Business confidence in South Africa increased slightly in November. This was revealed in a survey published on Wednesday. The increase in confidence reflects an anticipation of improved economic conditions.
The South African Chamber of Business and Commerce (SACCI) said its monthly business confidence index rose to 95.1 in November from 92.9 in October.
South African businesses had taken heart from the fact that the country still had an investment grade sovereign credit rating from Moody’s, despite falling into “junk” status with its peers S&P Global and Fitch, SACCI said.
In its most recent review, S&P downgraded South Africa’s foreign currency debt to the second notch (BB) below investment grade, and local currency debt to the first notch below investment grade BB+, while Fitch left the rating of local and foreign currency debt unchanged at BB+.
SACCI noted that businesses remained optimistic in spite of the economic uncertainty caused by the coronavirus pandemic and the downgrade of South Africa’s credit rating. It said that the index was also supported by the government’s commitment to fiscal consolidation and the improving market sentiment in the global economy.
The Chamber added that the index had been lifted by improved consumer confidence and increased optimism among businesses about the outlook for the South African economy.
Moody’s however offered the country a reprieve, keeping its local and foreign currency debt at Baa3, the lowest investment grade.
“The breather afforded South Africa by Moody’s … leave time for implementing measures (political and policy-wise) that would alleviate fiscal pressures and enhance economic performance,” SACCI said. “The budget of 2018/19 in February 2018 will have to bear this out.”
Ratings agencies have highlighted concerns over the direction of economic policy in South Africa as the government grapples with allegations of corruption swirling around senior officials including President Jacob Zuma.
Zuma denies using his political influence for his personal financial benefit.
Investors and analysts hope that the ruling African National Congress’s conference this month will signal a shift onto a more viable economic policy path as the party braces for a stiff challenge at 2019 general elections.
“Public finance matters and economic growth prospects are important phenomena that have to be attended to urgently,” SACCI said.
It said business sentiment had also been lifted in November by recent data from the revenue service pointing to a positive national trade balance. (via African News Agency)
Westbrooke Now SA’s Largest Section 12J Manager
Westbrooke Alternative Asset Management is now South Africa’s largest Section 12J manager, looking after almost half of the capital invested in S12J funds in the country. Westbrooke has raised approximately R885m in the last two years and according to statistics released by the South African Venture Capital Association, the size of the market is approximately R1.8 billion. There are over 60 registered S12J companies in SA.
Dino Zuccollo, fund manager at Westbrooke Alternative Asset Management says, “On account of stunted economic growth and high levels of volatility in the local and international financial markets, traditional investment strategies are not able to offer a complete investment solution. Consequently, investors have found alternative solutions such as S12J to be increasingly attractive.”
Jonti Osher, fund manager at Westbrooke Alternative Asset Management adds, “S12J is an investment tax incentive which was introduced by the South African Revenue Services under Section 12J of the Income Tax Act in 2009. It wasn’t until 2014, however, when SARS made a number of favourable amendments to the Section 12J legislation, that the industry began to gain traction amongst investment circles. Whilst S12J continues to grow, there is sunset clause that takes effect in 2021, at which point Treasury will review the legislation, which may or may not be extended.”
The intention of S12J is to boost the South African economy by encouraging investment into a range of private companies which meet defined criteria. The incentive gives individuals, companies and trusts the ability to write off 100% of their investment against their taxable income in the year they invest. Therefore, investors can benefit from up to 45% immediate tax relief, thereby reducing the cost of the investment, providing downside protection and enhancing overall returns.
Westbrooke Alternative Asset Management seeks to generate investment returns which are uncorrelated to traditional investment markets. Investments are designed to deliver a simple, investable outcome – predictable, sustainable, risk-managed returns in an increasingly complex fiduciary and legislative environment. Westbrooke Alternative Asset Management’s shareholders and executives are significantly financially invested alongside fellow investors.
Westbrooke Alternative Asset Management focuses on capital preservation, the generation of attractive risk-adjusted returns, (with target after-tax IRRs ranging between 16% and 18% per annum as well as an annual yield on certain investment offerings) and a clearly defined exit mechanism, as its core investment principles. It currently accepts R1 million as the minimum investment amount.
The next round of funding for investment in Westbrooke’s S12J funds closes on 23 February 2018.
Osher concludes, “Westbrooke Alternative Asset Management’s strong working relationship with SARS and leading S12J tax advisors has allowed us to deploy a significant amount of private growth capital into SMEs across South Africa, thereby supporting the business development mandate of Section 12J.”
MTN Signs Partnership with Cisco Jasper to Enable Internet of Things Connectivity for Businesses Throughout South Africa
MTN today announced a partnership with Cisco Jasper to enable their business customers throughout Africa to deliver Internet of Things (IoT) services worldwide.
MTN will be the first mobile operator in South Africa to deploy Cisco Jasper Control Center, the automated connectivity management platform for IoT. The partnership also represents Cisco Jasper’s initial expansion into South Africa.
Mariana Kruger, General Manager for ICT Solutions at MTN Business, says this partnership will entrench MTN’s position in the IoT and connected vehicles space and will give IoT device and vehicle manufacturers the opportunity to leverage MTN’s expansive network. While this solution will initially be rolled out in South Africa, plans are in place to leverage MTN’s data centres across its 22 points of presence across Africa.
“Our business customers in nearly every industry are looking to innovate and transform their businesses by offering connected services,” said Kruger. “The combination of our powerful mobile networks and Cisco Jasper’s leading IoT platform will empower our customers to deliver new connected services that generate recurring revenues, while also enhancing their customers’ experiences. More enterprises globally rely on Cisco Jasper Control Center than any other IoT platform, and we are excited to bring its capabilities to our customers.”
Kruger says MTN is starting to reap the benefits of the substantial investment it has made in its network, and the strategic partnerships it has forged in the IoT space.
“Over the past three years, we have invested substantially in our network and have forged strategic partnerships with leading global players in the IoT space. These interventions have put us in a better position to provide our customers with a distinct customer experience.
The partnership between Cisco Jasper and MTN has several synergies – both companies have the unrivalled capacity and expertise to provide IoT services to enterprise customers. In addition, the technologies that we have invested in give MTN the ability to provide cutting-edge and tailored propositions to our clients, while delivering a secure and fool-proof connection,” concludes Kruger.
MTN sees significant demand for the Control Center platform across all markets, and particularly from the following segments:
- Telematics & Vehicle Diagnostics – Connected Car initiatives enable auto makers worldwide to constantly monitor the performance of their vehicles and proactively address any issues before they cause a problem for drivers. Cisco Jasper has a deep history in the Connected Car market, with 50 of the world’s largest auto brands using Control Center for their Connected Car initiatives.
- Vehicle Tracking – Vehicle connectivity enables a range of vehicle tracking services, from remote tracking to aid in recovery of stolen vehicles to the monitoring of vehicles for better fleet management.
- Building Security and Automation – Connectivity has transformed how we interact with both commercial properties and our homes, making them more efficient, secure and responsive to our needs. The more we value these services, the more pivotal connectivity becomes, which is why many of the world’s largest building security and automation providers rely on the Cisco Jasper platform.
- Logistics – IoT is a critical enabler for optimizing and automating logistics businesses. Cisco Jasper Control Center enables companies to increase productivity and profitability with real-time visibility, automated controls, and remote diagnostics that optimize performance and quickly identify, solve and prevent issues.
- As a global market leader, the Cisco Jasper Control Center platform is the IoT connectivity management platform of choice of over 14,000 enterprises worldwide. Control Center enables these companies to rapidly and efficiently launch, manage and monetize their IoT services, while providing the flexibility for businesses to scale those IoT services worldwide to meet the changing needs and expectations of their customers.
“For more than a decade, Cisco Jasper has been helping enterprises across every industry to enhance their customers’ experiences through connected services,” said Kalle Ward, Managing Director EMEAR, IoT Cloud at Cisco Jasper. “We do this by partnering with the most strategic mobile operators, and by combining the Control Center platform with their mobile networks and expertise, together we help businesses automate and manage the delivery of their IoT services globally. We are excited to partner with MTN and to expand into South Africa to serve this new, strategic market.”
SA’s Vukile Property Fund Acquires Prime Retail Parks In Spain
JSE-listed Vukile Property Fund on Wednesday confirmed that it has wrapped up the acquisition of a further two retail assets in Spain through its Spanish Real Estate Investment Trusts (REIT) subsidiary Castellana Properties Socimi.
In July this year, Vukile announced it had acquired 11 Spanish retail parks for EUR193 million via Castellana. Its latest acquisitions grows the number to 13 retail parks and the total value of the Spanish portfolio to around EUR290 million.
Vukile chief executive Laurence Rapp, said: “From a zero-base six months ago, our Spanish market exposure is now nearing EUR300 million. We are pleased with the good deal flow that Castellana is experiencing and how quickly its presence has been established in Spain’s retail market.”
In its latest transactions, Castellana acquired the 25,500sqm Alameda Park for EUR54.6 million at an initial yield of 6.4 percent, and Pinatar Park for EUR10.7 million at an initial yield of seven percent.
Rapp said that retail parks in Spain were a compelling investment proposition as they have proven to be resilient during the downturn, international brands dominate as tenants, and there is a strong demand for space, certainly in the better shopper catchment areas.
Vukile is a leading internally managed retail REIT with total property assets and related property investments, post this deal, of R21.5 billion. (via African News Agency)