Dear All,

It felt like the other day that I sent out a circular but in reality it was just under 3 months ago. I have a few small firm changes to announce as well as discussing a few things which may be of interest to the really bored.


To highlight the irrationality of the playing field we are trading in the first 6 months of the year I will throw out a few statistics.

  • In January it cost you R15.10 to buy a dollar, today it costs a mere R13.60, a drop of 12% in less than 6 months. Not good news for those of you selling in USD or investing in FOREX, but good for importers and manufacturers using imported components.
  • The All Share Index of the JSE (ALSI) has increased from 59 408 to 68 922 from 01 January to date. This is an unbelievable increase of 16% which does not seem to have filtered through to the Unit Trust prices, nor supported from any listed company results which I can see.
  • The past few weeks’ crypto currency has taken a knock; on average they halved overnight causing some sad looking bitcoin bandits. I suspect there is some high level manipulation going on with these financial instruments and, as with all high risk investment, there is a high level of volatility. As much as Crypto flies in the face of conventional economic theory, and much of what I have learned over the years, the new trading environment we find ourselves in may well require the rewriting of theory. I would not write crypto off by any means, but I wouldn’t recommend anyone buys it with money they cannot afford to lose. Conventional wisdom dictates that no more than 1% of your investments should reside in highly volatile instruments.
  • The repo rate remains the same, all predictions still stand that the rate will hold to end 2022. Once the brakes come off, strap yourself in, you may be in for a ride. Plan your debt accordingly.
  • The price of gold has been surprisingly suppressed with virtually no movement between 01 January and today. I say surprisingly, as gold is a commodity where money goes in times of uncertainty. This increase in demand usually causes an uptick in the price. In rand terms the holders of gold bullion, as I know many of you are, have been whacked by the increasing rand strength resulting in a rand value drop of around 15% this year so far. Don’t panic, gold has a habit of coming back. Either the rand will weaken or the Gold price will respond to demand and increase. I suspect the latter but that’s just an uneducated guess.

These are just a few key indicators of haywire volatility, I could go on but they all point to the same conclusion, mass uncertainty.


Now that some of our 2021 results are starting to come through (I say starting, I should say flooding, would you all slow down we are battling to keep up), we are starting to get a better idea on the actual cost COVID has had on South African SME business. We represent a pretty good cross section of business so I always find it interesting as these results show the real story of what is happening at the coal face as opposed to what is read on NEWS24.


For easier reading I put in a few broad observations. I say broad as I need to respect everyone’s confidentiality.

  • The Restaurant industry has lost around 50% of its annual turnover throwing most below breakeven.
  • Other industries at the back end of hard lockdown took 30% to 40% off the top line.
  • Service industries maintained their turnover, or suffered smaller decreases. This has been more manageable and most have managed to retain their profits through judicious cost cutting and employee rationalisation.
  • Property companies are taking a turnover knock, both from giving COVID relief to their tenants and being on the receiving end of aggressive lessee negotiation. Demand is dropping resulting in oversupply which has a direct impact on what people are prepared to pay. This effect has been negated to a certain extent due to an almost halving of interest rates yet as mentioned earlier, this window may be short lived. Conservatively to retain your wealth, should you be heavily encumbered, you may be well advised to rationalise by selling some off to settle liabilities. This will make you more resilient in the upcoming years should the property market become depressed. Again, just my personal opinion based upon what I see and read.
  • Industries which either adapted or were in the online space are booming. It’s the whole “When one door closes another opens” adage. I have said it before, if your business can benefit from an ecommerce strategy you are urged to explore this as a priority. This is the foundation of the changing business landscape we are in and in it exists much of the opportunity of the future.
  • Industries in niche markets seem to be unaffected, these businesses often march to the beat of a different drum. Cellphone retailers, Internet Service Providers, basically the entire support industry to the businesses mentioned above.

Aside from the fortunate ones, it is quite apparent that the much maligned TERS Scheme was a very real lifeline. This combined with low interest rates and rental relief resulted in passable profits in 2021. What is however noticeable is that monthly turnover levels have not returned to pre‐covid levels, and quite when they will is largely in the hands of higher powers. A statistic I saw on Al Jazeera, of all places, was that in South Africa 7 000 000 people have become unemployed due to COVID. Whilst the truth behind this statistic may be exaggerated the truth is that business across the board is downsizing as a response to diminishing turnover as a means of survival.


As Government assistance wanes and access to borrowing becomes increasingly limited, business streamlining must become one’s daily task.


As much as I am waxing lyrical there is still no substitute for good old fashioned hard work. One of the startups we represent, which is in the manufacturing sector, opened its doors in January this year. Could there be any worse time to start a business? Big shout out to Quintin and Jonno, 14 hours a day, 7 days a week, a lot of common sense and a tinge of hardheaded‐ness is the recipe for creating a business which is starting to boom after a mere 5 months. Hats off to you guys and some good old South African gees.


An existing entrepreneur, Karen, didn’t do too badly either, starting an online retail from scratch in the middle of lockdown and creating a profitable growing business in around 8 months which anyone could be proud of.


Anyway, I have done my usual and turned what I thought would be an intro paragraph into 2 pages.
The newsy point of this circular was to give you titbits of MRM news.


Casey Eigenmann, who has been with us for 6 years, starting as receptionist and going on to complete her SAIPA articles with us, has decided to spread her wings and has taken up a position with one of our clients. Mark, the placement fee is coming still…..I like Brandy, Shireen likes Gin.


Lushan Ramachandra and Unika Surajballi have both completed their articles and are candidates for the SAIPA PE examinations to be written later this year. They have both decided to stay with the firm, Lushan has taken a position as Supervising Accountant and Unika now becomes an Accounting Technician. They are both good folk, as many of you know, and we are delighted that they have chosen to stay with our family.


We have found demand growing in both our Payroll Department and our Xero Consultancy which has turned Derane and Taryn grumpy due to overwork. In order to return them to their sunny dispositions we have Eshan and Kiara starting in 2 weeks time as Accounting Technician and Bookkeeper respectively to bolster our team and our service delivery.


Aside from that we have an influx of work, which is to be expected, and Minesh and Derane are dancing around like cats on a hot tin roof. If you have any deadlines for final accounts imposed on you, which we are unlikely to know about, please get hold of us in order that we can make sure you are accommodated.
So, be safe, trade cleverly and be risk averse. As always Shireen and I are available for anyone who wants to discuss their business strategies, just give Tanya a call and we can have a chat and some coffee.


Keep Safe,
Chris, Shireen and the MRM Team