Indholdsfortegnelse for 1/21/2021 i Finweek - English

i found myself sitting with a cup of coffee in one hand and a cigarette in the other one morning during the first week of a new year, with my two loyal mutts at my side, deep in thought about what’s happening in this world of ours. (I have found that it’s always good to sit and think about this world and her tribulations early in the morning while the day is still full of hope.) Then, suddenly, my cellphone woke me from my pensive state, and I saw it’s a 010 number calling and I am filled with trepidation: Is someone in trouble? No, the voice on the other side is friendly and addresses me in English. It’s still too early for my brain to converse in any of…

what came out of the 2020 ashes were success is human capital. Now that the feasibility of working at home has been proven, it will be tough for companies to walk things back to pre-pandemic times. Over 2021, millions of companies will begin reengineering everything from physical offices to digital infrastructure, and this has broad implications for the economy and our culture. It seems like only recently that the term “ESG” (environmental, social and governance) gained mainstream traction in the investment community. In a short amount of time though, the trend has blossomed into a full-blown societal shift. In 2020, investors piled a record $27.7bn of money into exchange-traded funds (ETFs) traded in US markets, and that momentum only appears to be growing. At the time of writing, China, the…

of the more than two dozen South African real estate investment trusts (REITs) on the JSE, only two – Indluplace and Transcend Residential Property Fund – offer investors specific exposure to residential property. Both focus on the affordable residential rental segment. Institutional investors have largely ignored the residential sector. As an asset class, residential makes up under 3% of the total listed property sector in South Africa. But with Covid-19 putting pressure on office and retail sectors as South Africans prioritise health by retreating to the safety of their homes, the residential asset class could be a more tempting investment alternative. “The impact of Covid-19 has shown that these residential REITs have been somewhat more defensive than the traditional property subsectors,” Nesi Chetty, senior fund manager at Stanlib, tells finweek.…

BHP’s share price surged at the beginning of the year – defying two key resistance trendlines. It seems shareholders are pleased with BHP’s investment in a US-based startup company, Boston Metals, to develop less polluting ways of producing steel. Steel is not only the backbone of the industrial world but is also a lucrative business and is responsible for more than 8% of global carbon emissions. Each year 1.9bn tonnes is produced to build anything from transportation systems and skyscrapers to infrastructure. BHP’s investment will be funded under the $400m climate investment programme, which was set up last year with the purpose of reducing so-called scope 1, 2 and 3 emissions. Last month BHP signed a memorandum of understanding with world-leading steel producer China Baowu, with the intention to invest…

ALTRON Is Netstar next? Altron is an interesting offering with serious potential for unlocking value. The Bytes UK deal richly rewarded shareholders and Netstar is a potential next demerger and listing. The Netstar business is about the same size and profitability as Mix Telematics while Cartrack is about 50% larger. Yet, Altron has a market cap of some R4.4bn, Mix Telematics is around R4.8bn and Cartrack (after the delisting announcement) is worth just over R15bn. So, it is very possible that a Netstar listed on its own would be as large as the whole Altron and we could possibly expect news on this front in the next few months. METROFILE The rumours are true The initial delisting offer for Metrofile* was in December 2019 at 330c per share, but the…

the South African Reserve Bank (SARB) is under both political and social pressure to also target economic growth, which is sometimes accompanied by a demand for “full employment”. Arguably, the economically devastating effects of the Covid-19 pandemic cannot be offset by further reductions in the repo rate, which goes some way to explaining why pressure for changes in, or enhancements to, the SARB’s mandate receded toward the end of 2020. Similarly, calls for the SARB to lose its independence have also receded in the last few months. The current year-on-year change in Consumer Price Index (CPI), as published by Statistics SA in the first week of December for the November month-end, is 3.2%, within the SARB’s target range but close to the bottom. Barring a handful of breaches of both…

starting his career at Discovery back in 1999, Riaan van Reenen took the reins of the company’s life insurance division as CEO a year ago. Little did anyone back then know how the outbreak of a novel coronavirus in the city of Wuhan in China will spread across the planet and grind economies to a halt. Also unbeknownst back then was the death toll – which surged to almost 2m people at the time of writing from an infected population of 90m, according to Johns Hopkins University data – that would rattle life insurers. In SA, the infected population has climbed to more than 1.2m people whilst more than 34 000 have lost their lives, data from the national health department shows. In SA, the infected population has climbed to…

In December, BMW Group SA bid farewell to CEO Tim Abbott. Under Abbott’s watch BMW’s Rosslyn plant was transformed for production of the BMW X3, a training academy was built, and BMW’s Lifestyle Park and off-road training experience facility was constructed in Waterfall, Midrand. During Abbott’s tenure, BMW SA also partnered with Bio2Watt to bring renewable energy to its Rosslyn plant. Bio2Watt now provides 50% of the plant’s energy requirements. Abbott’s enthusiasm for conservation also saw BMW SA partnering with the Rhino Orphanage. It’s a passion he will continue to pursue, he tells finweek. After 18 years abroad, Peter van Binsbergen has returned home to South Africa to assume responsibility as new CEO of BMW Group South Africa and sub-Saharan Africa.…

IT security policies • Does the company have a privacy policy?• Is the acceptable use of IT equipment defined in a policy (password guidelines)?• Does the company have an information security policy defined?• Are there confidentiality agreements between the company and third-party vendors, contractors, and suppliers?• Do all the computers and servers connected to the network have some anti-virus software installed?• Are all connected devices updated and the latest security patch updates installed? Internet and network security • Does the company have a firewall with intrusion detection enabled on all incoming web connections?• Does the company use VPN (virtual private network) for remote connections?• Does the company use the latest wireless security protocol such as WPA2 personal or enterprise for wireless or wi-fi connections? Privacy or sensitive information • Is…

historians are good forecasters. They are good not because they possess some original insight into the future but because they are smart in their choice of time horizon: instead of speculating about life over the next few months, they prefer to predict the distant future. It buys them more degrees of freedom and less oversight. This is because humans tend to overestimate change in the short term but vastly underestimate change in the long run. So, taking a leaf out of the historian’s playbook, let me try my hand not at predicting where we will be at the end of 2021, but rather the world of 2030. What could happen in ten years? Space travel, for one. SpaceX will be the world’s largest company in 2030, rivalled by Amazon’s space…

“WE HAVE PERMANENTLY SUSPENDED THE ACCOUNT.” —Twitter stated that it has permanently banned Donald Trump’s account from its platform, citing the risk of the US president using the platform to incite further violence, following the storming of Capitol Hill by his supporters. “Twitter was a political tool that had helped get him elected and a digital howitzer that he relished firing,” wrote The New York Times last year, in a piece on how Trump reshaped the presidency with tweets. Other online platforms that have outright removed or restricted Trump’s accounts include Reddit, Facebook, Instagram, Snapchat and TikTok, among others. “Many of these things are unaffordable.” – Dr Azar Jammine, Econometrix director and chief economist, responding to President Cyril Ramaphosa’s comment in his address of the ANC’s January 8 statement that…

the much-heralded African Continental Free Trade Area (AfCFTA) officially became operational on 1 January this year, with some fanfare. African countries, at least theoretically, began trading under the more favourable terms of the treaty on that day, marking the start of a new trading dispensation that should eventually create an immense single market of 54 countries, some 1.3bn people and a combined GDP of around $3.4tr. Of the African Union’s (AU’s) 55 member states, only the reclusive nation of Eritrea in the Horn of Africa has not signed the AfCFTA and 34 countries have so far ratified it, a necessary step to implementation. The clock is now ticking for countries, basically, to eliminate tariffs on 90% of goods over five years (ten years for least developed countries or LDCs) and…

Fund manager insights: At the inception of global lockdowns intended to curb the rapid spread of the coronavirus in the first quarter of 2020, Intel’s CEO Bob Swan penned a letter to the multinational tech company’s customers, saying “we are witnessing what will surely be remembered as a historic deployment of remote work and digital access to services across every domain”. Throughout 2020, a multiplicity of data continuously indicated that the world had leaped years forward in consumer and business digital adoption, which was also witnessed in the overperformance of tech stocks. The Nasdaq Composite Index, home to many of the US’s biggest tech stocks, invariably outperformed its peers. According to the Wall Street Journal, the benchmark’s gains totalled 39% for 2020. Sygnia Asset Management’s 4th Industrial Revolution (4IR) Global…

richemont is the world’s second-largest luxury goods group after LVMH. Though Richemont has maintained its long-term bull channel, it was volatile for the past three years – forming a pattern known as a symmetrical triangle. Outlook: Richemont’s share price has breached the upper slope of the symmetrical triangle which it had formed within its long-term bull channel. With online and e-commerce growth accelerated by the Covid-19 pandemic, Richemont’s executive chairman and controlling shareholder Johann Rupert is looking to be the leader in the field – hence teaming up with Farfetch and China’s Alibaba. On the charts: Richemont is approaching the upper slope of its long-term bull channel. Because it has failed to breach that channel a few times before, further upside may be limited. If so, Richemont’s share price could…

one of the benefits of lockdown for me was more time to read books, and even though I read more fiction than usual, I also got in several rereads of my favourites and a few new books. One I ended the year off with was The Smart Money Method by Stephen Clapham. It is one of those books on how to be your own stock picker and often they’re not really worth the time. But this one had several gems that made it worth the price and time spent reading. That said, for the average private investor the overall strategy is frankly too much for us to handle in terms of time and resources required. But it still made me smarter and for those wanting to get into the professional…

as I write this, President Cyril Ramaphosa has moved the country into an adjusted level-3 lockdown with alcohol sales and onsite consumption thereof banned, a longer curfew and limits on gatherings including at restaurants, gyms, casinos and so forth. This is coupled with the second surge of coronavirus cases that has fast become a global event and larger than the first, even as authorities have started to roll out vaccines. This is likely to be the trend for 2021 locally and globally. We’ll move between different lockdown levels, although I think that level 4 or 5 hard lockdowns are unlikely. This is due to the first vaccines being expected in South Africa in January for healthcare workers but a much longer wait for the general population. Even developed economies are…

if there is one thing the coronavirus pandemic showed us last year, it is that different regions’ economies reacted differently to the fallout. Now as regional comparison of investment destinations is dangerous in our globalised world where goods and even services can be ‘shipped’ or sold almost anywhere in the world, people do tend to have a top-down approach when they discuss offshore investments. With countries’ differing internal laws and regulations pertaining to anything from taxes to the way in which goods are manufactured, regional outlooks will remain of key interest to investors until worldwide uniform rules exist and are implemented. In the main story of our cover package, Petri Redelinghuys looked at some of the major themes expected this year. We will now turn to some regional outlooks for…

The swift shift to service more clients digitally because of the coronavirus pandemic, has brought the role of human financial advice into the spotlight. Will robo-advice, underlain by artificial intelligence, be one of the enduring consequences of the pandemic? Or will people’s need to interact with other people trump or slow down this trend? It’s a question of complexity. More affluent customers’ idiosyncratic needs will continue to be addressed by human financial advisers, although the latter’s administrative burden will likely be lessened using technology. “The Covid-19 pandemic has accelerated the digitisation of financial advice and we have invested heavily into that space,” says Riaan van Reenen, CEO of Discovery Life. These investments include, among others, quotes processed by artificial intelligence and virtual underwriting. The latter also makes it possible for…

In December, Global NCAP and the Automobile Association of South Africa (AA) conducted the fourth round of #SaferCarsForAfrica crash tests. Three models were tested – the Steed 5 four-door pick-up from Chinese manufacturer Great Wall Motors (GWM); the Haval H1 five-door SUV (also built in China); and the five-door compact Renault Kwid, built in India. All gave serious cause for concern with poor levels of adult and child protection. Alarmingly, the zero-rated GWM Steed 5 demonstrated a high probability of life-threatening injury. It offers no safety features – no airbags, no ISOFIX (child seat anchorage) or anti-lock braking system (ABS) and its bodyshell integrity is rated as unstable. In late 2018, during the second round of crash tests, the SA-built Nissan NP300 Hardbody achieved a zero-star rating after the vehicle…

Stop the spread! This issue’s isiZulu phrase is abantu abadala. It means “grownups” or “elders”. Even if you are a grownup (umuntu omdala), you still refer to your elders as abantu abadala. The key words are abantu (people) and abadala (who are old). Umuntu omdala is the singular. In the time of fake news, abantu abadala just forward all manner of stuff to family WhatsApp groups without fact-checking it. I guess they are from a more honest time so they cannot wrap their heads around the fact that people would spend time putting together fake info. Okay, maybe they’re not from such an honest time because it’s they who get caught out lying on Utatakho – the original fake news debunker. uTatakho is a TV show involving paternity tests that…

there is a threat to the ANC’s 26-year grip on power, but this danger does not emanate from its political foes. The threat comes from rapid urbanisation and this formidable rival already sent a strong message to the ruling party when it lost the control of three metropoles during the 2016 local government elections. Throughout South Africa, thousands of poor, unemployed people are deserting their villages to seek greener pastures in major cities. These migrants leave their villages deeply in love with the ANC, only to relocate to squalid squatter camps, where the resentment for their beloved organisation is fomented. In their villages, these migrants never engaged in service delivery protests despite being subjected to unfulfilled promises of rural economic development so often woven in the lexicon of sweet-talking politicians.…

gold is a disaster metal. In other words, its price improves when life becomes more difficult for human beings. This seems a time-honoured fact of gold’s reputation as “a store of wealth” – a well-known characteristic behind the logic for owning Krugerrands, for instance. Consequently, the metal has had a pretty good pandemic. The gold price pushed through $2 000 an ounce in August and is forecast to do the same again this year, possibly assisted by renewed stimulus once President Joe Biden takes the reins in the US. Less known, however, is how Covid-19 is helping the gold price in a more direct, industrial way. According to legendary gold bull, Sprott Asset Management, a Canadian firm, precious metals in medical instruments, which comprises between 3% to 5% of overall…

what makes a company competitive? Big data, innovative marketing, slick apps, and the lowest prices are all right up there. But the single biggest competitive advantage your company has is your people and the collective culture they create. Why is culture so important? It’s simple: it’s the one thing that truly makes you stand out as a company. It’s what makes your people bounce out of bed in the mornings, embrace innovation and get closer to your customers. More importantly, it drives real company value. We estimate that creating a positive company culture at King Price has contributed directly to a combined rise of more than 50% in shareholder value in recent years. King Price’s culture has become something of a talking point in an industry previously known for its…

The drought of a few years ago really hurt the farming industry, but the return of the rain has got the industry back on a solid footing and a strong harvest in 2020 is expected to be followed by an even stronger harvest in 2021. This boost in the crop will directly benefit farmers due to higher output and in some parts, such as maize, we’re seeing an oddity as prices are not falling even as record crops are expected, giving some farmers a double win. This bumper season will see increased spending from farmers and Kaap Agri, operating in the wheat and citrus areas of the Western Cape, should benefit significantly. Kaap Agri is at its core a retail business with a fuel division (which is doing poorly) and…

tesla was included in the S&P 500 Index in December last year. The share showed an astronomical return up to and including the day before its inclusion, which came into effect on 21 December. Since then the share has increased in value by a further 9%. It has therefore increased in value almost sevenfold since the beginning of last year. Since being included in the S&P 500 in December last year, the share has increased in value by 9%. What does inclusion in this index mean for a share, and is it worth it if there is this kind of opportunity to increase your exposure to the share? Do bear in mind that Tesla trades in the automotive market segment as well as in energy generation and storage. The automotive…

investors are going to face difficult decisions in 2021 judging by the analyses and predictions of economists, investment gurus and others who traditionally have their say in January. Is there a boom period ahead for the world economy when business returns to “normal” at the end of the coronavirus pandemic and when the pent-up demand is released? Or is the recovery going to be weak despite the large-scale money creation by authorities? In the US alone, 25% of all dollars were created over the past nine months. The expectation is that the new Biden administration will continue with the plenty-of-money policy to avert a serious recession. As one commentator put it: The US doesn’t want to go through more recessions. Since Alan Greenspan, the former chairman of the US Federal…

for over 100 years, the Johannesburg Stock Exchange (JSE) operated as the sole exchange in South Africa, except for a few competitors over the years that either went bust (the Union Exchange in 1951) or got acquired by the JSE (the SA Futures Exchange in 2001), thereby cementing its de facto monopoly on both primary and secondary capital markets across a range of securities, spanning equities, derivatives, and debt markets. Brokers have therefore predominantly looked to the JSE for the best possible result for clients when trading in securities on behalf of those clients. But the JSE’s monopoly has since been challenged and disrupted again in recent times with the arrival of new competitor exchanges such as A2X Markets, 4AX, ZARX and the Equity Express Securities Exchange (EESE). This increase…

as a hopefully better 2021 dawns upon South Africans, cybercriminals, however, will continue to try and liberate individuals from their money and personal data. South Africa has the third-highest number of cybercrime victims in the world and loses around R2.5bn per year to cybercrime. The main reason for this shocking figure is that SA end-users and businesses, especially small businesses, are “incredibly naïve”, says Professor Basie von Solms, director at the Centre for Cyber Security at the University of Johannesburg. His statement is echoed in a report by iDefense, an Accenture security company, which notes that SA internet users are “inexperienced and less technically alert” than users in other countries. SA has also been slow to adopt cybercrime legislation and lacks investment in cybersecurity. According to iDefense analysts, cybercriminals consider…