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ECONOMIC POTENTIAL OF SOUTH AFRICAN HORSERACING

South Africa’s multi-million Rand horseracing industry (2012) / CNBC Africa

“In fact De Kock’s Dubai string, not all of whom were South African-bred,

raked in 12,996,200 dirhams in total (close to R37,5 million).”

David Thiselton
David Thiselton

David Thiselton

Gold CircleHorseracing as a sport has flourished in Japan due to the support of government. One of the most significant moments from a South African perspective at Meydan in Dubai two Saturdays ago might well have been when the Klawervlei-bred Vercingetorix, who has uplifted the lives of a co-operative of grooms, chased home the breathtakingly brilliant Japanese horse Just A Way in the US$5 million Dubai Duty Free.

The Japanese government prioritised horseracing as an important industry after World War II and it has been operated under direct government control since 1948. In 1954, the government established the Japan Racing Association, a semi-governmental corporation, to conduct all aspects of horse racing. Just A Way is the latest in a succession of world class Japanese racehorses that descend from the immortal stallion Sunday Silence, who won the first two legs of the US triple crown in 1989 and was imported to Japan in the early 1990s. Gentildonna, who won the US$5 million Dubai Sheema Classic at the same meeting, is also a Japanese-bred that hails from Sunday Silence. The Japanese government has also thrown its weight and financial support behind their thoroughbred breeding industry. This has allowed Japanese horseracing to become a world leader and a source of virulent national pride.

South African breeding continues to make an impact abroad and in this regard a lot is owed to the stud owners that have imported stallions like Silvano, Var, National Assembly, Western Winter, Fort Wood, Oratorio, Black Minnaloushe, Trippi, Mogok, Rakeen and others, often at great expense, as well as some top class broodmares.

However, Vercingetorix’s success might have opened up a whole new ball game as the South African government played a significant role in his early life.

It is well documented that Vercingetorix was bought off Klawervlei Stud as a weanling by a grooms co-operative thanks to a R200,000 grant by Donald Mubusela and Thami Klassen of the Department of Trade and Industry. The co-operative, chaired by Abraham Carelse of Riverton Stud, later sold the Silvano colt for R1,4 million at the National Yearling Sale and with the proceeds they have been able to establish themselves as breeders with significant prospects. It is a fairytale economic empowerment story.

Vercingetorix had won his previous two starts in Dubai, including the Group 1 Jebel Hatta, and his three runs there earned his connections 4,728,800 dirhams (over R13,5 million).

Economic benefits will usually accompany national sporting success, so another significant moment on Dubai World Cup night came when jockey Anton Marcus carried the national flag proudly after winning the Group 2 US$1 million Godolphin Mile on the South African-bred Variety Club. The twice Equus Horse Of The Year was followed home by another South African-bred, Soft Falling Rain.

Variety Club had two wins and a second during his Dubai stint for earnings of 2,796,800 dirhams (over R8 million), while multi-million amounts would have also been earned by other South African-bred Dubai Carnival winners, Shea Shea and Sanshaawes. In fact Mike de Kock’s Dubai string, not all of whom were South African-bred, raked in 12,996,200 dirhams in total (close to R37,5 million).

This success highlighted the potential that the South African horseracing industry has to contribute to the economy. The statistics quoted above would “go through the roof”, as De Kock has often put it, if the stringency of the current export protocols could be lifted. South African horses currently have to endure the stress of an arduous five month journey via Mauritius and the UK just to reach Dubai due to quarantine requirements. This is an area where government support could definitely make an impact. An advancement in the export situation would also help the country’s Olympic bid.

Extract from Gold Circle

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FIREWORKS, FIREFIGHTS AND FRACKING

Johannesburg
Johannesburg

Johannesburg - Money Capital of the Continent

(Photo : SA Live)

EMPERORS PALACE NATIONAL YEARLING SALE

TBA Sales Complex, Gosforth Park, South Africa

26 - 28 April 2013

Mick Goss - Summerhill Stud
Mick Goss - Summerhill Stud

Mick Goss

Summerhill CEOWherever there’s gold, there’s fireworks. Goldrushes spawn “wild wests”, and Jo’burg’s been that way since President Kruger was in charge. Remember the Jameson Raid, when Cecil John Rhodes and his cronies attempted a coup of Kruger’s government as long ago as 1896? The plotters were thwarted by a leak from within when the “putch” was postponed a week by the Randlords-cum-racecourse stewards, who feared it might interfere with the running the same weekend of the Johannesburg Summer Handicap (read Summer Cup these days).

This weekend, the Golden City gave birth to another form of fireworks, not only at BSA’s sales complex in Germiston, but right here at Emperors Palace, where anybody and everybody that matters in racing was resident for the sale. Jo’burg in April is as glorious a place as you’d want to be, and Sunday dawned bright and peaceful. The early rays of the autumnal sun had scarcely topped the façade of OR Tambo, when the soft drone of distant traffic was shattered by the clatter of automatic fire. Within minutes, the “Emperors” complex was crawling with the cops from Special Ops, and with the precision of a Rolls Royce motor, a squadron of helicopters was casing the joint from the air.

A replay of the Jameson Raid was in progress. Another leak, another combat-ready intercept team, and in a matter of moments, it was all over. Our cops come in for a lot of stick, but in this form, you’d have to say, all is not lost. This was as near as it gets to perfection: 15 of the continent’s “most-wanted” men incarcerated, no lives lost, a bit of excitement in the dining-room, no more than an hour sacrificed before the resumption of the sale, and we were back in business. Spare a thought for all our foreign visitors, particularly the Aussies and the Kiwis, who are not accustomed to these breakfast antics, and are woefully short on the bullet-proof armour South Africans greet these things with: one of our countryman was more concerned that his eggs were overcooked. The locals reminded our visitors that the gale in Christchurch was blowing up more of a storm in the game between the Crusaders and the Rebels, than this ten minute fiasco had managed. It was all over before the ref could say “crouch… touch… set”.

As for the sale, it was comforting for a number of reasons, not the least of which was the 44% increase in aggregate and a 27% increase in average. The latter figure is all the more laudable, if only because it was achieved in an enlarged catalogued, which generally makes for a longer tail, and usually mitigates against an increment. Remember this, too: averages give you bragging rights, but turnovers give you the bottom-line. We also saw two youngsters breach the R3million mark, and the welcome return of a deep middle market, evidenced in a 33% rise in the median. For Summerhill, we outperformed these numbers by a bit of a stretch, and at R1.6million, we sold the sale’s top filly for the second time in three years. Friday’s early start was probably not one of BSA’s brightest marketing strategies, and the result may have been even better with an evening session to relieve the tedium of two long days in the field, but let’s not spoil a good show with too many woes. It was a solid sale, and the numbers endorsed the upward trend in bloodstock markets the world over.

Strange in these times of global austerity, that the great luxury of owning a thoroughbred has not become exactly that: a luxury. Yet there are parallels in the stock markets too, where quite inexplicably, the Dow, the Dax, the FTSE and the JSE bring new highs both times you read the ticker-tape. Of course, “Q.E” has played its role, and near-zero interest rates in America, Europe, Japan and the rest, have driven cash surpluses into assets. So we need to recall that eventually, inflation is the inevitable consequence of Ben Bernanke’s money-printer, that a rise in interest rates will be just as inevitable, and that some of this cash will eventually find its way back into the money markets.

Meanwhile, horse breeders (in this country at least), will draw solace from the knowledge that the foal crop has been strangled by contraction, that racehorses will be in short supply, and that the lid on our exports is about to be lifted. That will soften the blow any rise in interest rates might deal, especially in this environment, where easier access to international markets will be the game-changer. There are some vital stirrings on the export front, and for a country which has for so long been hamstrung by technical constraints, that, and our annus mirabilis in Dubai, will make 2013 South Africa’s moment.

Speaking of which, I have a sense that the worm is finally turning here in the money capital of the continent, too. Increasingly, there is a feeling in the right quarters, that we should free ourselves of the notion that apartheid and colonialism are the reasons behind our ailments, that we need to get on with the job now, and that besides our problems, we also have a few things to brag about. Of course, you can’t just shrug off 300 years (or was it 3000?) of colonialism and oppression, but it’s surprising how “normal” we’re becoming. Colonialism and apartheid may be what we fight about a lot, but the fact we have something to fight about, is utterly normal.

And not everyone’s fights are as interesting as ours. Australian politics, for example, are a sort of sleeping balm. Argentina’s on the other hand, make ours look like, well, Australia’s. Like us, these two share a sense of community in horses. At the same time, we’re trying to get close to China without upsetting the West. We’re trying to settle our debts with our exports and we’re trying to make the poor less poor. That we argue about how to do it, is perfectly normal.

So why do we beat ourselves up so much? The poor, someone said, will always be with us. And we all have a duty towards them. But South Africa is a glory, nonetheless. We lead, or just about lead, the world in two sporting codes, we have natural resources, mineral, visual and physical, which are beyond comparison. We have a vibrant democracy, our courts uphold the rule of law, the press is free, our banks are stable and our currency still buys something. Our corruption is rotten, but by no means do we hold a monopoly on it.

Could we do better? You bet we can. But time will heal much of what is wrong. Better education, growing awareness and wider perception, will force the pace. It will also force the “delivery” hand of government. The world around us is changing too, and as it recovers, it will take us with it. Already, we see signs of an America busting out of its malaise with a new vigour. Biofuels will reduce our dependence on oil imports, fracking could change our lives unimaginably.

There is a sense here too, that the ANC is being pulled, kicking and wailing, into a world all the more real for its collective presence of Cyril Ramaphosa, Trevor Manuel and Pravin Gordhan. The President himself has become the promoter and protector of the National Development Plan; seeing off the unions and the communists on this score, could bring down Zwelinzima Vavi’s Cosatu career, if the fragmentation among workers hasn’t already done so.

There are those in this town who believe JZ will be true to his original intention of a one-term president, then whip a couple of the most unlikely suspects (Bobby Godsell, Tony Leon?) into his cabinet. And if we don’t get Cyril for some reason, is it so unthinkable that Zuma’s former wife, Nkosazana, might be the right girl for the job? Beats Addis Ababa, for sure.

Summerhill Stud Logo
Summerhill Stud Logo

Enquiries :

Linda Norval +27 (0) 33 263 1081

or email linda@summerhill.co.za

www.summerhill.co.za

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GAME-CHANGER

Cyril Ramaphosa
Cyril Ramaphosa

Cyril Ramaphosa

(Photo : The Times)

CYRIL RAMAPHOSA

“Elected ANC Deputy President”

South Africa’s story is a complex one, socially, politically and economically. Nobody is better placed to understand it than those of us that live in our region, because much of what we are as a society today is reflected in our turbulent past, most of which played itself out in the 19th century battles for ascendency in what is now known as KwaZulu-Natal. When all that was seemingly behind us, and South Africa for the first time embraced the trappings of a constitutional democracy in 1994, it was this country’s turn. The world wanted our nation to work, and we had the biggest chance any country had ever had with Nelson Mandela as our new President. And it did work, for a while at least.

But like most nascent businesses, we seemed to lose our way, and all that early promise washed itself away with a ruling party struggling to come to terms with the fact that they were no longer a liberation movement, but the governing element in Africa’s most advanced country. The ANC has been wracked by division and dissent, and went to their centenary year national congress just last week, amidst fears of even greater polarization than Polokwane had produced in 2007. But just as we’ve managed to do so many times before (remember the Zulu and Boer Wars, the Rinderpest, apartheid, Ge Korsten, Die Antwoord and the cricket test in Perth last month), we appeared to have pulled a rabbit out of the hat, leaving a bewildered country asking “what that was all about?”

One indisputable consequence of the new South Africa has been an emerging prosperity among the black and Asian middle classes, some of it gleaned from the exploitation of patronage and tenders, but the bulk of it through energy and honest endeavour. For racing, we have witnessed the arrival of an entirely new class of owners among the Indian population in particular, though that’s not entirely surprising considering it was India that gave racing the patronage of the Agas Khan. And when it comes to the big days of recent times, there is no sporting event, not a football final, not a rugby World Cup, nothing, that the African elite want to attend more than the Vodacom Durban July; just ask the organisers! That, surely, has to translate itself, sooner or later, into a desire not only to field a football team, but to have a string of ponies, too!

“So what was that all about? Many people are struggling to come to terms with what happened at the ANC’s Mangaung conference last week. The best starting point is to establish the incontestable facts.

The first of these is that in the face of a sustained year of the intense criticism by the twittering classes, Jacob Zuma remains the ANC’s first choice-by a long way-as leader. The second is that the party has shifted decisively back to its traditional centre, rejecting nationalism (even the use of the very word in a resolution was unacceptable) and populism. Julius Malema was the most notable casualty of the Mangaung conference. Far from being the “king maker”, he barely warranted a mention, and his plea to be allowed back into the organisation was ignored. This shift was reinforced by the election of the crafter of the constitution and iconic black economic empowerment businessman, Cyril Ramaphosa, as ANC deputy president. The return of Ramaphosa dramatically alters the trajectory of South African politics.

Prior to the conference, the ANC appeared to be heading into a future of muddled decline under a steadily disintegrating, shambolic populism. It now appears to have decided on its future by placing Ramaphosa in pole position to succeed Zuma. It wants to be seen as a party that is open to business and in touch with its traditional values of inclusivity and human rights. The ascent of Ramaphosa changes the game for the opposition. They have gained ground with the middle classes, who are disillusioned with growing financial burdens, the abuse of state assets for gain and the assault on press freedom under Zuma. But such low-hanging fruit will become harder to harvest with Ramaphosa in the mix. There will no doubt be a sustained effort to taint Ramaphosa by association with the faults of Zuma. This may work in the short term, but ultimately, he will make a more formidable enemy.

This is good for South Africa. Our political debate needs to shift from the mudslinging personality attacks that have become it’s leading feature to a more sober focus on charting the way forward in a competitive world. Economic growth and job creation are the most important goals for this country. They cannot be achieved with a failing education system and an incompetent state. if Ramaphosa is to emerge as the country’s “prime minister,” as has been suggested, he will face a daunting task.

But who would bet against the man who took the ANC and the National Party through the eye of a needle?”

“Extracted from Sunday Times - 23 December 2012”

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HALCYON DAYS

Jacob Zuma displays new Nelson Mandela banknotes
Jacob Zuma displays new Nelson Mandela banknotes

President Jacob Zuma holds up South Africa’s new 50 rand note

bearing Nelson Mandela’s image…

(Photo : 2 Oceans Vibe)

“Be fearful when others are greedy,

and be greedy when others are fearfull.”

Warren Buffett

Mick Goss - Summerhill Stud CEO
Mick Goss - Summerhill Stud CEO

Mick Goss

Summerhill Stud CEOThe 2011 edition of the South African Racing Fact Book has just been published, a labour of love by former Gold Circle chairman, John Bescoby. You don’t have to be a racing aficionado to know that it’s an invaluable piece of work, especially if you’re interested in the economics of the game.

Among the many famous things the world’s greatest investor, Warren Buffett, has said in his 82 years on the best time to be involved in the market is : “Be fearful when others are greedy, and be greedy when others are fearfull,” or words to that effect. If you’re into breeding racehorses, pages 36 and 37 of the Fact Book are a revelation. The tide has gone out on the number of registered breeders, and especially on the number of mares returned (i.e. those reflected as having been bred in the records of the National Horse Racing Authority). Assuming these statistics are reliable, as we’ve been predicting, the broodmare population shrank by some 500 head in 2011 (not quite the 25% the pundits have been professing, but a sizeable number nonetheless). On the basis of a worldwide average of 60% live foals to mares in active service, the total number of foals we may anticipate from the 2012 crop will be of the order of 2800. We all know what happened last time there were less than 3000 foals on the ground.

Breeders had never had it quite so good before, and those who had stock cashed in with both hands, as the demand for racehorses outstripped supply. The number of colourholders has held its own despite the times we live in, unless you are a doomsday prophet, the signs for a bull market in 2014, are up there in technicolor. South African racing has traditionally demanded something approaching 3500 foals a year to sustain its fields, and if that is the fundamental number, the 2012 foal crop will leave us close to a 700 head (or 20%) short of the mark. Imports are becoming increasingly expensive to acquire, not only because the domestic markets in the countries favoured by South Africans (Australia in particular) have already begun their recovery, but also because of Rand weakness (though who knows, now that we have Nelson Mandela’s image on our banknotes, what kind of effect that could have on the Rand)?

All of this has to be seen in the context of our history as a racehorse-producing nation. In the boom years of the 80s and early 90s, there were more than 7000 broodmares in use in South Africa. The foal crop was up there in the vicinity of 5000, and breeders were still making money. The racing operators were enjoying a bit of a bull run, and the prize money to cost ratio was the third best in the world. A maiden victory would keep a horse for 9-10 months, and with a bit of place money, you could break even on livery.

Last week, we penned a piece on the new prosperity of our operators, and we included a speculative line on what that might do to prize money going forward. It seems as if there might be a serendipitous convergence between the shortage of horses in production, and the upward momentum in prize money. You don’t need a doctorate to understand the possibilities.

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THE WORM IS TURNING

Thoroughbred
Thoroughbred

“We have to believe they will find solutions,

and the smart people have already

anticipated the turnaround.”

Mick Goss - Summerhill Stud CEO
Mick Goss - Summerhill Stud CEO

Mick Goss

Summerhill Stud CEOEvery generation likes to claim it’s known the best of times and the worst of times. Those that grew up in the shadow of two world wars and the greatest depression in recorded history, will rightfully lay claim to that title in the 20th century. Certainly, they’re entitled as far as the worst of times is concerned, yet there are strong parallels in what the present generation have had to endure, in particular the sufferings of the last decade in the Middle East, and the present Great Recession.

But if you’re sitting in little old Mooi River, your instincts may be different. Life, and especially in what we do, gets you up in the mornings with a spring in your step. We live in one of the world’s most beautiful places, we work among some of its nicest and most talented people, and we do so with the greatest creature the good Lord ever created.

Besides, there are undoubtedly signs that things are on the move again in the thoroughbred economy, not only locally, but in the racing jurisdictions of the world as well. The British, American and French sales bounced back significantly in the fall of 2011, while Australia has been coming back for two years now, and the Cape Premier Yearling Sale posted an average beyond R400,000, despite the liability of an extra 60 entries. America created nearly a quarter of a million extra jobs during the last quarter, and South Africa did even better relatively, with 180,000. The Rand is firming, and the big companies of the world are thriving, in contrast with the performances of many of their governments.

While it obviously doesn’t apply to every sector, and it is not quite as apparent in the small business sector yet, many multi-nationals are posting record profits, despite their governments, and it seems that that might be a hallmark of the immediate future. Naysayers keep pointing to the bubble in China which they’re sure is on the brink of bursting, and a Europe that is incapable of helping itself. The reality is the Chinese cannot afford for their bubble to burst, and Europe cannot afford a failed Greece. We have to believe they will find solutions, and the smart people have already anticipated the turnaround.

Of more relevance on the home front, the grapevine is delivering encouraging news on the performance of our racing operators. While you can’t put your hand on your heart that all of these things are 100% accurate, the trend is uplifting and the sources are generally reliable. Gold Circle looks to have posted a profit of R10 million in the first five months of operation (before the windfall of the J&B Met), and while it seems the Cape-based arm of their business continues to struggle in the delivery of positives, on the 1st February, it entered a brave new world.

There are too many smart, enterprising people involved in Cape racing these days for it not to succeed, and with the right strategies and a fresh team to guide them, it’s in everybody’s vital interests that they should succeed, which they will. No doubt, they are relieved to be masters of their own destinies now, and we’ve faith in those whose hands will steer the ship.

While information on the performance of public companies is as difficult to access as it is to prize the fruit from an oyster, word is that the international operations of Phumelela have more than recovered the ground they lost when the British decided, after we’d shown them the way, that they were going to disseminate their own racing images. The rumour mill says Phumelela has already exceeded R100 million in its international turnovers, and has well surpassed what they were turning when they held the monopoly on the British rights. This is a tribute to the enterprise of that division, and you’d expect that if in their local operations, Gold Circle is performing as it is said to be, Phumelela must be doing much the same. Both must be accumulating healthy reserves of cash and that’s got to be the best news since baked bread.

All this bodes well for the future of the industry, and especially in promising some relief on the prize money front. If Gold Circle, now limited to its local operations only, is able to maintain its present path, owners of horses (and those associated with them) under their jurisdiction can look forward to a bonanza in the next year to 18 months.

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SOUTH AFRICA : ALL IT SEEMS AND MORE...

South Africa Economy
South Africa Economy

South Africa

(Image : SA Alive / CTS)

“Hou die blink kant bo.”

It is a tribute to the resilience of our country that it has survived both the evil influences of the National Party’s racist philosophy and laws and the incompetence and corruption rife in succeeding ANC administrations writes Stephen Mulholland in The Citizen.

“Many years ago, when apartheid was still firmly entrenched, I addressed a small meeting of the Council on Foreign Relations in New York. After describing the atrocious amorality of the National Party and its policies and the damage these were doing to the country and to the majority of its people, I was asked to address questions from the floor.

Before taking questions I offered to answer two which were almost always posed in regard to SA. The first was usually what the likely outcome will be in what was clearly an unsustainable model.

The second was how long it would take before the country imploded.

My answer to the first question was that, unlike a settled and developed nation in which much can be taken for granted and the future is, if not perfectly predictable, usually a steady continuation of what exists.

For South Africa however, my view in the apartheid era was that the future was open-ended. It could see a racial bloodbath of immense and tragic dimensions following increasing oppression and resultant violent and growing resistance. Or it could be an uneasy, negotiated transition. Or the outcome could be peaceful, multiracial and harmonious. And so on.

With regard to how long the country would last, my answer was that ever since I had been five years old and began to grasp the meaning of words I had heard that SA had five years left.

The prediction was always five years and then it would all be over, a failed state wracked by hunger and conflict, its economy in ruins and its future desperate.

That was 25 years ago and one still hears of the “five years to doomsday”. At 75 this does not trouble me as much as it then did and this week there was room for hope in a circular e-mail from UD Trucks, a local manufacturer owned via Japan in the Swedish Volvo group.

This company points out that we have much about which to be pleased.

For example, South Africa’s debt to GDP ratio is 32% (US 100%, Japan 200% and UK 90%). The World Bank recommends a ratio of 60%.

South Africa sold $1,8 billion worth of cars to the US in 2010, putting us ahead of Sweden and Italy as suppliers to the US market. Car sales are projected to grow 10% in 2011 to 460,000 units. South Africa is ranked 1st out of 139 countries in respect of regulation of security exchanges according to the World Economic Forum competitiveness report 2010-2011.

The South African stock market rose 16,09% in 2010, ranking 8th out of the G-20 nations and ahead of all of the G-7 countries.

The rand was the second-best performing currency against the US dollar between 2007 and 2011, according to Bloomberg’s Currency Scorecard.

The number of tourists visiting South Africa has grown from 3,9-million in 1994 to 11,3-million in 2010. South Africa is ranked among the top five countries in the world in respect of tourism growth (growing at three times the global average).

The percentage of the South African population with access to clean drinking water has increased from 62% in 1994 to 93% in 2011. Access to electricity has increased from 34% in 1994, to 84% in 2011.

As they say in the Free State: Hou die blink kant bo.”

Extract from The Citizen

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Karel Miedema reviews National Yearling Sale 2009

Uncle Tommy
(Photo : Jean Stanley)

karel miedemaKarel Miedema Sporting PostThe world can look in wonder at South Africa’s flagship National Sale, the Emperors Palace National Yearling Sale. True, the sale’s aggregate and average price followed world-wide trends downward, but closer scrutiny tells a remarkable story, writes Karel Miedema for the Sporting Post.

 

“The sale as a whole was down on the 2008 record breaker. Last year 501 lots accumulated a total of R200million, compared to 490 lots for R152million this time round. That’s a drop of R48million. Taking the top 10% of lots by sex for 2009, we find 26 colts selling for R750k or more, totaling R29million.

 

Similarly, 24 fillies sold for R500k or more, totaling R18million. Added together this gives R47million. Last year 40 colts went for R750k or more, and 43 fillies for R500k and up. Together they made for a total of R93million. The difference between these two top 10% totals is R46million – just about the amount by which the sale went down. In other words, the drop in R47million aggregate can be entirely attributed to the pricedrop amongst the top 10% of lots sold.

 

Median prices by sex tell their story, too. The median price is the mid-point between highest and lowest price, and in the case of horse auctions tells a truer story than a straight average would, because the high (extreme) prices have a lesser effect. The median price for colts in 2009 was R250k, down only 9% from R275k in 2008. As was predicted based on what happened at previous yearling sales this year, demand for fillies fell through the floor. The 2009 median for the weaker sex was R200k, down 20% versus the R250k in 2008. The overall median was down 15%, to R220k from R260k last year.

 

Given this background, the conclusion must be that South Africa is still on a high and that pre-sale doomsayers are eating humble pie, indeed. The future looks rosy.

 

Post sale comments from visitors echoed these sentiments. “In the current economic climate the South African National Yearling Sale is without a doubt the best performing thoroughbred sale in the world,’’ said Australian buyer Paul Guy, echoing auctioneer Steve Davis’ earlier assessment that this was his “strongest sale in the last six’’ he’d conducted around the globe.

Team Valor International’s Barry Irwin, on his fifth successive visit, secured eight foals and summed up the event, saying, “The value here is superb, it is a joy to come to this sale and I’ll be booking for next year.’’

 

Barry Irwin, renowned as one of the shrewdest buyers on the planet, described his purchase of Klawervlei Stud’s Lot 587, a daughter of Captain Al from Grade 1 winner Roxanne, as “incredible, because I would have gone to well over R1million for her and paid only R600k.’’ He added: “She’s probably the nicest looking filly I’ve seen. They don’t come better looking than this.’’

 

South Africa’s Champion breeders Summerhill Stud reaped the rewards for their great achievements of the last few years, selling the top-priced colt and filly at the sale. The Kahal colt, Uncle Tommy, a half-brother to Rebel King, was knocked down to Mike Bass for R2.4 million, while Team Valor bought first-season sire Solskjaer’s daughter Matara Garden for R1.5 million.”

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ORMOND FERRARIS : Doyen of South African Trainers

ormond ferraris (heather morkel)Ormond Ferraris
(Photo : Heather Morkel)

“Millionaire’s Row”

It’s a well documented fact that Summerhill was the last of the big farms in South Africa to register it’s first million Rand deal at the sales. Whether that’s a reflection of a lack of marketing finesse, or a sense of treating the market with respect, will forever be a matter of debate. But what is so, is that all of a sudden it’s “raining” millionaires at Summerhill.

We kicked off at the Ready to Run Sale in November, with a ROCK OF GIBRALTAR colt registering R2.2million, a GALILEO filly R1.5million, and a MUHTAFAL colt at R1million, and coupled with Sunday’s R2.4million and R1.5million respectively, that’s five in the space of as many months.

Whether he read our adverts, proclaiming the Summerhill racehorse the Toyota of the South African industry, is difficult to say, but it seems the doyen of our trainers, Ormond Ferraris, must have at least cast his eyes over the ad. A man who, in common with the best of his countrymen, respects excellent quality, unparalleled dependability and outstanding value, as much as any, the attributes for which Toyota has become famous, are exactly what Ormond must have seen in this draft. Signing as he did on Sunday for no fewer than four (25%) of the horses put through the ring. So for us the consolation lies not only in the value he got, but also in where they’re going.

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South African Resilience Dictates National Sales

south african fight (michael nefdt)“…it’s not the size of the dog in the fight, it’s the size of the fight in the dog.”

Emperors Palace National Yearling Sale
“Tommy” Tops the Trade

Readers of the Summerhill Sire’s Brochure last year, will recall the statement “it’s not the size of the dog in the fight, it’s the size of the fight in the dog”, that probably sums up the resilience of South Africans. And if ever you needed evidence of it, you’d have wanted a seat at the ringside at Sunday’s proceedings.

An average price of R321,000 after three hundred Lots had been traded, and an aggregate closing on R80million, tells it’s own story, with every indication the aggregate would sail past the R100million mark by the end of yesterday. Stories of trade 40% down at Sydney’s Easter Sales (running concurrently), might have had most people quivering in their boots. But South Africans, with a history of dealing with adversity in so many different shapes and forms, can always be relied upon to exhibit their standard traits of courage and foresight, and their looking forward rather than behind them. That goes for a number of our overseas adherents too, who make the pilgrimage each year.

National Yearling Sales : What a Sunday!

“BIG SALE DIARIES - Part 1”

As big days go, it doesn’t get much better, especially if you’re in the Summerhill corner. Two Group winners, three Group seconds, and an impressive juvenile in the second all added up to something approaching R600,000 accumulative earnings for the day. It could’ve been better though, as one wag commented, “If only the wind had been blowing our way, and the three seconds had made it home!”

On a day in which fortunes might have been made, if our Australian, French and English friends had kept the faith (but typically deserted us for those raised in “greener” pastures) there were a number of notable performances:

o LABEEB finally came home, notching up a consecutive treble including a double in the Derby and Oaks Trials for the one man who put his hand up very early on, Ormonde Ferraris.

o Charles Laird and Markus Jooste achieved an historic trifecta with a one-two-three in the R1million Horse Chestnut Stakes, only to notch up another graded stakes victory in the next event with Rebel King.

o If your business is selling horses, having a graded stakes winner related to one of your entries on the eve of its appearance in the ring hopefully contributes a little extra to the bottom line, so Rebel King’s swoop in the dying stages of the Senor Santa not only took him another step closer to Champion Sprinter honours, but also added value to his yearling brother Uncle Tommy, who became the sales-topper (first and second sessions) yesterday afternoon – more on that later.

o That’s not the lot though, as Lot 305, Imbongi’s half sister by Solskjaer saw her page significantly lifted this weekend with juvenile Mahubo’s Grade 3 third on debut, and Spring Garland’s magnificent defeat of the nation’s second-rated female runner, She’s On Fire in the time-honoured Gerald Rosenberg Stakes G2.

o Not to be outdone, the evening meeting at Greyville kicked off with a trifecta straightliner for KAHAL, who notched up three in rapid succession.

Another great day at the office….

National Yearling Sale '09 Update

charles laird (heather morkel)Charles Laird at the TBA Sales Complex, Gosforth Park, Johannesburg
(Photo : Heather Morkel)

“AS THINGS STAND, THIS WAS A GOOD RESULT”

Look, let’s not forget, this is only a news flash reflecting just one night’s business, but on the face of things, a horse sale which is only 21,7% off last year’s record highs, given the state of the international economy, has to be a good result.

With international bourses down 40-50% and our own stock market in a 30% retreat, you’d have expected at least a similar outcome at the Emperors Palace National Yearling Sale. But those who tuned in to Alec Hogg’s interview with Summerhill’s Mick Goss on Moneyweb’s business affairs programme last evening, would have been buoyed by the news of the number of “wannabe” buyers parading through the TBA’s sales complex at Gosforth Park, in the days leading into the sale, and his prediction that the “ponies” would outperform the market.

Like the three kings of biblical fame, they’ve come from the UK, the USA, Hong Kong, Australia, France and Singapore, to pay their respects to the cream of South African breeding, and from what we’ve heard, they’ve not been disappointed at what’s on show.

In the end, an average of R306 500 was a pleasing return, especially in the light of the fact there were only three millionaires in the evening to influence matters, and nothing approaching R2million.

Battle of the night, despite a top price of R1,5million, was the right to own the Spectrum half sister to Warm White Night and dual Gold Cup hero, Highland Night, in which the formidable combination of Markus Jooste and Charles Laird finally prevailed at R1,3million.

What is evident thus far, is that the gap between the progeny of the big three sires and those of the next tier, is no longer so glaringly apparent. Emerging sires Kahal, Muhtafal, National Emblem and Captain Al are growing in popularity with every sale, which the Summerhill team has to be delighted with the first showing of Cataloochees (2 fillies at R350k and R210k respectively), while Solskjaer is expected to kickoff in a big way Sunday.

Highlights of Summerhill’s evening were a R450k Kahal, brother to Gold Cup winner, Desert Links, (sold for the late Sheikh Maktoum’s Financial Director Stephen Gill, and Greig and Michelle Muir’s Muhtafal own sister to Alejate, at a cool R425k from the indomitable Michael Azzie.

Click here to listen to Alec Hogg’s interview with Mick Goss

www.tba.co.za : Live Streaming of National Sales

The Emperors Palace National Yearling Sale begins today in an atmosphere of anticipation. The dramatic events on the global economic stage and a general slowing in the local economy has left many analyists wondering how the local Thoroughbred market might fare.

At the TBA Sales Complex there is a cautious optimism among vendors because, as Team Valor’s Barry Irwin says, “this is the best value thoroughbred sale in the world.” With 596 lots on offer, there are some mouth-watering prospects for the astute buyer. Bloodstock South Africa are holding thumbs that buyers are tempted by the progeny of many of South Africa’s, as well as the world’s, top stallions.

The Summerhill team has been working feverishly this past week meeting a steady stream of potential buyers. If you missed it… our draft this year includes progeny from a band of formidable international stallions : Johannesburg, Royal Academy, Oasis Dream and Haafhd. On debut at the sale are the progeny of Solskjaer (brother to champion stayer, Yeats, who was recently awarded a Timeform rating of 128), Cataloochee (the record setting son of Al Mufti), as well as the Summerhill stalwarts Kahal and Muhtafal (sire of Dubai World Cup star, Paris Perfect) and Malhub (Kingmambo’s best racing son at stud).

In an attempt to make the sale more “user friendly”, Bloodstock South Africa have discontinued the contentious green pages and select session. There will also be uninterrupted coverage on Tellytrack (DSTV Channel 232), and for the first time the sale will be streamed live online, starting tonight at 18:30 (South Africa time).

Just log onto www.tba.co.za to follow the action.

Michael Clower reviews Ready To Run Sale 2008

denis and gael evansDenis and Gael Evans
(Photo : Summerhill Stud)

“Inspiration Bucks The Trend”
by Michael Clower
South African Bloodstock News
Issue 6 March 2009

michael clowerMichael Clower South African Bloodstock NewsIn the long history of the world’s bloodstock industry few men have been able to turn the market. The qualities required for this include immense drive, an inspired imagination and a dedicated determination to succeed no matter how insuperable the obstacles appear.

Not many people are blessed with all these attributes, and the bloodstock industry has only a small pool to draw on. A number of its people have tried to buck impossible-looking trends over the years but few have succeeded. However Mick Goss joined the elite band at Gosforth Park on the first Sunday in November.

The Summerhill Stud boss has been the main driving force behind the success of the Emperors Palace Ready To Run Sale since its inception but, with thoroughbred sales round the world reeling under the impact of the global credit crunch, few expected the TBA’s fastest-rising sale to emerge unscathed.

Many were steeling themselves for a 20% drop yet Mick Goss kept up his artillery of relentless promotion as if, like a modern-day Napoleon, he was simply not going to allow defeat to enter his calculations. His boundless enthusiasm paid off with a 34% rise in the average price and a sense of well-being that spread through the country’s studs as if it was manna from heaven.

“The sale was a tribute to many more than myself,” said Mick Goss, attempting to divert the kudos. “It was a grand catalogue of fine horses, prepared by some serious horsemen, and I think the South African racing public deserve credit for their courage and foresight in supporting the sale.”

It was a grand catalogue and there is no doubt that it read a good deal stronger than in previous years. There is still improvement to be made before the overall level reaches that of the National Yearling Sale and, if this can be achieved, there is every reason for the graph to continue to climb.

A new Ready To Run record top price was set when Basil Marcus went to R2,2million for an Australian-bred colt by seven-time Group One winner Rock Of Gibraltar (sire of Eagle Mountain) from a strong American family.

“I saw him at the Summerhill Gallops and also on the farm before that,” said Basil Marcus. “He was the one I wanted to buy. He had everything in the right place, he was very well balanced and he had a beautiful action.”

Basil Marcus was acting for Denis and Gael Evans, Johannesburg-based owners who “have a lot of young horses with me.” Their sale-topper had been purchased eight months earlier for A$75,000 (approximately R500,000) at the Inglis Melbourne Premier Yearling Sale.

As last year, Australian-breds sold well and they accounted for four of the top seven prices. Marlon Aronstam’s two Brazilian imports also fared well.

Oscar Pistorius’ decision to get involved could have far-reaching benefits for racing and breeding. The brilliant athlete bought the Kahal filly Watchful for R200,000 and is involved in the syndicate that purchased the second-highest priced lot, the Galileo filly Insasa, for R1,5million. Mike Azzie will train both.

There is a close correlation between the athletics track and the racetrack and, if either of these two fillies do well, racing will be propelled into the limelight, other stars will see the appeal of owning racehorses and the public will want to go and watch.

RICHARD MAPONYA : Spirit of African Entrepreneurship

richard maponya and shemaghRichard Maponya and Shemagh
(Realtime/Maponya Mall/Summerhill)

AFRICA’S GREATEST ENTREPRENEURS :
SIR RICHARD BRANSON’S ENDORSEMENT

A new book on remarkable achievement has just been released, and interestingly, Richard Branson wrote the foreword. In it, he says “that across Africa, the spirit of entrepreneurship is very much alive, leaving me constantly amazed by the incredible energy and determination and innovation coming from entrepreneurs across the continent”.

Acknowledging Pliny The Elder’s Latin statement : ex Africa semper aliquid novi, (out of Africa there is always something new), the Nigerian born author, Moki Miqura identifies sixteen dynamic and outstandingly daring African men, who’ve built sustainable enterprises which can be benchmarked alongside the best in the world. The author tells us that these men have worked ingeniously within the context of the historical, economic and political climates of their respective countries; manoeuvred their way through hostile business environments, antagonistic governments, repressive systems, personal poverty and even a lack of education, to be counted among some of the world’s most formidable giants of business.

One of these sixteen achievers is South Africa’s Richard Maponya, who against all odds and obstacles presented by the apartheid government, is today one of the most celebrated and respected entrepreneurs in South Africa. Maponya succeeded in achieving many firsts in South Africa. He was the first person to open a dairy shop and milk delivery service in Soweto. He also brought the township its first grocery store which grew into a lucrative chain of eight Soweto-based discount supermarkets, making him (at one time) the single largest employer in Soweto.

In 2007 Richard’s long-lived dream finally came true when he opened Maponya Mall, the country’s first mega-mall to be built in a township. His simple statement on his latest achievement is “Sowetans deserve the best”, and in his recent acquisition of Shemagh (by Malhub out of the Northern Guest mare Dress Code) at November’s Emperor’s Palace Ready To Run Sale, we’d like to think that Richard Maponya, in his own right, deserves the best. Well done, Michael Azzie, for bringing this struggle icon back into the game.

BACK AT THE RANCH

summerhill yearlingsPreparations for the Emperors Palace National Yearling Sales
(Photo : Grant Norval)


“Extract from the Summerhill Stud Client Newsletter”

Raging bushfires in Australia, icy conditions in Europe and the financial melt-down all add up to a lot of tough stuff, yet if you were sitting here and weren’t reading the papers or watching TV, you’d be wondering what all the fuss was about.

We’ve just completed a record Ready To Run Sale, the local economy is still growing, albeit it slowly, our cricketers are on fire, and the Cape Yearling Sale was up almost 10% on average, very much against the international trend. While the chill wind is obviously still going to blow, it seems as if South Africa is sitting a little prettier than most. There are those who might lament the Rand’s 30% depreciation in October, but for exporters and our foreign customers, its music to the ears.

Besides, Imbongi and Art Of War have both ran crackers, the latter victorious by 8,5 lengths on Thursday in Dubai. You never know, but we’re always cogniscent that the Dubai Duty Free (& others) are worth US$5 million each!

So what’s up at the ranch? We’re in the process of weaning one of the best crops of foals we’ve seen, at the same time attending to their micro-chipping (for id purposes). It’s business plan and budget time too, and with our broad management structure, we have every divisional head beavering away at their plans for the year and their departmental sums.

Land preparation for the autumn and winter pastures has just started, and we’re a month into the preparation of a terrific bunch of yearlings for the Emperors Palace National Yearling Sales.

(Click here for the low down)

Interestingly, we’ve sold a number of horses in training and mares off the farm in recent weeks, and there’s been good international interest from Hong Kong, Pakistan (of all places) and Mauritius, alongside solid domestic demand. It seems people are still buying racehorses (either for the revenue or the “fun” dividend) in preference to motor cars, because that segment of the economy has really gone quiet. I should add, the horses are making their money, so there’ve been no giveaways.

(Click here to view what we have left to offer)

Hartford House is “pumping” at the moment, and there’s hardly place at the inn on a weekend well into May, so this is the “early warning” system reminding our friends that the July weekend, our Stallion Day and the KZN Broodmare sale (Thursday 2-8 July) are likely to be swallowed up very soon. I would recommend, if you’re keen to attend the races, Stallion Day, or the Broodmare and Yearling sale that you book soon.

This note comes, as always, with our best wishes from everyone at Summerhill.

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South African business optimism down, but still positive.

earth in hands(Charles Thompson/Barun Patro)

Despite optimism by South Africa’s privately held business sector dropping by more than half from +75% last year to just +35% for 2009, the country has risen up the ranks to become the sixth most optimistic country in the world, according to Grant Thornton’s 2009 International Business Report (IBR), released last week.

In contrast, the report paints a much bleaker picture of the global economy, with optimism among privately held businesses around the world plummeting by 56% in the past 12 months. This contributed to the Grant Thornton IBR international optimism/pessimism barometer recording a negative balance of -16% compared to +40% in 2008 – the first time in the survey’s seven-year history that pessimists have outweighed optimists about the outlook for their economy.

At the +35% optimism level, South Africa moved up from last year’s ninth position among the 36 countries surveyed in the IBR. India (83%) emerged as the world’s most optimistic country this year, followed by Botswana (81%), the Philippines (65%), Brazil (50%) and Armenia (46%).

According to Grant Thornton, in South Africa, “there was an overwhelming consensus that falling consumer demand and the shortage of business credit were the biggest threats to privately held businesses” going into this year. Gauteng (at +40%) and KwaZulu-Natal’s hubs of Durban and Pietermaritzburg (at +39%) emerged as the most optimistic regions in the country, with the Eastern Cape (at +17%) being the least optimistic. Cape Town came in at an optimism level of +33%..

Leonard Brehm National Chairman of Grant Thornton in South Africa said “Their macro-view of the global economic situation explains the overall slump in optimism. While privately held businesses worldwide are preparing for a prolonged and painful downturn real opportunities exist, especially in South Africa”, said Leonard Brehm National Chairman of Grant Thornton in South Africa

Economist Dennis Dykes said “South Africa has been relatively shielded by a healthy banking system as well as the fixed investment boom ahead of the Fifa 2010 World Cup. In addition, the 2010 event should continue to soften the effects of the global crisis, and lower interest rates and oil prices should help a modest recovery in the second half of the year,” said Dykes.

(Extract by Suren Naidoo from The Mercury)

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