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Black hold on JSE slips as Afrikaners strengthen
Empowerment under pressure while hard lessons are digested, writes JANETTE BENNETTBLACK control of market capitalisation on the JSE plummeted last year, casting a cloud over South Africa's formal empowerment process.
The millennium edition of McGregor's Who Owns Whom, to be released this week, shows black control slid to 6.8% at the end of last year, close to the 6.3% it reached in 1996, from zero in 1995. It was at its highest in 1997 at 9.3%, dipping to 8.9% in 1998.
Even more dramatic, Afrikaner control is on a steep climb - climbing to 35% from 32% in 1998 and 24% in 1996. English control dived to 54% from 63% in 1996.
Publisher Robin McGregor, who has tracked control of the JSE for the past 20 years, says Afrikaners appear to be filling the gap left by "droves" of corporate and individual English-speakers quitting SA.
McGregor says some fall-off in black control can be traced to "the JCI purchase from Anglo at top dollar, some questionable governance and the inevitable cost of a steep learning curve".
Analysts attribute the fall largely to the market devaluing empowerment companies as a whole after the emerging markets crisis and the highlypublicised Mzi Khumalo/JCI debacle and troubles in New African Investment Ltd.
Kagiso Media chairman Eric Molobi takes a pragmatic view: "Yes, the decline in the size of black economic empowerment companies on the JSE is a sad thing. But it's also a wake-up call. It says we need to reassess."
Nail director Dikgang Moseneke believes the fall is "a function of a rethink, not indicative of something wrong". Nail and other "first generation empowerment companies" went to market amid huge expectations, "bought into big companies and paid the price for that".
The lessons of the past year, he says, left many new black entrepreneurs with a deeper understanding that it is important to start at the bottom, grow, and go to the markets when the business is ready to add genuine value.
The picture looks better on an operational level. Black men held 332 directorships (189 in 1998). Most are held by Wiseman Nkuhlu (12), followed by Don Ncube and Molobi. White men held 5 111 directorships, down from 5 426, with most held by Leslie Boyd (19), Mike King (17) and Hymie Levin (17).
Women made strides off a tiny base. Black women held 53 directorships (10 in 1998) and white women held 94 (39 in 1998).
Irene Charnley held eight and Elizabeth Bradley seven.
Controversially, McGregor prescribes a "black broederbond" to take empowerment forward, with a bottom-up strategy and creation of an environment to "militate aggressively" for small and medium businesses.
Molobi says it's crucial that the issue be addressed. "It's my view that unless and until black economic empowerment companies have their story debated and planned, they will fall by the wayside."
McGregor attributes a great deal of the rise of Afrikaans-speakers to the work of the Broederbond, which he says "single-mindedly planned the future of the Afrikaner".
McGregor says although Anglo American (22.3%), Sanlam (12.5%), Old Mutual (10.6%), Rembrandt (10.4%) and Liberty Life/Standard (7.1%) control a "persistently high" chunk of market cap, it is at 61.1% from 86.3% in 1990, "courtesy of entrepreneurs" like GT Ferreira, Laurie Dippenaar, Christo Wiese, Jeremy Ord and Stephen Koseff.
Anglo control - 60.1% in 1987, and 44% in 1990 with 65 listed companies - is down to 22%, with 16 listings, due to divestment, unbundling, and movement of the gold index.
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