SA's black wealth accumulation crisis

[Nom Chompsky]

http://www.fin24.com/Economy/SAs-black-wealth-accumulation-crisis-20120429

Last October, the JSE released a study that showed that blacks owned 17% of the top-100 listed companies, which represent 85% of the bourse’s total market capitalisation.


This research indicates that just over half of JSE’s black wealth is held through third-party mandated investments like pension funds. The rest of the shares accounted for as black ownership on the exchange are owned by blacks directly.


Direct ownership by blacks on the JSE was acquired through black economic empowerment (BEE) deals, which were financed through debt.


But the debt-free portion of black JSE ownership is just 1.6%.


Since wealth is the total value of what is owned minus what is owed, the net worth of black direct ownership of the JSE is significantly less than the figure indicated in the JSE research document.


The JSE’s study implies that about 83% of the country’s listed shares are owned by white South Africans and foreign investors.


According to a research paper for the Gordon Institute of Business Science written by Andile Makhunga, the levels of BEE deal flow have declined drastically.


In an interview with City Press this week, Makhunga said “the era of mega BEE wealth transfers is gone for good”.


He said there were “two main problems with this model. The first is that whereas there is more than R200 billion worth of BEE deals done thus far, valuations of the wealth created by this model have been eroded by the economic crises.”


He said the second problem was that the model simply transferred wealth to a few individuals – while in the rest of the economy, black people’s incomes were declining significantly.


Thabo Masombuka, executive director of transformation services at Siyakha Consulting, said blacks needed to change the way they amassed wealth instead of focusing on buying BEE stakes from white companies.


“We approach BEE from a minimalist point of view. The top 20 rich black South Africans have stakes in white companies and they have rarely created wealth by starting companies from scratch.


“If blacks want to create meaningful wealth, they must start their own companies instead of buying small stakes from white companies,” said Masombuka, a former director of BEE charters and partnerships at the department of trade and industry.

 

[Bizkit87]

and your opinion on this? or do you feel like upping the post count !?

Anyway, so much of the racism in this, its not even funny [yet, it is ]

Can 'blacks' not create their own wealth? is there only an X amount of wealth, and the only way 'blacks' can get it, is to take away from 'whites' ?

“We approach BEE from a minimalist point of view. The top 20 rich black South Africans have stakes in white companies and they have rarely created wealth by starting companies from scratch.

Can you please tell me what a 'white' and 'black' company is? i though a company is a business organization, an association or collection of individual real persons and/or other companies. So if you are 'black' and you work for a 'white' company, does that mean you don't exist?

People must stop this mentality that the only way to gain riches is to steal/take from the 'whites'. Whites always gets blamed for 'being too rich' and 'blacks' always want to use their culture as an excuse for not working as hard as whites. Why not change some aspect of your culture? as far as i'm aware 'white' south africans have a worldwide reputation for being hard and dedicated workers, can't we extend that to 'black' south africans?

The only way you will get rich [exept if you are ANC-comrade] is by blood, sweat and tears. It takes hard work, dedication, numerous hours, tight spending budgets etc to build a succesfull company, not just 'we MUST have....'

ok, end rant...

 

[fantasticfred]

So much for all the histrionics about BEE. Hasn't made a dent in hurting white prospects it seems. Can people stop pretending it's kryptonite to white wealth now ?

 

[Nick333]

What gets me is the statement that 87% of top 100 companies are owned by whites and foreign investors. Why are whites bundled in with foreigners?

 

[Bizkit87]

What gets me is the statement that 87% of top 100 companies are owned by whites and foreign investors. Why are whites bundled in with foreigners?

UHm.... duhhhhhh, only black people are africans, don't you know that!?

 

[Nom Chompsky]

What gets me is the statement that 87% of top 100 companies are owned by whites and foreign investors. Why are whites bundled in with foreigners?

I think the underlying assumption here is foreigners are white/Western as well. However, I'd be weary of making such an assumption considering SA [and many other African countries] are basically 'owned' by China...look at the Dalai Lama debacle.

 

[fantasticfred]

What gets me is the statement that 87% of top 100 companies are owned by whites and foreign investors. Why are whites bundled in with foreigners?

The article is about black wealth. Whites and foriegners might not be the same, but we're not black South Africans by definition. You're being far too touchy.

 

[Nerfherder]

Can you please tell me what a 'white' and 'black' company is? i though a company is a business organization, an association or collection of individual real persons and/or other companies. So if you are 'black' and you work for a 'white' company, does that mean you don't exist?

+1

 

[Nick333]

The article is about black wealth. Whites and foriegners might not be the same, but we're not black South Africans by definition. You're being far too touchy.

You're being to fccking presumptuous about my emotional state.

Making a comparison of black ownership vs everyone else is meaningless. What is a fair metric for sitting equity goals and at what point is the problem a question of foreign vs local ownership as opposed to a racial metric? It stinks of agenda driven spin.

 

[fantasticfred]

You're being to fccking presumptuous about my emotional state.

Making a comparison of black ownership vs everyone else is meaningless. What is a fair metric for sitting equity goals and at what point is the problem a question of foreign vs local ownership as opposed to a racial metric? It stinks of agenda driven spin.

Well if we were talking about white South Africans and comparing to everyone else we obviously lump them in a different group. So it would be "blacks and foriegners". How is that offensive ? Nothing racial about it. It's specifically says it's talking about black ownership versus the rest.

 

[BBSA]

So much for all the histrionics about BEE. Hasn't made a dent in hurting white prospects it seems. Can people stop pretending it's kryptonite to white wealth now ?

Rooster, are you trolling again?

 

[zizebra]

Flawed article, but this the same old debate black vs white. Just a minor variance, if it helps, I can help you all understand that noone worked hard, white stole, and black is crying just to be allowed to steal back.

Opportunity came in the form of bee and of course he who gets to the party first, and knows why he is there gets to party big time. Obviously, the comrades didn't fight for nothing.

Sent from South Africas most popular smartphone BlackBerry

 

[Nick333]

Well if we were talking about white South Africans and comparing to everyone else we obviously lump them in a different group. So it would be "blacks and foriegners". How is that offensive ? Nothing racial about it. It's specifically says it's talking about black ownership versus the rest.

Right except my problem is with taking any country specific race group and comparing it with everybody else. You could set a goal of black South African ownership as a percentage of all ownership but its meaningless to specify white and foreign ownership then lump them together as a group. Is 17% black South African ownership undesirable? How and compared to what?

 

[fantasticfred]

Right except my problem is with taking any country specific race group and comparing it with everybody else. You could set a goal of black South African ownership as a percentage of all ownership but its meaningless to specify white and foreign ownership then lump them together as a group. Is 17% black South African ownership undesirable? How and compared to what?

Ok, I'm with you. It's true this fixation with race is getting long in the tooth. But with the countries history and fixation with equality you should really have a thicker skin by now. Consider it a compliment that you are held as the standard people should strive towards.

I remember the B.B.C once proudly announcing it was a wonderful achievement and great news that more females attended university in the U.K than men now.

Not for men whose needs have been abandoned by the education system in the U.K. I thought.