to high unemployment and the need to trigger small and medium enterprise opportunities, we set ourselves targets to recruit young people with business ideas and energy, equip them with the relevant skills and provide the much needed mentorship and funding for their initiatives.”

What is so great about this whole idea is that there isn’t just one winner at the end of it all. Candidates are selected on the basis of their idea, pay a R500 admin fee to make ensure they commit to the programme, from there, classes will commence and phase one of Y-AGE will be in full swing. The successful candidates, all of them, once trained, funded and mentored, are then expected to build sustainable businesses that will create employment for three to five people each. With the growth of each business, the goal of creating one million jobs will be realised.

 Am I the only one impressed by this?

Yesterday’s DA march may not have been hailed an outright success but it leaves me hopeful for our country. Not because there are things to march against but because people are starting to think and to form opinions based on the outcomes of their thoughts. They are no longer just accepting of the government and its failings.

Seomanele Mashishi, Executive Chairman of SACORD, was also present at the launch last October and had this to say, “with the Y-AGE programme, we want to develop our youth into people who think on their own instead of looking to corrupt political officials to give them tenders. We were pleased by the overwhelming response to the call to register for this support by young entrepreneurs and those who aspire to own their businesses. To date, we have had over 20 000 enquiries and over 6 000 have gone through the application process.”

And my friend is one of them! I am so proud of her and wish her the best of luck. For my part, I promise to buy Proudly South African merchandise where I can because the success of our entrepreneurs relies on the support of the country.

I hate this cliché but it’s so true, the future really is in our hands. So what are you going to do about it?

One of the keys to a successful retirement is ensuring that you have a clear plan about how your life will be structured once you’ve stopped working. Many people suffer from post-retirement depression because they have nothing to do with their time. I have spent more than 15 years advising retirees on their financial affairs and my happiest clients are those who had a plan for their retired life.

Killing time

While your financial affairs are an important part of the plan, other considerations are equally important, especially what you will be doing with your time on a daily basis. Many happily retired people started working part-time or volunteering for charities.

Financial wellbeing at retirement does not mean that you will be happy in retirement. Many wealthy retirees (especially retired executives) are desperately unhappy with their lives. They spent so much time on their jobs that they have no outside interests and therefore nothing to occupy their time once they stop working.

People with limited funds can have a wonderful retirement, I know one lady who worked as a personal assistant to a company executive in Johannesburg. After retirement she moved to a small house in the Southern Cape region where she rents out a small flat on her property to holidaymakers to supplement her pension while earning money from painting. Never having painted before, she started art classes with her neighbour as a pastime, but within 12 months she had sold her first piece at a gallery.

Devotion

I also know a retired human resources executive who started executive coaching after he retired. He found the work to be very fulfilling and challenging despite the fact that it was not a massive moneyspinner for him.

If you’re still working, you should try to plan for your retired life with a specific focus on how you’ll spend your time. You can’t spend your days playing golf, bowls or bridge – these are hobbies that may form part of your life but you can’t devote three or four days a week on them.

Many married couples really struggle in the initial phase of retirement. Very often, one person retires before the other and this causes real problems. The retired person is now constrained by the partner’s work schedule, so holidays and spontaneous long weekends are not possible. This can cause friction in the relationship, which can be pre-empted by honest discussions in the months and years prior to retirement.

A two-way street

You should not assume that your partner has the same idea about retirement as you do – you have to discuss it. If possible, try to ensure that both of you retire at similar times. Where only one person has worked, the situation can be even worse at retirement. The person who has been at home has a routine and life that is independent of their partner, and when that partner suddenly spends every day at home it can be disruptive to both people.

You can never be be too young to start your retirement planning; many people start their planning by their late thirties (myself included) so that their way forward is clear. From personal experience, I can tell you that this type of planning is very fulfilling and makes my working life more purposeful.

*Warren Ingram is a certified financial planner and executive director of Galileo Capital.