|From: Sam Citron||9/11/2008 4:33:16 PM|
|Taiwan to Spend NT$181 Billion on Economy, Stocks (Update3)|
By Janet Ong
Sept. 11 (Bloomberg) -- Taiwan announced a NT$180.9 billion ($5.6 billion) package of spending and tax cuts that investors said were inadequate to bolster economic growth and revive the stock market after a 26 percent slump this year.
The benchmark Taiex index fell 3.3 percent today, close to a three-year low, after Premier Liu Chao-shiuan said the government will cut the tax on stock transactions in half to 0.15 percent and provide a NT$13.5 billion subsidy to low-income families.
Taiwan's economy grew at the slowest pace in more than a year last quarter after slower demand for its electronics from China and the U.S. cut export demand. The expansion may moderate further after export orders in July grew at the slowest pace in five years and inflation close to a 14-year high discourages consumers from spending.
The measures ``will not succeed since they are not altering corporate or economic fundamentals in a meaningful way,'' said Howard Wang, who overseas $10 billion at JF Asset Management Ltd. in Hong Kong.
Declines in Taiwan's benchmark Taiex index today were led by Taiwan Semiconductor Manufacturing Co., the world's largest custom-chipmaker, which fell 2.6 percent. The 35-member Financials and Insurance sub-index slid 3.3 percent. Three days ago, it marked its biggest advance since 1994, when investors said they expected government action to stem declines.
`Don't See Bottom'
``As long as overseas demand for Taiwan's electronics goods isn't picking up and foreign investors aren't buying local tech stocks, I don't see the bottom of the stock market,'' said Eric Yao, who helps manage $152 million funds at Truswell Securities Investment Trust Co. in Taipei.
The benchmark index has lost more than a quarter of its value this year and is headed for its first annual decline in six years. Hynix Semiconductor Inc., world's second-largest computer memory chipmaker, has lost 21 percent of its value this year.
The island's currency fell as much as 0.6 percent to NT$32.054 against the U.S. dollar, the weakest since Feb. 12, according to Taipei Forex Inc. It has fallen 2.7 percent in the past month.
The income subsidies will be implemented in October and are aimed at helping 450,000 low-income families cope with higher energy prices, the government said. Taiwan is also offering a five-year tax waiver to manufacturers and related technology service providers for new investments.
Taiwan's economy grew 4.32 percent in the second quarter, the weakest expansion in more than a year. Export orders in July grew at the slowest pace in five years as Chinese demand faltered. Inflation rose 5.78 percent in August, easing from an almost 14-year high.
The government expects exports to rise 14 percent this year, up from a previous forecast of 11.73 percent, according to Chen Tain-jy, the island's top economic planner. Shipments in the second half of the year may grow by more than 10 percent, up from a previous estimate of 6.29 percent.
Taiwan wants to boost exports to regions including the Middle East, Brazil, Russia and China, Chen said.
The government is also considering plans to cut inheritance tax and gift tax, as well as corporate income tax and personal income tax rates, Finance Minister Lee Sush-Der said today. He declined to give details.
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|From: lukematt||9/13/2008 9:04:04 AM|
|Breweries and Soft Drink Bottlers Brno a.s.|
Pivovary a sodovkarny Brno (literally “Breweries and soft drink bottlers Brno”) produced such excellent beverages as Kofola (the Czech national soft drink).
Kofola was developed in the laboratories of the Czech pharmaceutical company Galena during the 1960s (i.e. Communism) when researchers were looking for ways to use excess caffeine from coffee.
Galena licensed the formula for Kofola to Pivovary a sodovkarny Brno.
During privatization, I purchased a mere 53 shares of Pivovary a sodovkarny Brno for approximately 120 Czech crowns per share (about $4 per share at the time).
On March 21, 2002, Pivovary a sodovkarny Brno was taken off the market.
As usual with all delisted companies in the Czech Republic, at this point, “Big Money” grabs the small shareholders by the ankles, turns them upside-down, and starts shaking.
On September 6, 2005, we were notified that Pivovary a sodovkarny Brno’s majority owner was removing the company’s shares from the Czech government’s central clearing house, Stredisko Cennych Papiru (SCP).
Now, the fun begins (sarcasm!).
We had to find out when and where the company would issue certificates. At a minimum, we needed to telephone to the company. Sometimes, a company will give us the exact information that we need (dates, times, address) over the telephone. However, if the company is managed by curak-heads (sounds like “churak”—see, you learned a new Czech word :-)), they will say something like, “We’ll publish a notice in the newspaper Pravo.” In that case, we must check every page of every issue of Pravo until the notice appears.
Without fail, the certificates are issued at the convenience of the company. For example, a company might say, “We will issue certificates between July 1 and July 15, only on Mondays and Wednesdays, only between 13:30 and 16:30.”
Even worse, shareholders must travel across the country to the location where the certificates will be issued.
What happens if a shareholder doesn’t claim the certificates during the allotted period? The company holds an auction of all unclaimed certificates. I tried to attend one of those auctions, but they wouldn’t let me in because I am not a licensed stockbroker. Oh, that’s cute.
Here’s a photo from an auction :-) :
Can you imagine the results of such an auction?
“Bids start at 200 Czech crowns per share”
“The man in the shades bids 190”
“40. Going once. Going twice. SOLD!”
The proceeds from the auction are mailed to the shareholders who did not claim their certificates.
We got our certificates. We needed to travel two hours in one direction to the town of Moravske Budejovice where some little financial company, responsible for distributing the Pivovary a sodovkarny Brno certificates, has its office.
As time passed, Pivovary a sodovkarny Brno died to all appearances. “Big Money” told the pharmaceutical company Galena to kill the license agreement with Pivovary a sodovkarny Brno for Kofola’s formula. Then, “Big Money” started a new company named “Kofola a.s.” that still produces Kofola today . . . and, of course, all profits from the Czech national soft drink go to “Big Money”.
Pivovary a sodovkarny Brno’s factory stood empty for a long time.
In 2008, we were notified that we must exchange our certificates. Through a series of transactions that would make your head spin, Pivovary a sodovkarny Brno had been acquired by a company named “Drinks Union a.s.”.
My wife travelled two hours in one direction yet again to the town of Moravske Budejovice. However, this time, she returned empty handed.
Why? Our mere 53 shares of Pivovary a sodovkarny Brno had metamorphosed into 6,519 shares of Drinks Union. My wife had traveled by bus, and this large number of full-size certificates was too much for her to carry.
One week later, my wife and I travelled a third time to Moravske Budejovice. We filled two large backpacks with our Drinks Union certificates and headed to the separate storage place where we keep certificates from Czech companies. (We’ve gone through this damn share-chasing routine for approximately half of the companies in our Czech portfolio.)
The story is still not finished. (Don’t blame me! Blame the jungle.)
A couple of weeks after we exchanged the certificates, a representative from the Chairman of the Board for the company Drinks Union showed up unannounced at our front door, offering to buy our Pivovary a sodovkarny Brno shares. We informed him that we’d already obtained our Drinks Union certificates. He didn’t know what to do with that answer, so he left.
The next day, the Chairman himself telephoned to our home; he offered 24 Czech crowns per Drinks Union share. We politely told him, “Are you friggin’ crazy?” :-)
I know that Drinks Union a.s. is a great company. See for yourself:
Heineken N.V. thinks so, too. Three days after we received the telephone call from the Chairman of Drinks Union, Heineken announced that they were acquiring Drinks Union. The most current information that I have—Heineken N.V. will pay 159 Czech crowns per share.
Sometimes, the jungle looks more like the Garden of Eden.
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|From: Sam Citron||9/16/2008 11:10:10 AM|
|Ukraine’s Ruling Coalition Collapses|
By THE ASSOCIATED PRESS
Filed at 6:40 a.m. ET
KIEV, Ukraine (AP) -- Ukraine's pro-Western coalition collapsed Tuesday, paving the way for complicated coalition talks or yet another early parliamentary election.
The nine-month-old alliance composed of parties loyal to Ukrainian President Viktor Yushchenko and his 2004 Orange Revolution partner, Prime Minister Yulia Tymoshenko, fell apart following months of infighting between the two leaders. They have become fierce rivals ahead of a presidential election scheduled for 2010.
It is the latest setback in the country's four-year-old embrace of democracy, amid growing tensions with Russia following its war with Georgia last month. Ukrainian politicians are split between those condemning the Kremlin and determined to push for membership in NATO, and those weary of antagonizing their giant neighbor.
''I officially announce the termination of the democratic coalition in the Verkhovna Rada,'' parliament speaker Arseniy Yatsenyuk told lawmakers, referring to the Ukrainian legislature. ''It is yet another democratic challenge, but I hope that together we will overcome this challenge.''
The parliament now has 30 days to form a new coalition; if it fails, a new election will be called. That would be the third parliamentary vote in as many years and another blow to hopes for quick reforms in Ukraine and its integration with the West, which both leaders campaigned for.
The two leaders have engaged in a political tug-of-war since Tymoshenko regained the premiership in December, accusing each other of corruption and incompetence and blocking each other's policies.
The final straw came when Yushchenko accused Tymoshenko of acting in the Kremlin's interests by failing to condemn Russia's war with Georgia. Tymoshenko fired back that Yushchenko's overwhelming support of Georgia was dragging Ukraine into the conflict.
Tymoshenko then teamed up with the Russia-friendly opposition to pass a law that trims presidential powers and boosts her own. Yushchenko called that a coup attempt, and his party pulled out of the coalition.
The infighting dealt a devastating blow to Yushchenko's popularity and that of his party.
According to a poll conducted this month by the Kiev International Sociology Institute, should an election be held, Tymoshenko's party would get 24 percent, the Russia-friendly Party of Regions would garner 23 percent and Yushchenko's bloc less than 4 percent.
The poll comprised 2,036 respondents across the country and had a margin of error of plus or minus 3.3 percentage points.
Some analysts predict that if a new coalition can be formed to avoid elections, it may involve the Party of Regions, making the new government more friendly toward the Kremlin.
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|From: Sam Citron||9/17/2008 12:39:30 PM|
|Russian Exchanges Halt Trading for Second Day; VTB Declines|
By William Mauldin
Sept. 17 (Bloomberg) -- Russia's Micex Stock Exchange and RTS Exchange halted trading for a second day as the Finance Ministry rushed to provide loans to the country's banking system and a Moscow brokerage sought to sell a stake to meet its financial commitments.
The Micex stopped trading indefinitely at 12:10 p.m. The settlement prices for stocks have been calculated based on the average price of trading in the last 30 minutes before the market's halt, while the index's closing level is yet to be calculated, spokesman Alexei Gerasyuk said by phone. Officials are now meeting to decide when trading may be resumed, he said.
The ruble-denominated Micex Index slid 3.1 percent to 853.93 in Moscow at the time trading was suspended, after earlier rising as much as 7.6 percent and dropping as much as 10 percent. The benchmark plunged 17 percent yesterday, the biggest drop since Bloomberg started tracking the gauge in May 2001.
The FTSE Russia IOB Index, a measure of Russian global depositary receipts trading in London, fell 3.7 percent. The dollar-denominated RTS Index today fell 6.4 percent to 1,058.84, when trading was halted.
The Finance Ministry today pledged to lend 1.13 trillion rubles ($44 billion) for more than three months to boost liquidity in the banking system. The Mosprime rate, a measure of overnight interbank lending rates in Russia, jumped to a record high of 11.1 percent today from 5.7 percent a month earlier.
``The bond market remains effectively closed and banks are reluctant to lend to one another,'' said Julian Rimmer, head of sales trading at UralSib Financial Corp. in London. ``The problems experienced by KIT Finance have heightened counterparty risk and reduced liquidity further.''
KIT Finance, a Russian brokerage, today said it is in talks with investors to sell a stake after failing to meet some financial obligations related to repurchase agreements.
``Every day Russia falls due to people not being able to meet margin calls,'' said Marina Akopian manager of the Hexam EMEA Absolute Return Fund in London. ``If people can stomach short-term volatility, they will be handsomely rewarded.''
Sberbank, Russia's biggest bank, dropped 5.81 rubles, or 17 percent, to 28.84 rubles. VTB, the second-biggest bank, sank 0.45 kopek, or 14 percent, to 2.72 kopeks, a record low. A kopek is one hundredth of a ruble.
Highland Gold Mining Ltd., the gold producer part-owned by billionaire Roman Abramovich, climbed 16.75 pence, or 62 percent, to 44 pence as of 4:33 p.m. in London, the biggest jump since May in London trading, after appointing a new chief executive officer.
The mining company selected Valery Oif, 42, from Abramovich's Millhouse Moscow holding company, as its chief.
``Millhouse is tightening its grip over Highland and, having replaced all top financial positions in the company, now decided to replace CEO with a person whom Abramovich personally trusts,'' said Mikhail Stiskin, a Moscow-based analyst with Troika Dialog who has a ``buy'' recommendation on the shares.
Shares of Russia's OAO RusHydro, OAO VolgaTelecom, and OAO Rostelecom are among those whose trading was suspended from the opening of the Micex Stock Exchange after they fell more than 10 percent yesterday.
RusHydro, the world's biggest publicly traded power producer, lost 25 percent to 0.75 rubles on the Micex yesterday. VolgaTelecom, the fixed-line phone network in Russia's Volga River region, plunged 28 percent to 37.06 rubles, while Rostelecom, the country's largest long-distance phone company, slid 14 percent to 233.36 rubles.
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|To: Sam Citron who wrote (193)||9/20/2008 12:08:21 AM|
|RE: "Have you participated in any other privatizations?"|
Thanks for your reply.
In answer to your question, I have been actively involved in the privatization of the Czech Republic for the last 17+ years.
Here's my sincere hope...
Readers of my messages should not think "Oh, these messages only apply to the Czech Republic. Who cares about that little country?"
I believe that economic forces in the Czech Republic are very easy to see and to understand because the Czech Republic is small.
Readers of my messages should extract the principles from my messages and apply them to other markets.
Here's a very timely example...
Agrobanka, the Czech Republic's fifth largest bank, was placed under "forced administration" by the government in 1996 due to "unconventional transactions". GE Capital Bank arrived and made a sweetheart deal with the Czech government. Specifically, the government sold Agrobanka's healthy assets to GE Capital Bank for a ridiculously low price. Agrobanka's shareholders--normal Czech citizens who were investing in equities for the first time since the fall of Communism--got stuck with Agrobanka's toxic assets.
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|From: Sam Citron||9/23/2008 12:15:04 PM|
|Russia Appears Set for Shakeout [WSJ]|
Kremlin Announces Some New Measures to Ease Liquidity
By ANDREW OSBORN
MOSCOW -- Days after the Kremlin announced a $120 billion rescue package that steadied Russian financial markets, signs emerged that the crisis is set to spur consolidation and a slew of bankruptcies. Monday, a billionaire businessman bought a 50% stake in one of Russia's largest investment banks in what he said was a sign of things to come.
Metals magnate Mikhail Prokhorov paid $500 million for new equity equal to a 50% stake in Renaissance Capital, the investment-banking business of Moscow-based Renaissance Group. Analysts said Mr. Prokhorov got a bargain, since Renaissance's value had been estimated to be at least several billion dollars before the crisis.
The deal came as the Kremlin announced fresh measures to ease liquidity, suggesting it believes the banking system remains fragile. State-controlled banks have begun to throw lifelines to smaller private rivals that have run into trouble, in some cases with a view to acquiring them. Leading retailers have also begun to change hands or strike emergency refinancing deals. Cellphone retailer OAO Euroset, one of the country's biggest, got a new owner Monday, while closely held electronics retailer, Eldorado, accepted a loan that its creditor says may be converted into an ownership stake.
"The strongest companies will survive, and others will cease to exist," predicted Mr. Prokhorov, regularly listed as one of Russia's wealthiest individuals. The crisis was a "peak time" for acquisitions, he added, singling out banks, real estate and construction firms as particularly vulnerable.
Mr. Prokhorov and Renaissance Group said they had been discussing the deal for "several months," but that market turmoil last week -- when Russian markets suffered their biggest drop in a decade -- had "accelerated" the process.
"The rules for investment banking have been totally rewritten," said Stephen Jennings, chief executive of Renaissance Group. He said he was keen to share risk, find fresh capital and gain strong local partners. Alexander Pertsovsky, CEO of the banking business, said the freshly refinanced entity would occupy a "unique niche," possibly boasting more capital than any other investment bank in the world because of global restructuring.
The banking sector had already begun to feel the pinch. Last week, the pension-fund arm of energy titan OAO Gazprom agreed to buy brokerage business KIT Finance after it failed to meet some of its obligations. Moody's Investor Services Monday cut debt ratings for Svyaz-Bank, saying the bank had defaulted on its obligations and that its capital had been "significantly damaged." It added that it understood the bank was in talks with "publicly undisclosed parties with regard to possible mechanisms for further support." A Svyaz-Bank representative declined to comment.
Renaissance's Mr. Jennings said the crisis was spurring "long overdue" consolidation. "Russia doesn't need 900 banks," he said in an interview. "It needs about 10 big banks."
Analysts said the crisis might also affect a fierce shareholder conflict at OAO Norilsk Nickel, where two wealthy businessmen are vying for control. The company's share price has fallen so low that it could be a great chance for either of the businessmen to snap up shares at bargain prices. "It could change things tactically," said Steven Dashevsky, head of equities at Unicredit Aton brokerage in Moscow.
Meanwhile, Russian stocks inched higher Monday after bouncing back Friday following a week of heavy losses. The ruble-denominated MICEX index finished 0.62% higher, while the dollar-denominated RTS index was up 1.05%.
Analysts said markets would likely start making solid gains though only when the situation in the U.S. became more stable. "Russia cannot detach itself from the global economy," Mr. Dashevsky said.
Last week, the government assembled a rescue package valued at $120 billion to shore up the banking system. Monday, it offered greater relief, suggesting that liquidity levels haven't been fully restored. The government extended a deadline for value-added-tax payments by three months to ease liquidity. Prime Minister Vladimir Putin ordered the Finance Ministry to consider raising the size of bank deposits covered by government guarantees.
Mr. Putin told a cabinet meeting that the Kremlin's anticrisis measures were working. "The market situation has stabilized," he said.
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|To: lukematt who wrote (196)||9/30/2008 2:40:15 PM|
|From: Sam Citron|
|Even better than privatization:|
A Mittal secret from the ‘rust buckets’ of Kazakhstan
Satish John & Vivek Kaul
Monday, April 21, 2008 04:00 IST
Prof Pankaj Ghemawat says it was not steel that got the richest Indian his first billions
MUMBAI: Know how Lakshmi Mittal made his first few billions? Of course through steel!
Coal from the ‘rust buckets’ of Kazakhstan is more like it, says Pankaj Ghemawat, one of the youngest-ever Harvard Business School professors.
Ghemawat, who is currently on leave from the ivy tower, and is working as a full-time professor at the IESE Business School, Barcelona, along, with some of his students, conducted some “forensic examination” of Mittal’s past acquisitions. They deconstructed annual reports till 2004.
“I was struck when I went through this exercise around a couple of years ago, as basically one-third of Mittal’s operating profits were coming from Kazakhstan,” he said.
He credits Mittal for using his imagination.
“Mittal’s strategy was to buy up old public sector steel mills across the world. These mills, which Mittal turned around, were derisively known as “rust buckets”.
Kazakhstan was no different. “What he basically bought was a Soviet era township, along with 70,000 employees. One of the pre-conditions of the deal was that Mittal couldn’t reduce employment by much as it was the Kazakh president’s pet project. Hence, it came along with huge political problems,” said Ghemawat.
And this is where Mittal was “very, very clever”. The steel mill in Kazakhstan, a huge country, has vast reserves of coal and the rail links to China were just across the road, as it were.
Mittal had known all along China’s massive need for the fuel. He sold huge quantities of coal across the border.
“In privatisation processes people generally focus on what’s the price per tonne of steel-making capacity. But people give the raw material rights and whatever else the buyer insists on, which is why you see the jockeying that you see in Orissa. And smart steel makers - not just Mittal, but also the likes of Posco —- understand this.”
Steelmakers across the globe, including the Tatas, are vying to set up operations in the backward states of Chhattisgarh, Orissa and Jharkhand, India’s richest regions in terms of iron ore and coal.
“But,” says Ghemawat, “to be fair to Mittal, he is just looking at multiple revenue sources and deserves the credit for being imaginative.”
“They may have been too creative in terms of having cultivated relationships with governments —- the Tony Blair letter to the Romanians on behalf of the Mittals is an example. I have seen protocols of some of the eastern European deals and they have been very creative at structuring the deals,” Ghemawat said.
“The other thing worth noting is that there were two Mittal-vested entities that were operating and he then sold one to the other and this is where he got his $2 billion of cash-out,” says the professor. “It is interesting to note that since then, the price he is willing to pay for a tonne of capacity has escalated significantly since he got his cash out of the business.”
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|From: Sam Citron||10/2/2008 11:46:50 PM|
|Life in Zimbabwe: Wait for Useless Money [NYT]|
By CELIA W. DUGGER
HARARE, Zimbabwe — Long before the rooster in their dirt yard crowed, Rose Moyo and her husband rolled out of bed. “It is time to get up,” intoned the robotic voice of her cellphone. Its glowing face displayed the time: 2:20 a.m.
They crept past their children sleeping on the floor of the one-room house — Cinderella, 9, and Chrissie, 10 — and took their daily moonlit stroll to the bank. The guard on the graveyard shift gave them a number. They were the 29th to arrive, all hoping for a chance to withdraw the maximum amount of Zimbabwean currency the government allowed last month — the equivalent of just a dollar or two.
Zimbabwe is in the grip of one of the great hyperinflations in world history. The people of this once proud capital have been plunged into a Darwinian struggle to get by. Many have been reduced to peddlers and paupers, hawkers and black-market hustlers, eating just a meal or two a day, their hollowed cheeks a testament to their hunger.
Like countless Zimbabweans, Mrs. Moyo has calculated the price of goods by the number of days she had to spend in line at the bank to withdraw cash to buy them: a day for a bar of soap; another for a bag of salt; and four for a sack of cornmeal.
The withdrawal limit rose on Monday, but with inflation surpassing what independent economists say is an almost unimaginable 40 million percent, she said the value of the new amount would quickly be a pittance, too.
“It’s survival of the fittest,” said Mrs. Moyo, 29, a hair braider who sells the greens she grows in her yard for a dime a bunch. “If you’re not fit, you will starve.”
Economists here and abroad say Zimbabwe’s economic collapse is gaining velocity, radiating instability into the heart of southern Africa. As the bankrupt government prints ever more money, inflation has gone wild, rising from 1,000 percent in 2006 to 12,000 percent in 2007 to a figure so high the government had to lop 10 zeros off the currency in August to keep the nation’s calculators from being overwhelmed. (Had it left the currency alone, $1 would now be worth about 10 trillion Zimbabwean dollars.)
In fact, Zimbabwe’s hyperinflation is probably among the five worst of all time, said Jeffrey D. Sachs, a Columbia University economics professor, along with Germany in the 1920s, Greece and Hungary in the 1940s and Yugoslavia in 1993.
Making matters worse, cash itself has become scarce. Business executives and diplomats say Zimbabwe’s central bank governor, Gideon Gono, desperate for foreign currency to stoke the governing party’s patronage machine, sends runners into the streets with suitcases of the nation’s currency to buy up American dollars and South African rand on the black market — drying up Zimbabwean dollars that would otherwise go to the banks.
Because of the cash shortage, the government strictly limits the amount people can withdraw. Even so, Zimbabweans say they often wait in vain for hours at banks that send their customers away empty-handed.
Mr. Gono, who blames Western sanctions for the nation’s troubles, did not respond to requests for an interview. But he was quoted in the state media this week as saying, “I am going to print and print and sign the money until sanctions are removed.”
Political Solution Needed
Economists say that the only thing that can halt Zimbabwe’s inflationary spiral is a political solution that takes control over the country’s economy out of the hands of Robert Mugabe, the 84-year-old president who still maintains a viselike hold on power after 28 years in office.
“This is the end of the endgame,” Professor Sachs said.
Mr. Mugabe, who lives in splendor here in a mansion hidden behind high walls, returned to Harare on Monday from the United Nations General Assembly meeting in New York. He and the opposition leader, Morgan Tsvangirai, signed a power-sharing agreement, but they are still deadlocked over the division of the ministries. So far, Mr. Mugabe has refused to give up control of the crucial Finance and Home Ministries.
Basic public services, already devastated by an exodus of professionals in recent years, are breaking down on an ever larger scale as tens of thousands of teachers, nurses, garbage collectors and janitors have simply stopped reporting to their jobs because their salaries, more worthless literally by the hour, no longer cover the cost of taking the bus to work.
“It’s scary and it’s pathetic,” said Tendai Chikowore, president of the Zimbabwe Teachers Association, the largest and least radical of the teacher unions. She said a teacher’s monthly pay was not even enough to buy two bottles of cooking oil. “This is a collapse of the system, and it’s not only for teachers,” she said. “At the hospitals, there are no nurses, no drugs.”
Those who continue to show up often make a little extra on the job. Teachers sell their students candy and cookies, for example, or accept payment from parents in cornmeal or cooking oil, said Raymond Majongwe, secretary general of the Progressive Teachers Union.
Zimbabweans have a legendary ability to make do despite extraordinary hardship, and the money sent home by millions of their compatriots who have fled abroad to escape political repression and economic deprivation continues to sustain many of them. But the deteriorating conditions are creating pressures for a renewed exodus, even as people employ all their entrepreneurial creativity to stay alive.
Among those thinking of leaving is Fortunate Nyabinde, whose salary of $3,600 Zimbabwean dollars a month (or $36 trillion before the government rejiggered the currency in August) does not even pay for four days of bus fare to her job at Parirenyatwa Hospital, one of Zimbabwe’s leading public institutions.
Yet, for now, she keeps going to work, wheeling a trolley of cornmeal porridge from ward to ward, mostly because she can eke out an extra 20 cents a day by selling basic necessities to patients that the hospital usually does not have in stock: toilet paper, toothpaste, soap.
“If they come to the hospital without anything, they will have to buy from us,” Ms. Nyabinde said.
Signs of a Calamity
Clues to the calamitous state of the country can be found even in recent articles tucked into Mr. Mugabe’s mouthpiece, The Herald, the only daily newspaper he has allowed to keep publishing.
The bodies of paupers in advanced states of decay were stacking up in the mortuary at Beitbridge District Hospital because not even government authorities were seeing to their burial.
Harare Central Hospital slashed admissions by almost half because so much of its cleaning staff could no longer afford to get to work.
Most of the capital, though lovely beneath its springtime canopy of lavender jacaranda blooms, was without water because the authorities had stopped paying the bills to transport the treatment chemicals. Garbage is piling up uncollected. Sixteen people have died in an outbreak of cholera in nearby Chitungwiza, spread by contaminated water and sewage.
Vigilantes in Kwekwe killed a man suspected of stealing two chickens, eggs and a bucket of corn.
And traditional chiefs complained about corrupt politicians and army officers who sold grain needed for the hungry to the politically connected instead.
Zimbabweans standing in bank lines across the capital offer their own stratagems for survival. At the Avondale shopping center, a strip mall with a cafe serving cappuccinos and a multiplex showing “Sex and the City,” more than 200 sweaty, grumpy people lined up one recent morning to withdraw whatever they could from the bank.
Mrs. Moyo, the early riser, had her usual sought-after, low number — 26 — while Mrs. Nyabinde, the hospital worker on the overnight shift, was far back at No. 148 because she had arrived late — about 5:15 a.m.
No. 132 was Stanford Mafumera, 35, a security guard who spends most of his time at his job or in line at the bank; he is so poor that he sleeps beneath the overhang at the mall rather than pay for bus fare home to his family. His clothes hung loose on his gaunt body, and his dusty shoes were coming apart.
“Since Monday, Tuesday, Wednesday, there was no cash here,” he said. “We started getting cash only yesterday.”
Most days, he said, he eats only a bag of corn nuts to conserve his monthly pay — worth $10 a week and a half ago, but only $5 now because of inflation.
Each day, he buys a pack of cigarettes and sells them one by one, making an extra 20 to 30 cents. But he was unable to afford the cost of taking his 5-year-old daughter to the doctor recently when she got diarrhea after drinking dirty water from an unprotected well.
Mr. Mafumera blamed the government’s land reform program for Zimbabwe’s woes. It chased away the white commercial farmers who had made the country a breadbasket, he said, as well as donors from Britain and other European countries and the United States who sustained Zimbabwe’s starving millions for years.
“A lot of people got farms, but they can’t produce anything and this is what is causing the poverty and hunger,” he said. “There’s no food.”
Chaotic Land Reform
Zimbabwe’s economic unraveling has, indeed, accelerated since the chaotic, often violent invasions of thousands of white-owned farms by Mr. Mugabe’s supporters began in 2000. The big farms now produce less than a tenth the corn — the main staple food crop here — of what they did in the 1990s, the United Nations Food and Agriculture Organization reported in June.
In the years since, the country has suffered extreme food scarcity, rampant inflation, a shrinking economy and collapsing public services. In Mrs. Nyabinde’s neighborhood, every spare spot of ground sprouts the greens people eat with cornmeal porridge, evidence of the scramble for food.
And in a country that used to have an education system that was the pride of the continent, the schools that Mrs. Nyabinde’s children — Chenai, 10, and Darlington, 6 — attend are now empty of teachers. So she sends them to Stella Muponda, a teacher who quit her public school job last year, for a couple of hours of instruction a day. The money Mrs. Nyabinde pays Mrs. Muponda for the children’s lessons is now worth only about 40 cents, enough for a single bread roll.
Mrs. Muponda, a widow with twin, 14-year-old boys, said she and her sons grew thinner, weaker and more sickly last year, unable to eat enough on her meager pay. When she no longer had the strength for the five-mile walk to and from school, she quit.
Gaunt and exhausted, she kept saying, “I only wish I could get a decent job.”
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|From: lukematt||10/4/2008 8:39:08 AM|
|ON THE MARKET: Komercni Banka|
Komercni Banka is currently traded on these markets:
Prague; U.S. Pink Sheets (symbol: [t]KMBNY[/t])
[Note: There are only 14 companies on the Prague Stock Exchange. Four of these companies also trade on the U.S. Pink Sheets. They are four of the strongest companies in the Czech Republic.]
• Komercni Banka is one of the three companies still listed on the Prague Stock Exchange that also originally appeared on the market in 1993-94.
• I don’t know its “numbers” because, as I wrote in the blog “Prague Stock Exchange—Roots”, I don’t invest in any of the currently listed Czech companies. However, I can give you non-financial tidbits.
• My general impression of Komercni Banka…it’s a typical stodgy, conservative, old-style bank. That’s a compliment. (It’s better than an imprudent manager of money such as IndyMac, etc.)
• My family does not have an account at Komercni Banka because the service charges are too high. Better deals exist at other banks. At the same time, “Komercni” means “Commerce/Commercial”, so maybe they’re not interested in individual accounts.
• This summer (2008), I needed to get some Japanese yen. I looked on a special Czech website that lists best exchange rates by banks. Komercni Banka was number 6 or 7 for yen. However, when I tried the first 5 or 6 banks, nobody handled Japanese yen (I don’t know why they were even listed on the website). Finally, I went to Komercni Banka. Although the Brno branch did not have yen “on hand”, they took my order, and in one business day, I had it. Excellent service.
• My brother-in-law was an upper-middle-level manager at Komercni Banka’s headquarters in Prague for many years. He never had any bad words about Komercni Banka (but, of course, he’s a sell-your-soul-to-the-company kind of guy :-) ).
• Does Komercni Banka have any skeletons in the closet? Of course.
o During privatization (mid 1990s), Komercni Banka’s largest shareholder was Bank of New York. Then, in July 2001, Komercni banka was suddenly sold by the Czech government to Societe Generale Group. You know—the January 2008, 4.9 billion Euro trading loss scandal Societe Generale Group.
o From the Prague Post (May 10, 2000).
“Former Komercni banka (KB) director general Richard Salzmann said May 7 that charges brought in connection with KB's loss-making deals with Austrian firm B.C.L. Trading and the Frantisek Chvalovsky financial group may involve all members of KB's former management and other KB employees. He said that while he hasn't yet been questioned about the matter, he believes that he, too, might be accused. KB launched a risky deal with B.C.L. Trading in 1996, when KB was managed by Salzmann. The loss of about 8 billion Kc ($195 million) that KB suffered in the deal was the biggest loss in the Czech Republic's history. Salzmann is now a senator with the Civic Democratic Party (ODS).”
From Radio Prague (December 6, 2005)
“Former Komercni Banka board of directors acquitted of fraud charges. A court has ruled that nine former members of the board of directors of the Komercni Banka bank are not guilty of fraud. They were accused of helping Austria's BCL Trading (owned by entrepreneur Barak Alon) defraud the bank of eight billion crowns (a little under 330 million US dollars). Komercni Banka is one of the Czech Republic's biggest banks.”
I have 17+ years of investment experience in the Czech Republic. Komercni Banka’s 8 billion Kc scandal and the subsequent acquittal of its accused directors clearly signal to me that Komercni Banka has links to organized crime. Of course, we could ask—do any financial institutions nowadays not have such links?
Would I recommend that somebody buy shares in Komercni Banka? Well, it’s not **my** type of investment. I really don’t see any growth potential. However, if the financials are good and the share price is low, I wouldn’t tell somebody, “Never buy Komercni Banka shares”.
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