Smart investors are buying pregnant cattle.A recent article by CNN “Cash cows: Why investors are buying pregnant cattle” made me think.
The article is about creating new wealth, about “crowd farms”, about cattle in South Africa for online investors, where the farm is the company, the cows are the stock and the babies are the dividends.
The CNN story was part of a special focus on South Africa and how it is shaping the future and paving the way for the rest of the continent. “For $1 000 you can be the proud owner of a pregnant cow in South Africa and track her through a mobile app as she grazes, grows and gives birth. Once your calf reaches seven months of age, it is sold to a feedlot or slaughterhouse and the return for the beef is divided among the investors.”
The reason for the editor’s column “cows are the new smart investment” is two-fold. Let me share some highlights of the previous week with you.
Business Report (BR) successfully hosted Finance Minister Malusi Gigaba last Thursday, the morning after he delivered the Medium-Term Budget Speech (MTBS) at BR Ignite.
Gigaba and his deputy, Sfiso Buthelezi, were impressive. Gigaba’s honest approach about the economic challenges South Africa faces impressed our guests.
In the Q&A session after Gigaba spoke about the mini budget, Ambassador Harold Doley - the first African American to own (and still own) a seat on the New York Stock Exchange, Doley Securities - stood up and made an announcement. Lead investors, including himself, committed $1billion to be invested in South Africa and Africa over the next few years.
Guests were shocked. The loud applause followed after a few seconds of silence. What a vote of confidence in South Africa and a thumbs up for Gigaba.
The following day, I was called to attend a meeting with Independent’s chairman Dr Iqbal Survé to deliver updated stats on BR’s performance such as growth including readers’ feedback.
Dr Survé values readers’ comments. None of these were discussed during our meeting. We spoke about the future of Africa, Independent’s vision for Africa, investing in innovative technologies and “alternative investments”.
Doc told me a funny story. He and his son was invited for lunch in the UK by a super-rich family some time ago. His son, not used to all the wealth around him, wanted “to break the ice around the serious investors table” and said “I want 10 Rolls- Royce’s, I’ll exchange with 100 cows”. The super-rich laughed. I also laughed when Doc told the story on Friday. Until I got back at the office and did some research.
The cow-car exchange might be not so far-fetched, young Survé! The reality is that, in three decades, the 100 cows and their offspring will be more valuable than the 10 Rolls Royce’s.
Prioritisation or more?
Will state-owned enterprises (SOE) boards and managers declare personal interest(s) publicly? Should SOE’s be privatised, or not?
The answer might be found in those SOE’s that are currently partially privatised, like Telkom, where the board members and chairman are acknowledged as private sector appointments. These appointments seem to be fairly successful. Then there is the Post Office with Mark Barnes as chief executive, an investment banker and in some circles known for his ability to turn loss- making entities around.
But the Post Office needs more money than ever before. The shocking reality is that BR received information from various sources this weekend that some Telkom board members allegedly “face a conflict of interest with suppliers and that a prominent board member is linked to a Chinese multinational”.
Another source revealed that the Post Office allegedly is using government’s money to partner with friends and companies, linked to the chief executive. Barnes replied yesterday: “What a load of rubbish! The capital injection into Sapo is to settle bank debt.” The question: Are these partial privatisation attempts abused by board members and chief executives to feather their own nests?
I urge all private sector board members and managers of SOE’s to declare their interests publicly to prevent another Gupta saga.