Jozi, Jozi. 26o 12′ 16″ S, 28o 2′ 44″ E. Another day and another record high for the exchange of the city built on a giant deposit of gold. The Jozi all share ramped to 34371 points, up 231 points on the day. Or 0,68%. Resources added nearly a full percent, Anglo American was on fire, up more than 4% at one stage; we will discuss later. Banks added 0,9% and seem to be  defying the consensus view out there. Telkom, which is always looking to touch tomorrow and which should rather focus on today, fell nearly 2%. I am starting to get the feeling that even though a brave face is being put on by Telkom that the Koreans from KT Corp might not like what they see, the longer they stay here and sniff around. There was also news that Telkom data caps would increase by 20%. More surfing, same old speeds.

Somehow the drinks saga at Woolies and their old (with an e) fashioned drinks, copied or not, seems to have attracted an enormous amount of attention. I guess a score for the small guy, which ordinary folk always like to see. A blot on what is normally a good Woolies scorecard. The Advertising Standards Authority found in favour of Frankie’s, and Woolies was ordered to remove the offending drinks that looked the same. Not sure about the taste; not into too many fizzy drinks outside of the classics. Big story, no. Big interest, yes.

By far the biggest news yesterday (apart from the Facebook IPO, that was huge) was the imminent announcement that Xstrata and Glencore would merge. So? Who cares, you ask? Well, listen in here for a bit, just concentrate. First, Glencore owns 34% of Xstrata. Both are listed in London. Both stock prices went up, because this would be seen as a positive merger for both sets of shareholders. But many tongues started wagging that the combined entity, of about $80bn or so, could set in motion another wave of resource company consolidation. And of course Anglo American was once a target in the merger of equals advance from Xstrata back in June 2009.

The possibility of the combined entity (Glenrata or Xstracore) acquiring Anglo American seems to be closer to reality however. The combined entity would have more muscle to sway Anglo American shareholders into their argument of an even bigger entity. As a consequence of seemingly all this good news for all shareholders concerned, the London price of Glencore added 6,52%, Xstrata added 10,43% (same place) and Anglo American, also in London, added 2,76%. So I guess now it does concern us, the world’s largest listed commodities trader and a well-pieced-together commodities miner. And, by no coincidence there is a stronger connection to us than you might think. Mick (Michael) Davis, who runs Xstrata (and who would run the combined entity) is South African by birth. He went to Rhodes University in Grahamstown. He worked at Eskom for nearly six years.

But wait, the fellow who runs (apparently a few miles every day in his running shoes too) Glencore is a fellow by the name of Ivan Glasenberg. He grew up in Illovo, just up the drag here, and went to Wits University, also round here, six or seven offramps south on the M1. Glasenberg has been running Glencore for as long as Davis has been running Xstrata, about 10 years. But Glasenberg has been at Glencore for years. And in the nearly 30 years there has built his stake up to just shy of 16% of the business. As such, he is the richest South African. Technically speaking, of course. I am guessing that Switzerland, Hong Kong and Beijing have been mostly home in that time.

These guys are smart. Real smart. Some of our finest exports. And really well regarded. Glasenberg is no longer out of public sight; his business, Glencore is no longer a secretive entity. Perhaps it is time to take it up more than just a few notches. I would not want to put the proverbial horse before the cart. The regulatory authorities across the globe would give this deal a long and hard look. So, no talk of Anglo being a target until this deal is finalised. Both the WSJ and the FT reports that I have read suggest that according to UK law, Glencore has until the first of March to announce a formal bid. Bloomberg broke the story, that is what I can understand. They are all my favourites.

In the meantime, you might as well familiarise yourself with Xstrata’s operations. Nice. Big news. Ironic that Mr Market thinks that two “Swiss” businesses run by South Africans could be looking at acquiring a South African (history anyhow) business run by a North American. Anglo. Swiss. North American. In London. Mick, Ivan and Cynthia. Sounds like too much Cluedo. Paul added some colour to this story (and others) last even in his Mad Markets piece (watch it on YouTube: 2 February – Mad Markets with Paul Theron). This is the daily slot that you can catch on channel 410 on CNBC in closing bell.

MTN. It is complicated always with a business that is in multiple geographies, especially as I sometimes say, not exactly places where you would vacation. One such place that has been under the spotlight for a while is Iran. And quite a few folks are getting more than a little agitated about this. Iran is reportedly close to having a handful of bombs of the nuclear kind. That worries other people who have that capability too. MTN has a business in Iran, quite a good one. It beat Turkcell in the last round of the bidding process and, as far as I could understand it at the time, because MTN was not as excited about having to own 50% plus one share. Turkcell wanted that. But at the time I think that Turkcell also had a connection to Israel, and let us be honest, Iran and Israel are as far apart as you could ever get, in terms of relations. That aside, MTN pipped Turkcell to the post and its Iranian business is huge.

There are some very damning allegations that Turkcell is making not only against MTN, but also against a South African official who is not yet named. Very damning — make what you want of this, but make sure that you read it carefully.

“Turkcell has informed MTN that it believes it has a claim against MTN and its relevant subsidiary, arising out of the award of the 2nd GSM licence, based on alleged violations of United States laws (the Turkcell US claim), and has indicated an intention to bring such a claim before a United States court. No such claim has been filed or served.

“As MTN understands the Turkcell US claim, it would allege that, in approximately 2004 to 2005, in an effort to cause the Iranian government to issue the 2nd GSM licence to MTN rather than Turkcell, MTN made improper payments to an Iranian and a South African government official; that MTN encouraged the South African government to take a favourable position toward Iran’s civil nuclear power development programme at a meeting of the International Atomic Energy Agency in November 2005; and that MTN enlisted South African government support for the provision of military equipment to Iran. Turkcell has intimated a range of putative claim amounts, the nominal value of which, if formally asserted, would be material.

“No basis for any such claim amount has been substantiated to date. The MTN board of directors, on legal advice, presently believes that the Turkcell US claim lacks legal merit, and that, in any event, a US court would not have jurisdiction to entertain the claim.”

Wow. Amazing. All damning information if true.

MTN has responded:

“The board has appointed Lord Leonard Hoffmann, an internationally renowned jurist, to chair the committee, to oversee and validate its investigation, and to ensure the integrity and independence of the investigation.”

We wait and see what will transpire today. We will keep you posted on events.

The saga at Impala continues. I am sure Terrence Goodlace is pumped for the top job after the past two weeks. I did see that the fellows from Cosatu finally thought that getting rid of a whole lot of workers was completely offsides. Their message, of course, took a swipe at the platinum miner:

“The NUM believes that Impala Platinum applies underhand tactics to incite workers into strike, obtain an interdict and fire them.”

Of course, evil capital that never creates jobs, underhanded all the times.

The release from Implats makes it pretty clear of what has happened over the past few days:

“Implats wishes to advise that approximately 13 000 mining employees who participated in the illegal work stoppage at Impala Rustenburg which started on Monday, 30 January 2012, and who failed to return to work by the deadline of Wednesday, 1 February 2012, have been dismissed. This brings the total number of employees dismissed to in the region of 17 200. A process of rehiring for those employees who wish to reapply for their positions will be undertaken in due course.”

But I thought as much about the “other” non-affiliated union, as far as the silence from the NUM was concerned. Solly Phetoe, Cosatu North West provincial secretary, said in his piece:

“We want to remind all workers that if they have a problem with its union, which is a Cosatu affiliate, they must report it to the federation before they jump to the criminals’ union that will take their money and go.”

So Rustenburg Implats miners have seemingly jumped ship to the other union, which Cosatu and the NUM refer to as criminals. No money, no care. Yip, workers of the world unite indeed, unless of course you want to join a rival union.

Byron’s beats explores another trading update. A good one at that.

Yesterday we had a very good, but also expected, trading update from one of our long-time recommended companies, Sasol. I remember at one stage we were seriously considering taking this company off the list because of the long-term environmental issues, Sasol is the second-biggest polluter in South Africa. But after closer inspection we saw a shift in the company’s focus to the much less carbon-intensive gas-to-liquids (GTL) process as opposed to the coal-to-liquids (CTL) method. Don’t get me wrong, CTL is an integral part of the business but the fact that this company had an innovative alternative was reassuring. Not only is it extremely serious about sustainable growth as far as the environment is concerned, but it also saves the South African government R40bn a year in foreign exchange. This gives Sasol a lot of bargaining power and keeps South Africa from being too dependent on volatile oil-producing nations.

So let’s look at the numbers. They actually released an update in November last year declaring an expected 45% gain in earnings. This has now been handsomely revised.

“Sasol is now able to indicate that the increase in EPS and HEPS for the six months ended 31 December 2011 is expected to be between 80% and 90% compared to the prior comparable period.”

Wow, that is huge. I had a look at the comparative period and this time last year it made just under R13 a share. That means it is expecting to make about R24 a share this time round. Annualise that and you find Sasol trading on a forward multiple of 8.5. For an innovative company such as Sasol that turns coal and gas into oil, that sounds extremely cheap.

Let’s look at why the numbers were so good. In the last update this is what Sasol indicated.

“The expected increase in earnings was mainly due to solid operational performance in our businesses, coupled with a strong improvement in the average crude oil and product prices and a weaker rand/US dollar exchange rate.”

But what happened at the end of last year? The oil price remained strong and the rand weakened. A perfect storm for Sasol and the reason I say the revised trading update was expected.

Currency swings, however, are unpredictable and volatile. Sometimes they will go in Sasol’s favour, sometimes they won’t. For us, the long-term fundamentals for the oil price are still solid. Only 50 in 1000 Chinese have cars, and sales in that region are growing fast. Unrest in the Middle East is also underpinning the price although that is not something we view positively. The company’s operations also look strong with big gas investments in North America providing encouraging prospects. We will have to look at the operations in more detail when the results come out, but on the face of it, we are very happy to be adding to Sasol at these levels.

New York, New York. 40o 43′ 0″ N, 74o 0′ 0″ W. Stocks did well and then not so well, but ended about flat. The nerds of Nasdaq, the tech stocks, mostly did better than the rest of the market, while blue chips ended marginally lower. Weekly jobless claims beat expectations marginally that gave us a little boost, there was also a productivity read that looked very decent to me, but was slightly lower than anticipated. Unit labour costs were slightly higher, which is both good and bad. A bit of a mixed bag then in the end, so I guess all things considered, markets ending flat was the appropriate outcome.

Today, of course, is nonfarm payrolls — the most exciting event for the trigger-happy traders. This is data for the month of January. And the expectations are, drum roll: 150 000 jobs expected to have been added, for the month of January. And the unemployment rate is expected to be 8,5%. I think that could be better, perhaps the number itself; well, your guess is as good as mine. There is way too much emphasis placed on this number. But it is what it is, so I am certainly not going to fight it.

Commodities and currencies corner. Dr Copper is last at 382 US cents per pound. The oil price, my other favourite useful commodity, is last at $96,51 per barrel. The gold price is last at $1758 per fine ounce, the platinum price is $1628 per fine ounce. The rand is still slightly firmer, at R7,64 to the dollar. We have started a little lower here this morning. We all know what number is going to be the most exciting today.

Sasha Naryshkine and Byron Lotter at Vestact