TRANSFORMATION
AYABONGA CAWE: Asset management sector alienated from majority of people
Economists are often at pains to explain to the ordinary person in the street the "transmission mechanism" that makes market capitalisation losses on the JSE something they "should care about", something that affects them adversely.
Remember when the Mining Charter was gazetted and mining stocks were "gutted" by R50bn?
Or even the famed cabinet reshuffle before that, which led to a sovereign ratings downgrade? On the other end of the spectrum, some argue that black people, Africans in particular, have been living in junk their entire lives and that downgrades would do little to change that. The message has been: be wary of the downside of economic policy decisions as it will get all of us in a fix, as if there is a shared interest in the upside.Nuances aside, it is difficult to dispute the argument that life can hardly get much worse than it already is in places such as Imizamo Yethu and Alexandra, irrespective of how the local bourse and its indices perform. The reactions to adverse movements in capital markets would be a common problem if all of us had a stake in the markets worth defending. Put simply, many people have little to lose, so even the threat of a significant collapse in value is only understood from the perspective of foregone jobs rather than a loss of any asset values. This speaks...
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