BUSINESS UPDATE News &
BUSINESS UPDATE News & snippets Industry insights from the past quarter SA HOUSEHOLDS FACING HIGH FINANCIAL STRESS A staggering yet understandable 58% of households across South Africa are facing overwhelming financial stress as the Covid-19 crisis knocks savings and raises debt levels, according to the latest Old Mutual Savings & Investment Monitor (OMSIM). Just over half of those surveyed are earning less than they were at the end of February 2020, while 40% of those currently employed only have enough funds to survive for one month or less should they lose their jobs. The levels of dependency have also grown. In 2015 those with other adult dependents (excluding spouse/partner) was at 35%. This year it spiked at 52%. Lynette Nicholson, Head of Research and Insights at Old Mutual, says: “A very alarming consequence of the financial pressures South African households are experiencing is that just over 50% are currently dipping into their savings just to make ends meet, 37% have fallen behind on paying household bills and 23% have cashed in an investment policy.” SME WARRIOR ENTREPRENEUR ACADEMY Shani Naidoo, director of SME Warrior (Pty) Ltd, launches the SME Warrior Entrepreneur Academy in September 2020, an online learning and development platform for entrepreneurs and business owners. The academy consists of three schools: School of Legal, School of Business, Financial Literacy and Entrepreneurship and the School of People Performance and Improvement Intervention. “Our educational indoctrination system is at the root cause of so many business failures and the demise of entrepreneurship as we know it. We are being taught using old methods in a new world, expecting to succeed with high expectations. Learning material designed for the agile and purposeful entrepreneur of the future, SME Warrior will change lives and businesses alike forever,” says Naidoo. www.nemesisaccounting.co.za Perfect, pure energy “LPGas is an exceptional energy source, especially in areas where there are electricity supply challenges. It’s a portable energy solution which can alleviate energy poverty,” says LPGSA Acting Managing Director Nirvan Brijlal. This clean-burning and efficient fuel is primarily used for cooking, space and water heating in South Africa and has over 1000 applications, but importantly it also plays a role in helping to reduce indoor and outdoor air pollution. “It is extremely important that you make use of registered professionals to perform the installation and maintenance of LPG appliances and cylinders,” adds Brijlal. For more information on LPGas, visit www.lpgas.co.za SA FACES A TWO-YEAR JOURNEY TO RECOVERY Recovery from the coronavirus-induced economic and financial meltdown could take some two years, according to Prescient Investment Management’s research and baseline forecast. “The world is grappling with the worst plunge in economic output in living memory,” says Prescient Head of Asset Allocation, Bastian Teichgreeber. “The coronavirus pandemic and the lockdowns to contain it affect both supply and demand in the various sectors of the economy in unusual and different ways.” After making new all-time highs as late as mid-February 2020, equity markets around the globe made headlines for the record pace at which they fell shortly after as a result of the global spread of the Covid-19 pandemic. The price declines have been indiscriminate, with equities, listed property, bonds, credit, preference shares, inflation-linked bonds (ILBs), income assets and the rand selling off in lockstep. Correlations moved to highs we have never seen before. During April and early May, however, we saw a steep recovery, with markets posting record returns. The question everyone is asking is: How long will it take to return to the pre-corona GDP peak once the economy has hit bottom? Our base case, says Teichgreeber, is a U-shaped recovery in which losses incurred in the first two quarters of 2020 would be recovered within two years. “This might sound pessimistic to some and optimistic to others. The risks to our view are significant on the up and the downside.” 6 | www.opportunityonline.co.za
PIC: spotongmag.co.za R1-BILLION FOR TOWNSHIP AND RURAL ECONOMY The Black Business Council (BBC) and Ubank Limited signed a historic partnership agreement in May 2020 to establish an R1-billion fund for township and rural economy revitalisation. The fund will be made available to BBC members and other SMMEs to the value of R250-million per annum over the next five years, targeted at supporting township and rural black business ventures, entrepreneurship and start-up companies. The fund will focus mainly on the IT and digitalisation, manufacturing, agriculture and agri-processing, retail, infrastructure and tourism sectors. www.blackbusinesscouncil.africa DEMAND FOR HOME DELIVERY SET TO INCREASE South African consumers are becoming more reliant on home delivery services due to social distancing efforts. “Businesses will have to gear up to provide home delivery, or beef up existing fleets, as it is expected to play a crucial role in the coming months,” says Derick de Vries, Head of Fleet Management at Standard Bank Group (right). “The new normal is digital, the events of the last month have proved this. For businesses to remain viable going forward, they will need an online extension of their business, where consumers can view and purchase products, and a fleet of vehicles to carry out deliveries. These systems, which some companies may already have in place, should then be adapted for the current environment. “The evolution of technology in the industry means that fleet managers can access customised, in-depth information on a regular, and in certain instances, real-time basis, via online platforms,” explains De Vries. “These include daily, weekly and monthly reports on fuel cost data, and the ability to use predictive modelling for the outcome of variances to their fleet and operational data.” Standard Bank acquired a 40% stake in Payment24 to support fleet owners with digital technology solutions that work to eliminate risk and inefficiencies. The platform aims to eliminate the hassle of monitoring and controlling fleet fuelling transactions using real-time, cardless RFID, mobile and cloud technologies. Further to that, Standard Bank offers a fleet management card, issued per vehicle rather than driver, which offers convenience in paying for, monitoring and controlling vehicle running costs. This also helps facilitate savings on diesel with several oil company partnerships to choose from. pull to come info to come pull to come info to come www.opportunityonline.co.za | 7
