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Release On WOWEB’s Latest Enhancement – Woweb4me

The enhancement to WOWEB is now ready to be rolled out, and this process will be managed by our client relations manager, Nomathemba Khumalo.  Noma can be contacted on Woweb4me is a dashboard-like capability, enabling users to create a customised filter on a single WOWEB-page, alerting them to specific, updated research which impacts on their objectives.  It currently comprises nine data sources from the WOWEB file from which all or a specific combination can be selected. Users will be made aware of relevant updated and new research as and when it is loaded to the site. Each widget includes a search facility for the entire database and the choice is as follows: Latest BEE Certificates shows new BEE certificates or affidavits as they are loaded and includes a history of ratings for each company. Clients are able to filter the reports to their Watchlist companies, and will soon be able to sort the reports by date, company name or rating change. Latest Company Profiles shows new or updated profiles and can be filtered to Watchlist companies only. Companies can be sorted alphabetically or by update date. Latest Industry Reports shows new or updated industry reports, and will soon include a filter to show which reports have been scheduled for update and anticipated delivery date. A search functionality will also be added. Latest Notifiable Changes shows edits, such as director or ownership changes, or other updates, as they are implemented, by the WOW research production line. Clients can filter the notifications to just their watchlist companies and can sort by company name or date of change. Latest TakeOver Talk shows M&A, investment and FDI updates as they are loaded. Updates can be filtered to only show for companies on the clients’ Watchlist. Latest Watchlist Industry Reports is almost identical to Latest Industry Reports, but clients can limit the reports to the industries and/or WOW segments they are following. Latest Siccodes presents new or updated industry reports by the numeric Standard Industrial Classification codes as set out by Stats SA. Clients can filter to the siccodes they are following. Latest WOW Segments  presents new or updated industry reports by the WOW segmentation. Clients can filter to the WOW segments they are following. Latest Country Reports and Snapshots will soon present updated industry reports and economic snapshots as they are uploaded to WOWEB.  Clients will be able to filter the notifications to countries on their watchlist and sort these alphabetically or by date of upload. Please note that Woweb4me is a complimentary enhancement to WOWEB. Clients will be able to sort the widgets in order of priority and exclude those which are not relevant to them. We look forward to receiving guidance from our clients on how to improve the widgets and introduce others that may be useful. Woweb4me is there to summarise the changes that have occurred on our database and to prioritise companies,  industries and countries that are relevant to each client.

Uncertainty And Opportunity

In South Africa’s initial period of lockdown in the month of April, UK investment company, Silchester International increased its stake in Tiger Brands from 3.64% to 15.01% at a cost of R3.9bn. A Saudi Arabian heavy equipment manufacturer, Zahid Tractor & Heavy Machinery, bought 5% of Barloworld for R710m. Significantly both deals were conducted on the open market which is recorded on WOWEB’s TakeOver Talk. This emulates a trend reported in the 2019 World Investment Report, compiled by the United Nations Conference on Trade and Development (Unctad) that FDI flows to South Africa more than doubled to US$5.3bn. The recently published WOW report on Real Estate Activities details the difficulties in rental collection in the current climate and the possible long-term effects on the demand for office accommodation as businesses have learnt to function effectively in the  imposed work from home environment. Several listed property companies announced they are postponing or cancelling dividend payments. However, Paul Olden, of Western Cape town planners Urban Dynamics, points out that “… the conversion of office buildings in the CBDs in Cape Town and in suburbs like Tyger Valley, Claremont and Bellville, where it is difficult to find affordable well located residential accommodation, will present a positive opportunity to restructure apartheid spatial/land use patterns and potentially bring people closer to their work places”. This shift could potentially provide growth opportunity for property developers and those providing services to developers post-lockdown. An observation in the report on Funeral Services and Related Activities is that this sector is well positioned for the near future as a high percentage of South Africa’s population have either formal or informal funeral cover and the sector is characterised by a high level of transformation. In May PwC conducted a survey on the impact of the pandemic with 867 CFOs across 40 countries. Of the 55 CFOs surveyed in nine African countries, 9% predicted an increase in revenue and profits in this time against an overall average of 5%. While 82% of all respondents stated that they are cutting facility and capex spend, only 9% were reducing costs for R&D, and even fewer, at 6%, would be spending less on their customer experience. In these times we need to keep our ears close to the ground, and in a previous communication, I mentioned the introduction of the Woweb4me dashboard, a free upgrade to WOWEB, which enables users to customise and prioritise their data. Tweaks are being implemented after useful feedback from clients who have been testing this facility, and we will be in touch to roll that out to all subscribers in the next few weeks. Who Owns Whom has been very productive under lockdown, as have our clients, as we have seen a material increase in usage of WOWEB across the board, four new subscribers for WOWEB and one for Data Feeds. Our Port Elizabeth research office will slowly return to work over the next three months but in Johannesburg, we will continue to service clients from home for the foreseeable future. We do, however, look forward to physical interaction with you again as soon as conditions allow it. Stay safe and well.

Re-Inventing Tourism

One of South Africa’s best kept secrets is the big and small five game reserve of Mapungubwe which, 1,000 years ago, was the home to a sophisticated African kingdom which traded with Arabia, China and India and where the ancient golden rhino was uncovered.   On an early morning game drive, we had the extraordinary experience of seeing a bushbuck giving birth and witnessed a bask of crocodiles at a waterhole, seemingly oblivious to the ready-made meals all around them. The drive ended at a picnic site complete with a gas ‘skottel’ on which we cooked breakfast at the confluence of the Shashe and Limpopo rivers with magnificent views of neighbouring countries Botswana and Zimbabwe. This is a good choice of a vacation destination, and South Africa has an abundance of such treasures.   Once South Africans get back into a holiday mood after this global pandemic, there is likely to be a demand for ‘physical distancing’ destinations and tour packages. According to the WOW report on Travel and Tourism outbound tourism accounted for R61bn in 2018, of which 71.1% was spent on personal travel and 28.9% on business and professional travel. With the possibility of physical distance restrictions on seat configurations on flights with the inevitable spike in ticket prices and the sliding rand exchange rate, the challenge to the tourism industry is to channel a chunk of that money into the local market.   While the growth of online travel agents and aggregators such Skyscanner and has disrupted the travel value chain by offering consumers direct booking capability, there is likely to be resurgence of the use of travel agents offering specialised physical distancing packages. After all, there is no better holiday advice than from an agent who has visited the destination they are recommending.   SA Tourism has invited the financial services sector to create financial products such as travel “stokvels” that will enable South Africans to save for travel and to make available travel packages more affordable for lower to middle income earners.   According to the WOW report on the Car Rental Industry, established companies such as Avis, Hertz, Bidvest, Europcar, First Car Rental and Thrifty all have established networks in Southern Africa which allows renters to cross into neighbouring countries and leave the vehicle there and fly home.     Another holiday destination which is good for distancing is the 700 caravan parks and campsites in South Africa, and according to the WOW report on the Accommodation Industry (currently being updated) their revenue grew 7.7% in 2017/18 compared with a 1% decline in hotel revenue for the same period. Many of these destinations are well managed and maintained, safe and provide excellent facilities, but many have allowed quality to slide. Owners need to quickly implement upgrades to meet the potential market demand.   International travel and tourism numbers are expected to fall substantially in the first half of 2020 due to coronavirus and the subsequent travel restrictions imposed by most countries. This will negatively affect the car rental industry, which should consider expanding its fleets of camper vans and off-road camping-equipped vehicles. South African holiday makers should shift their holidays destinations from skiing in Italy to limited human contact destinations such as the Drakensberg,

Silver Linings

Gareth Anderson, a 24-year-old school friend of one of my sons, studied brand building and management at Vega and started a business in 2018. He describes his frozen fish home delivery business, called Caught Online, as an e-tailing fishmonger. Since lockdown his daily order book matches his previous monthly totals and Gareth is confident the business will continue to grow after lockdown as shopping habits change. This trend is confirmed by the food retail and wholesale which showed that Pick n Pay’s online shopping service served over two million customers in 2019, a growth of 24% on the previous year, and Woolworths achieved online sales growth of 22.3%. Home deliveries have since soared further as South Africa went into lockdown. This trend may eventually deepen many of the structural challenges facing the industry. Caught Online currently employs seven people in Cape Town and has plans to expand to Johannesburg and Durban. My son completed his business science degree at UCT and his CFA1 last year, but his efforts to find employment in the asset management industry ground to a halt, and he has been employed as Gareth’s despatch manager, taking the head count to eight. The cargo handling report  states that only companies in the logistics supply line that are essential to the production and transportation of food, basic goods and medical supplies will remain open, but a possible spike in the sector will come after lockdown as retailers replenish stocks. The tourism and leisure sectors have been among the worst hit by the lockdown and the health and beauty spa report states that as the industry comes into direct close contact with the public, it is experiencing significant losses which may persist after the virus is contained as customers may continue to exercise social distancing. In a similar boat is the events management sector. Amanda Kotze-Nhlapo, chief convention bureau officer of the South African National Conventions Bureau, said South Africa hosts approximately 211,000 regional, national and international meetings, conferences and exhibitions annually and that this number is reasonably stable year-on-year. Until now. The paper and packing sector is less affected as its products are used to package essential goods and a number of its own products are essential and have been hoarded, such as toilet paper. This sector can look forward to the long term trend created by the anti-plastic lobby, which is rapidly gaining momentum, with rising demand for paper bags, paper beverage cartons, straws and paper-based packaging. The national gambling report last published in December 2019 has been re-published this month with an update of the effect of the covid19 virus on the industry. We are about to introduce a free upgrade to WOWEB, with a Woweb4me dashboard to enable users to create a customised dashboard to have selected data ‘pushed’ at them. I will provide detail on that with my next communication.