1 year ago

South African Business 2022

  • Text
  • Wwwglobalafricanetworkcom
  • Tourism
  • Global
  • Sector
  • Economy
  • Infrastructure
  • Manufacturing
  • Mining
  • Cape
  • Economic
  • African
Welcome to the 10th edition of the South African Business journal. First published in 2011, the publication has established itself as the premier business and investment guide to South Africa, supported by the website Regular pages cover all the main economic sectors of the South African economy and give a snapshot of each of the country’s provinces. This issue has a focus on Special Economic Zones which are being rolled out across the country with specific economic areas of focus. The importance of the revival of minerals exploration and the significance of onshore and offshore gas discoveries is the subject of another special feature.

OVERVIEW Tourism The

OVERVIEW Tourism The summer of 2021/22 will be vital for the sector. SECTOR INSIGHT The Hospitality Property Fund is now a subsidiary of Tsogo Sun Hotels. Hotel groups such as Sun International survived the Covid-19 lockdown, but only by closing some of its facilities and retrenching more than 2 000 staff. The group’s South African operations improved overall income by 52% for the six months to June 2021, compared to the previous six months, but the total effect of the Covid-19 lockdown over 18 months was estimated by Sun International CEO Anthony Lemming to be a loss of R3.5-billion in ebitda, earnings before interest, taxes, depreciation, and amortisation (Sunday Times). With uncertainty about exactly who could travel to South Africa, occupation rates for the 2021/22 season could not be accurately predicted but everyone agreed that having a good season would be vital for the health of the sector. City Lodge Hotels told the Sunday Times that 60% occupancy rates had been achieved over the Heritage Day long weekend, a signal that domestic tourism was picking up. December bookings at Sun City (pictured) were expected to be better than before the pandemic hit. Tsogo Sun’s Beverly Hills Hotel in KwaZulu-Natal was anticipating no vacancies for December. Hospitality Property Fund Limited delisted from the JSE in 2021 and became a wholly-owned subsidiary of Tsogo Sun Hotels Limited, giving Hospitality shareholders shares in a more liquid stock and the hotel group an expanded property portfolio. Most of Hospitality’s 54 properties (with about 9 000 rooms) were operated by Tsogo Sun. According to John Loos, a property strategist at FNB Commercial Property Finance, an overlooked factor in many analyses of the Covid-19 ONLINE RESOURCES African Business Travel Association: South African National Parks: South African Tourism: Credit: Sun International lockdown has been how technology has shown that some business travel can be avoided altogether. Corporate travel budgets will be cut, and fewer physical conferences will be held, he predicts, which will put the meetings, incentives, conferences and events (MICE) sector under even more pressure. When the Marriott International hotel group closed three of its South African hotels during the Covid-19 lockdown, Tsogo Sun Hotels, which owns a controlling stake in all three hotels, stepped up its commitment by agreeing to bring them into its portfolio, keep them open and run them. A three-billion-year-old microfossil found in the Makhonjwa Mountains in Mpumalanga is thought to be the oldest sign of life on the planet. The Makhonjwa Mountains is now a UNESCO World Heritage Site. Culture and heritage accounts for 40% of world tourism and is one of the fastest-growing subsectors. There are 711 745 people employed in the tourism industry nationally, with road transport (29%), food and beverages (20%) and accommodation (19%) absorbing the largest numbers. The sector contributes 9% to South Africa’s gross domestic product (GDP). ■ SOUTH AFRICAN BUSINESS 2022 74

Banking and financial services 120 years on, Cape Town has a stock exchange again. OVERVIEW Several alternative stock exchanges have opened in South Africa recently, and one of them has moved to Cape Town. Previously known as 4AX, the rebranded bourse has fittingly chosen The Woodstock Exchange (pictured) for its offices. A short-lived exchange opened in 1901 in Cape Town because the Anglo-Boer War made Johannesburg uncomfortable for traders. The Cape Town Stock Exchange, which aims to attract African listings and to take advantage of the Cape’s specialisation in technology, is the only other South African exchange (apart from the JSE) with both equity and debt listing licences. The company announced that it planned to double its market capitalisation by early 2022. At the time of the announcement, the exchange had eight listings and a market capitalisation of just over R7-billion. Of the other new exchanges, Equity Express Securities Exchange (EESE) trades in Black Economic Empowerment (BEE) while ZARX targets companies that are not listed elsewhere. A2X had 56 listings and a market cap of close to R4-trillion in October 2021, when Tiger Brands announced that they would do a secondary listing on the exchange. The JSE is the world’s 19th biggest exchange and nearly 400 companies are listed on the JSE or AltX, the JSE-owned exchange for smaller companies. The launch by Sanlam Investments of a Sustainable Infrastructure Fund is a sign of the times. The South African state has promised a huge infrastructure drive but in the context of climate change caused by the use of fossil fuels, the investment community is increasingly putting emphasis on sustainability. Sanlam Group will invest R6-billion in the fund and aims to attract a further R5-billion from institutional investors. Investments will be made in housing, transport, health, water, waste, communication, conventional energy and renewable energy, a fast-growing sector with enormous potential. Naspers Foundry is one of several investment funds looking for opportunities in the financial sector. Insurance technology is of particular interest, together with credit services and payment systems. ONLINE RESOURCES Financial Sector Conduct Authority: Insurance Institute of South Africa: South African Institute for Chartered Accountants: SECTOR INSIGHT Renewable energy funding is a fast-growing sector. Credit: Kristof Basson Architects Capital Appreciation, which is part-owned by the Public Investment Corporation, is already invested in a software developer, a credit card payment terminal provider and has R500- million available for further investments. African Rainbow Capital has a stake in the investment company and is the owner of TymeBank, which received a banking licence in 2017 and is expanding rapidly. Discovery Bank officially launched in March 2019 and is experiencing rapid growth with deposits of R3.7-billion. Discovery Bank is applying the behavioural model it uses in its health business to reward good financial behaviour. Another relatively new bank is Capitec. Investment holding company PSG has reduced its holding in Capitec Bank from 32% to 4%, earning about R4-billion by selling those shares. ■ 75 SOUTH AFRICAN BUSINESS 2022

Other recent publications by Global Africa Network: