this business news briefing is brought to you by Investic Business Banking Make the move from business as usual to Investic Business [Music] Banking It's Wednesday the 26th of March I'm Alec Hog and here's your business news briefing Last night the White House named Leo Brent Bozel as its pick to be the US ambassador to South Africa Uh the 69year-old is a conservative activist who founded the media research center and has been running it for the last 38 years is its intention is um to take on what it perceives as liberal biases in American media And
indeed it's called for shutting down NPR and PBS the public service broadcasters Mr Bozel was a surprised choice ahead of front runner Joel Pollock who we've spoken to fairly often in the past few months I asked Tony Leon who knows Pollock well what might have cost him what appeared to be a position that he did want as ambassador here to South Africa I have no idea you know how the State Department or the White House makes these appointments or selections Uh Joel Joel has a deep knowledge and actual empathy for South Africa Although you know
he lost people think that there's some sort of you know whisper that I whisper in his ear or vice versa Complete nonsense Joel worked for me last 19 years ago or you know but I have high regard for his work ethic and his professionalism But I you know I don't know what it was What interested me is a lot of people uh were saying on X or Twitter oh you know his campaign to be appoint ambassadors failed Well be careful what you wish for because whatever the pluses and minus of Joel would have been as
an ambassador uh the actual person selected uh seems like a a flamethrower from the mega Trump world So I I would people who rejoicing in Joel's non- selection should be a little cautious about what might be coming our way soon or who might be Tell us about Mr Bozel the man who has been selected Alec I know absolutely nothing about him Uh and to be honest until last night when I read up about him I didn't know of his existence but what I have read which seems to be incontestable is that he is a extreme
conservative He uh is uh set up an NGO which uh takes on distortions in the uh so-called mainstream media He apparently thought I thought when I lived in America in 2007 that uh uh public broadcast radio was fairly mild He wanted it closed down for being uh uh biased He his son was arrested and and sent to jail for his uh January the 6th storming of the capital and he himself uh denied the outcome of the 2020 election But what his views are on South Africa or indeed the wider world I have no idea I
guess we'll get an information because every ambassadorial nominee has to go through a Senate selection process and that is when there'll be back and forth questions and answers and you might get some insight into how uh Mr Bozel views South Africa Of course South Africa has a role in the ambassadorial process because um as as you know there's a process called Agriar which means that the receiving country has to accept the credentials of the proposed ambassador So I guess that is going to be a test if you like for uh South Africa Now we know
Mr Bozel's profile because you know it's available on in in in on the internet How's South Africa going to respond to this nomination Is it going to greenlight it Is it going to reject it Is it going to play tit for tat after the rasool expulsion Who knows If you have a look at his public profile he's got the star of David up there Uh the last ambassador was well they were quite happy that the proposed uh or the front runner Joel Pollock was very strongly pro- Israel It appears as Mr Bzel's even more so
Might that count against South Africa accepting him Well look I don't know but uh whoever uh Trump is going to send to South Africa and to other significant outposts of American diplomacy is liable to be very pro-Israel that is uh very high up on the Trump administration list of uh issues and um South Africa visav the United States and Israel is on the wrong side of that issue So actually whether it's Bozelle or Pollock or some other person uh if America is going America's representative in South Africa and the world is going to have a
very explicitly pro-Israel inclination that that's a fact the personality is less important than that policy because that is the policy of the Trump administration and South Africa as you know has got a completely contrary policy and that is one of the issues that uh is at the heart of the conflict between America and South Africa right now Tony Leon was the former leader of the opposition and has been proposed or suggested at least by Helen Zilla to be South Africa's ambassador to the United States I did ask him about that and uh he answered I
thought very rationally but that whole interview is up on Biz News TV on YouTube Well while the ANC's continuous slide in the polls has surprised its leadership and indeed many of those who've been following politics in South Africa it certainly hasn't done so to RW Johnson the former Oxford dawn Johnson delivered a superb address to BNC 7 our conference in Hermanus earlier this month where he provided a compelling case for why the ANC is slid so far and indeed why it will continue to slide and in essence the leadership of the party don't understand what
its constituency really wants and in fact what it's proposing continuously is totally at odds with what people its voters uh would prefer it to do Here is Mr Johnson Quite early on in Tabo's time um when he was president the business community offered to lend him a thousand of their best managers saying you could use them any way you want but you need really good managers to do the things you want Now instead of being pleased he was furious and saw this as white arrogance and wouldn't speak to them for years on end as a
result Uh because he he actually reacted very badly to that But in fact of course um his view of things was not at all typical of that mass uh feeling It was the opposite really And the interesting thing is and I remember Lori taking me through the figures when I first arrived back He's saying "Look you know it's curious because the dominant group ANC leadership tends to be atheists agnostic uh and it tries to have progressive views about all sorts of things But the ANC mass electorate is quite conservative It deplores the abolition of the
death penalty It doesn't like abortion Generally homophobic It's quite patriarchal And it's often xenophobic These are not at all the attitudes approved of at the top level And so what you've got is a left-wing party leading a majority which is mainly Christian conservative Moreover if you ask this is something I've noticed when I started doing opinion survey work in the middle 90s I was struck by it then but it's remained absolutely true throughout and is true today Is that mass opinion including A&G mass opinion is strongly against affirmative action It believes that you should have
the best person for the job and that only merit counts These are people who suffer the consequences if you put the wrong people in charge and they know and it's it's not at all controversial among the mass electorate It's it's always been like that Now the interesting thing is that um the most I suppose the most striking case of this is the land issue As you know whether you're talking about EFF or MKP or ANC the leadership love going on about land and uh hence expropriation and so forth it's always the most emotive issue But
when we ask voters at large which issues are important to them land usually comes out between 2% and 3% It's way way down Doesn't matter at all compared to unemployment And to the great distress of the ANC leadership when African groups win their case and get the right to land they always prefer the money They don't actually want the land It's a wonderful address by RW Johnson And incidentally he has just written another cracking piece which is on Biz News Premium our favorite columnist Our tribe just loves the former Oxford Dawn Well they've also taken
to Prince Michelle who like RW is a bit of a history buff He loves reading Uh he loves reading about South African history and uh he also is deeply embedded in political science Prince Michelle offered some excellent ideas at the biz news conference on how to fix the beloved country but he also delivered a stern warning as you will hear in this clip from the Q&A section of his hour with delegates Once again the full hour is available on Biz News TV on YouTube right now There are few problems that we the living are battling
with that the dead haven't confronted That's the thing and it's it's fascinating about human beings We think that we are advanced compared to animals because we have consciousness and we can plan and imagine but we keep repeating the same stuff It's it's like this idea of coalition for example Most people think that coalition politics in South Africa is new I mean it's only ignorant people who have no idea of South African East The first coalition by the way was actually in 1910 That was a form of coalition between the English and the Africanas It was
a coalition These were former waring parties They came together They co-govern the union buildings That's why the Union buildings has two wings The west wing and the east wing The second coalition which was produced by an election was actually 1924 That is Herzo and Creswell There was a coalition and there were others others But here is the thing about it What I've learned um after reading South Africa's history is this is that South Africa is such a complex country for it to work the formula is not complicated You need former enemies to work together and
commit to it This is the summary of the story So going forward any political party that thinks that it stands for white people only shall not succeed Any political party that thinks that it stands for black people only shall not succeed I know there are people Africanas who I've been invited by Trump and they think Mima is a mala will not govern South Africa Historically by the way black people have never supported a party that said we are for blacks only The black consciousness movement PAC before that all of them never succeeded So the only
formula this is what I've learned from history is that both blacks and whites difficult as it may be must work together That's the only way South Africa will succeed So the GNU good project the GNU by the way it's a bridge because it's forcing us it's very difficult I can tell you Helen is kicking and Baluda is also kicking they're all screaming it's part of history is not easy it's very difficult but you know you need to be tenacious and committed to the project uh so it is it is the genuine it's a difficult process
but it's absolutely important I would advise that the ANC I'm not sure if the ANC will listen to me must never walk out of this coalition They must do their best never to walk out of this coalition Same advice goes to the DA However difficult it is Helen Never walk out of this coalition That's my advice Because if we don't do that we will send a message that white people and black people cannot do things together And let me tell you that would be an extremely dangerous message to send for our future At Sun Exchange
we make going solar simple profitable and completely risk-f free Join over 100 satisfied South African customers already enjoying the benefits of risk-free solar Start saving today Visit sunaxchange.com and join the solar revolution In the world of business banking the bottom line can often triumph over relationships At Invest we value both Make the move from business as usual to invest business banking Out of the ordinary It's a wonderful wonderful presentation that Prince Michel gave us I picked up on the GNU story with Tony Leon this morning and so you'll be able to hear more about that
because what has been interesting and uh I posed this question to him is that the ANC in its desperation to get the budget through has been approaching pretty much everybody So it would allow the DA to vote against the budget and still manage to get the budget passed But it dropped the ball there quite heavily when the uh action SA team said not on your Nelly We're not prepared to come into your government of national unity Not at all Uh we think that the other parties who joined you ANC did so uh without actually looking
at things properly in the first instance It's part of that interview with Tony Leon He's got some again some really interesting feedback on that point Well moving on to matters of investment now And there's a growing divergence of opinion between retail investors i.e you and I and the professionals who have the big money uh balance sheets of institutions and indeed work on behalf of pensioners in many respects And that's about where the US stock uh prices are heading Our partners at the Financial Times of London picked up on this in this morning's FD news briefing
President Donald Trump's economic and spending policies have as you have probably already heard by now unsettled the US stock market but try mentioning that to retail investors Mom and pop have plowed nearly $70 billion into American equities this year even though professional money managers are saying they might be getting cold feet My colleague Rob Armstrong has been looking into the moves and he's here with me now Talk to me a little bit about this split screen here What's going on Well the first thing is it turns out to be quite hard to discourage the retail
investor trading on like a Robin Hood or some other app and they like to chase the big money and they've been chasing it really since the pandemic the recent wobble in markets This just has not scared the stay-at-home trader So those are retail investors feeling you know really optimistic but money managers uh not so much Well it is a question of feeling There's a very famous survey of institutional money managers which is run by Bank of America's strategy team and the latest edition of that showed one of the biggest falls in bullishness about US stocks
among institutional investors The survey had almost ever seen Enthusiasm kind of fell off a cliff However if you actually look at what professional investors have been doing there continues to be strong inflows of institutional cash into stocks So there's a kind of split between doing and feeling or sentiment and action Well that's really interesting Is there something behind this idea of buying the dip right now Rob Well well what's behind it is just history What we're seeing in terms of buy the dip is exactly what investors whether institutional or individual have been conditioned to do
by recent history US stocks are what have worked better than anything else And once you are conditioned that way you are Pavlov's dog The bell rings and you slobber stock prices fall a little bit and you buy the dip Okay Uh that is quite the visual But uh when it comes to these individual investors just how big of a role do they play in the wider market Certainly individual investors can make a difference in stock markets especially on the individual names that they tend to focus on So individual investors like to buy the big shiny
headline stocks we all know about whether that's Tesla or Microsoft or Nvidia or whatever And with those stocks it's very clear that individual retail sentiment matters For the lesser known names smaller companies it's more the institutional investor that makes the difference because they're going to be more sophisticated about what they buy Okay they know more of the ins and outs They're not just as it were focused on those bold-faced names And one of those names is Tesla And Tesla's share price continued its recent momentum last night was up 3.5% Closed at $288 That is a
gain in the last week of 23% This is despite really poor sales in Europe news that was expected to send the the share price falling And so our partners at Bloomberg explore what is behind this counterintuitive move Why are we not sinking more on these yet further dire sales news out of Europe Well I think there's a lot of enthusiasm with the full self-driving technology Yesterday's news that full self-driving was approved in China bodess well for China sales This is a far bigger market for Tesla than Europe And so when you look at full self-driving
we have the robo taxi testing that's going to be launched in Austin The full self-driving unsupervised launched in Austin and will come to California later this year And then with the positive news of being able to launch the supervised level two version of full self-driving in China that bodess well for Tesla delivery So I think that's the momentum that's that's carrying heavier today versus the European deliveries being down Okay Is that optimism enough to vindicate the about a 100 times future earnings that we currently trade at for Tesla As we were just hearing from Bailey
Well Tesla's a very high growth stock has been for years And with Tesla still having strong growth prospects whether that's the energy storage system whether that's robo taxis full self-driving subscription softwares there is still a lot of room for the Tesla growth story to play out So I think the market is still valuing that Tesla does still have a lot of growth left Even if the Model 3 and Model Y are approaching that that limit of of deliveries they still have the new more affordable SUV coming out later this year that should then push deliveries
back into growth Seth get into the details here Therefore is it the fact that they haven't really had an overhaul of their current product that is limiting current sales and of course the mismatch as they try and iron out a new form of production Or actually is it the politicking of Elon Musk taking an effect here It's still unclear what the drivers are behind the first two month decline especially in the European market You could have a lot of consumers waiting for the new Model Y which just began deliveries in Europe in March So consumers
could have been holding off until they could secure a new Model Y You also have the more affordable vehicle being launched And so some consumers may be waiting for a lower price point vehicle from Tesla But in the European market especially you finally have long range EV competition at a comparable price For years the Tesla Model 3 or Model Y was the only long range in this case I'm defining it at least 400 kilometers or more of range at the same price That would be uh as the same as an IC after subsidy So for
key markets like Germany or the UK a Tesla was the most affordable long range EV Now you have other competitors who are offering long range EVs at a similar or slightly cheaper price point And so there's true competition for the first time in in the European market and that could be leading some consumers to choose a different vehicle besides a Tesla A cameo from Hendrickk Deoy the founder and CEO of 91 to end off with Hendrickk is uh well a guy who started the company now South Africa's biggest asset management company and huge force around
the world um from its bases here in South Africa and in London He started the company with a briefcase and a desk and now our partners at Bloomberg hunted him down to get his insights on what's happening around the world and in particular the Trump tariffs Here's Mr Detroit I'm an open trade person I was educated in economics at a time when people believed in free trade And if we look around ourselves in Hong Kong and we had uh Eileen Bashesky here today and if you look at China where I was last week and the
benefits it had from participating in global trade it's very clear that open open trade is better So I think we learn that at great expense to the world economy But I don't think the United States will ne not necessarily either suffer or you know it it'll suffer its consumer will consumers will suffer but it is not a major exporter it's Asia that exports and so we are going to see trade corridors changing supply chain changing and as investors and as stewards of capital we've got to understand those because there are going to be big winners
big losers but I don't think it's a simple calculation I don't it's too early to say We don't even know what April 2nd's all about right And it's barely a week away Exactly I want to pick up on Europe then I think we can talk about your China trip in a moment because that's a very good point you brought up that you know for the longest time global investors look at Europe largely as a value trap that's given us something to think about now How do we need to be thinking about a European exposure longer
term Is that I mean does this rally have legs to go How do I need to be thinking about Europe I I think it does have legs for two reasons One is a marginal improvement in European governance Uh in other words moving away from regulation to stimulation and and encouraging growth and especially technology off higher defense expenditure because we shouldn't we shouldn't be we should be very clear The reason why the US has Silicon Valley is not just because they're great entrepreneurs It was driven ultimately by the the the the government and defense research budgets
originally Yeah we should understand that So I think Europe will be better off But more importantly capital and most the world's mobilized capital is in North America Capital has suddenly woken up and realized one-way bets don't work Okay And therefore the old argument for diversification around the world looking spreading your money over more opportunities will itself create uh an influx of equity capital or risk capital into Europe and that will add a further further marginal benefits Then it's up to Europe to take the the ball and run with it And I know Asia will run
with it Right I I want to pick up on Dave's question there about your trip to China I mean key takeaways from your trip where you went but also you know how it compares to your last visit Is the mood on the ground shifting there Interestingly the mood in Hong Kong is a lot better than a year ago And that is that I found very interesting partly because of I think wise stewardship from the Chinese side Chin made an excellent presentation here yesterday the the minister responsible for the SAR region um but also Chinese economy
uh now having the hope of tech driving further further further momentum and that is spilling over and that wealth is spilling over in Hong Kong So you're seeing a much different it's not the problems aren't solved by any means but I was here just after co when Hong Kong opened or when Hong Kong first opened in the last year uh and now and there's definitely an improved momentum and improved bullishness amongst business peers and investment peers Uh whether that will translate into you know sustained growth we'll have to see but we're hopeful Well that was
Hendrickk Detroit from 91 And that's your business news briefing for today I'll be back again tomorrow Until then cheerio This business news briefing is brought to you by Investec Business Banking Make the move to private banking service now for your business
