Try a little honey, Rob Davies. Works better than buckets of anti-business bile.

I try to wear the world like a loose cloak. That's the only way to make sense of it. But the garments have been tightening. Because it's my job to track and analyse these things, every day there's more evidence of how the unintended consequences of poor political decisions are bleeding the country. Like today, just as SA slumped another three places to its worst ever rating in the WEF's World Competitiveness Report, Trade & Industry Minister Rob Davies laid down his version of reality: finger wagging at two of the heaviest investors in industrial SA – ArcelorMittal and Sasol. Hey Rob, guess where their boards will vote to invest their next few hundred million? It made for an interesting discussion with Izan de Bruin. – AH 

ALEC HOGG: Let's get a more in-depth view now of how the market's trading. Izan de Bruin is Chief Executive of Xenium Financial Managers. He's with us in the studio. Discovery is the big corporate news of the day – 25 percent. They keep it going, don't they?

IZAN DE BRUIN: Yes, those results are really good. I think they have something like 56 percent on profit after tax. Those are real, good results. That's why the markets still like the share and it has to move.

ALEC HOGG: Are you a Discovery bull? Have you been riding that wave?

IZAN DE BRUIN: I have been with Discovery. It's one of those that you're supposed to have in your longer-term portfolio. It's a nice, conservative share. They make good profits and the continue doing that. Their futures are good as well because they have things that they're doing offshore, which shows quite positive growth.

ALEC HOGG: Were you happy with what you saw, from the U.K.?

IZAN DE BRUIN: Yes, and also what they do in the States there – I also like that – and what they're looking at doing in China or the Eastern sector.

ALEC HOGG: I wonder how much Adrian Gore is travelling nowadays. We'll talk to him about that a little later in the program. Not such good news is… Again, it's almost like a sledgehammer that's being used by the central/command/control members of the Cabinet, with Rob Davies coming out and wagging his finger at ArcelorMittal and at Sasol, who are two integral parts of this economy, saying 'you have to cut your prices'. That sounds fine in a Utopian world, but in a market economy…

IZAN DE BRUIN: For me, that's a bit of a difficult one because we do have import parity and he says we should go away from import parity. The problem with that is… Are you simply supposed to make some losses? The indication is that they should drop their prices by ten percent or so, otherwise they're going to get Competition Commission enquiries. For a market believer, that's a bit difficult and that shouldn't be the case. He specifically mentioned the platinum sector as well.

ALEC HOGG: But where does this guy come from? He's a Minister in Government, but he's making laws, rules, and assertions and he has no idea of the unintended consequences. Has this man found a new way to run the world?

IZAN DE BRUIN: I'm not sure if it's a new way specifically, Alec. It's not a way that I stand for…I don't think it's the right thing to do. I think we should be in a free market. We are a free market and we should continue doing it that way because that is part of our competitiveness in the long term. It can be argued sometimes that if you want to get something going, such as the manufacturing sector that this is the assistance he's trying to put in there to help those manufacturers.

ALEC HOGG: But where do you draw the line?

IZAN DE BRUIN: Well, that's the problem because that means we should do it with other sectors and other commodities as well. The longer-term outcome of that is not necessarily good.

ALEC HOGG: Well, we know Sasol are already the biggest foreign investor in the United States. This kind of activity is just… If I'm in Sasol, it's a very simple response: 'well, fine. Instead of putting our next plant in South Africa, I might just go to Nigeria or indeed, some other part of the world, which is friendlier'.

IZAN DE BRUIN: Yes. He did hint at something interesting maybe, at the end and that is to say 'if they were to, they might get something back for it', but that is still a bit of an open question.

ALEC HOGG: Unintended consequences of these Draconian-type approaches. I don't know if these guys actually think things through. We have an economy that isn't working. Now, let's go and fiddle some more to make it even worse. It's crazy. Moving away from that, a company that has moved offshore – aggressively – is Steinhoff, and probably (rationally), the share price though, did react negatively in the last couple of days.

IZAN DE BRUIN: Yes, the share price has been negative for a little while now. I think it's slightly on the back of what's happening in South Africa. For the last month or so, the European markets have been slightly subdued. There's been a bit of downside and bit of sideways, but I expect many of those to go back up, including our local consumer stocks such as Shoprite. They've been knocked quite badly and I think a pickup is in the offing.

ALEC HOGG: Telkom continues to grow stronger. It seems as though Jabu Mabuza's heavy hand at the AGM last week didn't really worry investors.

IZAN DE BRUIN: Yes. For me, on a very broad basis is that I think they've done a lot to downscale and get their expenses under control. About a year or so ago, I felt that it was just running away and it wasn't controlled. I think that if that can be controlled, they do other things, and they start ventures with other telecommunications companies, for example cell phones, that bodes much better for them for the future.

ALEC HOGG: Cashbuild had a good day yesterday on its results and it's a bit stronger again this morning.

IZAN DE BRUIN: Yes, about six percent up on their earnings yesterday. Their story is quite interesting in that they say they're going aggressively to open mini Cashbuilds. They say there are about 2000-odd malls and they're going to try to get into many of them – they're only in a few of them at this stage – so they want to open little hardware shops all over. The difficulty is going to be for that independent guy who has his little shop somewhere. He's going to be pushed out eventually.

ALEC HOGG: And Shoprite: a good improvement in the share price – kind of lifting its head a bit.

IZAN DE BRUIN: Yes, but as I said they knocked that one quite silly from 160/170 about a month-and-a-half ago all the way back down (I think it was the low 130's or something like that) and it should start lifting back up now.

ALEC HOGG: Another example of the capital flight from South Africa. I know that Whitey Basson would argue aggressively, that that's not the case.  Shoprite, like many other South African companies, is now investing outside of the country. You ask 'why'. Well, we'll find out more from the global competitiveness report results, where this country has now gotten its lowest ever position, of 56. It dropped three places in the past year. That's a drop of about eight percent on the rating where it was last year, so we continue to go down and we continue to make some decisions, for which the unintended consequences are quite obvious – it appears, to everyone outside of Government. Well, that was Izan de Bruin, Chief Executive of Xenium Financial Managers.