BizNews Briefing – Featuring David Shapiro; Piet Le Roux; Neil Emerick and more.
In this episode of the BizNews Briefing host Alec Hogg has three live studio guests – and a host of inserts from other knowledgeable observers. Subjects covered in this hour of power range from Tesla, Elon Musk's politics and financial African oil and gas projects through to A GNU challenge over BEE in agriculture and good news for the SA economy from Ray Dalio and the Freedom Index.
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Shortened transcript of the Briefing:
Alec Hogg (00:09.994)
It's 7 o'clock in South Africa. I'm Alec Hogg, and here's your BizNews Briefing. Welcome back to South Africa, David Shapiro, to share some market insights. Dave, it's great to have you home.
David Shapiro (00:26.000)
Yes, it is! Especially with summer approaching after being in the colder US autumn. I've been catching up on everything happening here, particularly the elections and US issues.
Alec Hogg (00:56.000)
I have more election news as we check in with our Bloomberg partners.
Bloomberg (01:12.000)
The US is investigating leaked top-secret documents about Israeli military preparations for a potential strike on Iran. The reports detail expected aircraft and munitions, indicating the strike could happen without warning. Israeli PM Netanyahu held security meetings over the weekend following a Hezbollah drone incident near his home.
John J. Edwards (02:46.316)
This definitely strengthens Israel's resolve to respond firmly, sending a clear message to Iran and its proxies.
Bloomberg (03:21.000)
This week, the IMF and World Bank hold annual meetings, with comments expected from regional Fed presidents and a report on economic indicators. We'll see earnings reports from major companies, including AT&T and Boeing.
Charlie Pellett (04:02.000)
Earnings this week will include AT&T, Boeing, and Coca-Cola, amid questions about corporate profit outlooks.
Quincy Crosby (04:16.000)
The market is discerning and will react to any guidance that doesn't meet expectations.
Alec Hogg (04:31.000)
David, there's a lot of reporting coming up, and it's crucial for us in South Africa.
David Shapiro (04:42.000)
Absolutely. After talking to many people during my trip, the US economy still feels dynamic. It's essential to keep an eye on it as its growth sets a benchmark for others.
Alec Hogg (05:56.000)
Now onto Elon Musk, who's in the news for his potential impact on the US election.
Kasia Brasalian (06:32.000)
Musk gave a million-dollar check at a rally in Pennsylvania while campaigning for Trump, part of a giveaway for registered voters. Legal scholars warn this might violate election rules.
Alec Hogg (07:20.142)
Musk is certainly making waves.
David Shapiro (07:24.000)
He has business motives tied to his support for Trump, especially with tariffs favoring Tesla against Chinese competitors. Pennsylvania's a key swing state, crucial for the election.
Alec Hogg (08:34.000)
Musk knows the stakes. Cy Jacobs from 361 is betting against Tesla, which seems risky given Musk's popularity.
David Shapiro (09:44.094)
It's dangerous to short certain stocks. Many are exhausted by Trump after three elections. If Kamala runs, she might be viewed as a calmer alternative.
Alec Hogg (10:52.000)
The election is just weeks away. What about ASML? The market reacted poorly to its recent results.
David Shapiro (11:12.000)
I see it as a buying opportunity. ASML has a monopoly with its technology, and while demand is slowing, management believes it will pick up. It remains crucial in chip manufacturing.
Alec Hogg (13:07.000)
If you still believe in the long-term story, pullbacks like this can be opportunities.
David Shapiro (14:02.000)
You're right. Small and mid-caps in the US will benefit from lower interest rates. It's wise to invest through an index like the Russell 2000.
Alec Hogg (15:10.000)
What about South African small and medium caps?
David Shapiro (15:10.000)
I prefer focusing on well-managed smaller businesses. The market is recovering, and there are good opportunities if you cherry-pick wisely.
Alec Hogg (16:23.000)
David Shapiro, closing this segment of the program.
Alec Hogg (16:57:09):
Interesting insights ahead, starting with Piet Le Roux discussing BEE in agriculture. It was the lead story in Rapport yesterday, with John Steenhuisen urged to remove BEE legislation from the agricultural sector, a thriving area of the South African economy. But first, here's Neil de Beer.
Neil and my colleague Chris Steyn have a popular Sunday program where Neil shares his unfiltered views as the UIM president. Though his party didn't secure enough votes for parliament, his popularity through podcasts suggests he'll gain more support next time. Here's a snippet from their recent discussion relevant to Piet Le Roux, about Steenhuisen's new appointment of Big Daddy Liberty. Neil, isn't he still trying to dismiss the previous web celeb he appointed?
Neil de Beer (17:59:04):
It's a new era where bloggers are becoming political figures. They bring immense attraction to political parties, but it's a different arena. The DA has seen this before with social media personalities like Sihle Ngobese (Big Daddy Liberty), Denaldo Gouws, and Kaveh Naidoo.
Neil de Beer (19:18:69):
Four DA members known as social media figures are now in politics. Is this the new era? It's not working perfectly yet. Much of today's political battle is fought on platforms like TikTok, but does that equate to necessary experience? The jury's still out. Sihle is insightful, but we'll see how this evolves.
Alec Hogg (21:38.6):
We'll hear from Neil again at the end of the program. Now, let's turn to Piet le Roux, Chief Executive of Sakeliga. Piet, you were front-page news yesterday, urging the new Agriculture Minister, John Steenhuisen, to retract BEE plans for agricultural imports and exports. What's the issue?
Piet le Roux (21:58.1):
We're not angry, just firm. We informed John that the Agri-BEE regulations by DG Muketse Iramasodi are unacceptable. They predate his term, but he claims he was unaware of them. We find it unacceptable to impose BEE criteria on export and import quotas, affecting a significant minority of agricultural trade, including wine and produce.
Alec Hogg (23:58.6):
Why call them penalties? Isn't this incentivizing BEE participation?
Piet le Roux (24:12.4):
It's an abuse of international trade agreements designed to reduce trade barriers. The government is effectively penalizing non-BEE farmers with increased costs on exports.
Alec Hogg (26:23.3):
These regulations were announced recently, raising concerns about unity in government. Are you seeing a disconnect between ministers and their staff?
Piet le Roux (26:50.7):
Yes, John is aware of the issue and finds the regulations unacceptable. However, many bureaucrats remain unchanged despite ministerial shifts. It's unlikely the conduct of the state will improve significantly.
Piet le Roux (28:15.9):
Our letter to John was firm, urging him to address these regulations. Depending on his actions, we may either approve or escalate our response.
Alec Hogg (29:00.8):
Who holds the power here?
Piet le Roux (29:01.5):
It seems the DG has initiated these regulations. We're calling for their retraction. It will take time to see who truly holds power. These plans aim to make all government interactions with agriculture subject to BEE criteria, and we're demanding withdrawal of these plans as well.
Piet le Roux (31:23.0):
We must leverage the opportunity with a DA minister to challenge BEE's place in policy.
Alec Hogg (31:15.6):
Does this jeopardize the government of national unity?
Piet le Roux (31:58.5):
We must require lawful action from government regardless of political alliances. This isn't about anger; we seek clarity on policy direction.
Alec Hogg (32:12.29):
In other words, hope isn't a strategy.
Piet le Roux (31:58.5):
Exactly. Let's establish the facts.
Alec Hogg (32:12.29):
Piet le Roux is the Chief Executive of Sakeliga, a powerful voice for business.
Alec Hogg (39:35.17)
We now have nine countries in BRICS, including Iran, which is preparing for a possible Israeli strike. The world is a dangerous place. Neil Emmerich is with the Free Market Foundation. Neil, could you summarize the freedom index and South Africa's rating?
Neil Emerick (40:51.678)
Good morning. We're pleased to report that South Africa has improved in the rankings, moving from 85th to 81st. This places us in the top half of 165 countries, a significant improvement after several years.
Alec Hogg (41:51.678)
Who else is in the rankings for context?
Neil Emerick (41:25.678)
India is 84th, Brazil 85th, with Mauritius at 17th as Africa's most free country. Kenya is at 74th, Uganda at 76th, and Botswana at 80th. The top 10 includes Hong Kong, Singapore, and Switzerland, while Sudan, Zimbabwe, and Venezuela occupy the bottom spots.
Alec Hogg (43:01.678)
Why is being higher on the economic freedom index important for growth and job creation?
Neil Emerick (43:20.678)
Economic freedom correlates with better outcomes. For example, the top quartile of countries averages $53,000 annually, while the bottom quartile averages $7,000. Life expectancy is 16 years longer in free countries, with significantly better environmental health and lower corruption. Numerous studies show that greater economic freedom leads to improved outcomes.
Alec Hogg (45:10.914)
Let's consider a report from the Financial Times about Africa's oil and gas exploitation being hindered by funding issues due to international banking agendas. Isn't there an inherent hypocrisy here, given that wealthier countries have benefited from pollution in the past?
Neil Emerick (46:37.102)
It's a complex issue. The index examines laws restricting individual freedoms, while Europe's climate policies often involve political market pressures. Tariffs on carbon-produced goods hurt trade. Environmental issues can seem like luxury concerns for countries that have reached a certain income and education level; Africa has more pressing poverty issues.
Neil Emerick (48:03.01)
From a free-trade perspective, we have excellent resources in gas and oil that could be utilized.
Alec Hogg (48:15.75)
Would you hope that Donald Trump doesn't win the U.S. presidential election, given his stance on tariffs? Such tariffs would impact the Freedom Index.
Neil Emerick (48:34.01)
Tariffs would indeed affect America's freedom score. South Africa could eliminate its tariffs unilaterally to promote free trade. Trump's tariffs would ultimately burden American consumers, not the Chinese.
Alec Hogg (49:10.75)
Neil Emerick from the Free Market Foundation, thanks for sharing your insights on the Freedom Index and the good news about South Africa's ranking.
Alec Hogg (49:10.75)
We close off our last interview with good news from a fascinating discussion my colleague Bronwyn Nielsen had over the weekend with Michael Jordaan. Now, Michael Jordaan is well known as being the man at the helm when FNB was the most innovative bank in the world, and that's official. Subsequently, as CEO of FNB, he went into banking with a company called Bank Zero and has been very involved in a disruptor on the data side in South Africa called RAIN. RAIN is doing particularly well. But here's Michael on his view about South Africa into the future.
Michael Jordaan (50:35.01): I've become more positive about the next decade than the past. I think South Africa can grow at about 2.9% for the next decade, which is better than the last decade, though we still need 4-6% to significantly reduce unemployment.
Bronwyn Nielsen (51:03.01): What underpins that positivity, Michael?
Michael Jordaan (51:08.01): There's interesting analysis by Ray Dalio, who compared growth in the top 20 economies. South Africa is projected to grow at 2.9%, while the US and UK struggle at over 1%, and most of Europe at zero or negative growth. Emerging markets will outperform developed ones, and South Africa is in a good position.
Alec Hogg (52:11.12): Context is important—last decade, South Africa's GDP grew less than the population growth of 1.6%, making us poorer. With the government of national unity, challenges remain due to ineffective economic policies. Einstein's definition of insanity applies here, as outdated ideas continue to be used. We hope new ideas will emerge over time despite inevitable conflicts, such as the upcoming issues in the Department of Agriculture.
Alec Hogg (53:26.312): Piet le Roux of Afriforum noted the shifting geopolitical landscape with BRICS expanding to include Iran and possibly Saudi Arabia, along with Brazil, Russia, India, China, Egypt, and Ethiopia. It's a fascinating time for geopolitics and economics in South Africa.
Alec Hogg: This is the BizNews briefing. I'm Alec Hogg. It's been a pleasure to be with you for this hour of power. We'll close with a quip from Neil de Beer, from his chat with Chris Steyn.
Chris Steyn: Neil, let's quickly go to the defections and the high-profile departures from the Economic Freedom Fighters. Where did Commander-in-Chief Julius Malema lose the plot?
Neil de Beer: The day he was born.
Chris Steyn: Sorry. Sorry,
Alec Hogg (55:46.836):
Sorry as well. Well, that's Neil de Beer's view, and I can tell you that the whole of that conversation does give you his straight-shooting approach. I strongly recommend that you go and pick it up, as well as the other issues that you can find from the various business channels on YouTube and BizNews Radio.
And if you are hearing the BizNews briefing live for the first time, or a recording of this, you can join us every morning at 7 a.m. Just go to biznews.com; it's right across the front page. Click on the image there, and you'll be with us live. Until tomorrow, cheerio.
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