The Covid app is safer than most, says experts

The South African government has launched a new contact tracing app called Covid Alert SA.

South African citizens are suspicious of the app’s (and the government’s) intentions, but experts have said that the app in perfectly safe when it comes to privacy concerns. It asks for less information than most popular apps, such as Facebook, Uber and Gmail.

Professor Preiser, head of Medical Virology at Stellenbosch University, says “Within the limitations that these things may have, if a sufficient number of people use it, it will help.”

Emma Sadleir, founder and CEO of The Digital Law Company and a local privacy expert, says:
“The manual methods – although helpful – are quickly overwhelmed. Let’s use this amazing tech that’s available to us. There is no reason to be suspicious. Come and contact me if you find out that your information has been misused, I’ll take the hit.I really do think that people should download this Covid Alert SA app. I think it’s a good step because we all want to get back to normal life and this is a step towards that.”

How does it work?

The app will ask for a few permissions upon installation. These include Bluetooth access as well as mobile data access. It does not ask for GPS permissions, which means that it won’t collect geolocation data at all.

It uses something called low-frequency Bluetooth protocol, which means that it won’t drain your battery and works on the lower end of the Bluetooth spectrum. This Bluetooth access is used to ping nearby devices (that also have the app installed) in public places. It then collects anonymised IDs from each nearby device through Bluetooth and stores them directly on your device.

If you contract Covid-19 and you record a positive case in the app, it will only now connect via a mobile network (it has been zero-rated by networks, so you won’t pay for this data/airtime) and send all of the user IDs picked up at the store a few days earlier than they may have come into contact with a positive case.

What type of information does it collect?

  • The app does not require a user sign-up
  • There is no Google login, Apple ID, ReCaptcha or password
  • The app was built on Google and Apple’s exposure notification API, which is the same as used in the rest of the world
  • Anonymised IDs are generated when you’re in close proximity of other smartphones
  • It doesn’t collect phone numbers, ID numbers, names, addresses or even Google account information
  • Developers have had to adhere to both Google’s and Apple’s security protocols for it to be made available to the general public while using the tech firm’s technology

Citizens are encouraged to download the app and help to track the spread of Covid-19. To do so, click here.

Image credit: The South African

Anonymous ZA levels accusations at MTI

By Jan Vermeulen for MyBroadband

A hacker collective calling itself Anonymous ZA has released explosive details about Mirror Trading International (MTI), stating that at least R4-billion in bitcoin has flowed through the scheme.

In response, MTI told MyBroadband the information stems from private member data that was illegally obtained and that it is “inaccurate at best”.

Mirror Trading International is a South African registered company offering Forex trading services by using an automated system to trade with the trading pool on behalf of its members.

Johann Steynberg is the CEO and founder of MTI, which focuses on Bitcoin trading and promising members a “truly passive income”.

According to MTI, it has over 90 000 active members in 177 countries, and its numbers are growing daily.

MTI made headlines recently after the Financial Sector Conduct Authority (FSCA) said it was investigating the company.

The FSCA said the current business model of MTI requires it to be in possession of a financial service provider licence.

“MTI has informed us that they accept clients’ funds in the form of Bitcoin, pool the funds into one trading account on a forex derivate trading platform, and conduct high-frequency trading through the utilisation of a bot,” the FSCA said.

If this is being done as described, then this amounts to financial services, hence the licence requirement.

However, the FSCA has a much greater concern about MTI’s activities.

The company claims to have more than R2.9 billion in clients’ funds in trading accounts, but the FSCA has not been able to conclusively confirm that the funds exist.

“Moreover, the returns on the investments claimed by MTI seems far-fetched and unrealistic,” the FSCA said.

At the time, MTI said that its bot-trading is able to generate consistent profits of an average of 10% per month. More recently it said it has seen an average return of 0.5% per day.

The FSCA recommended that MTI clients request refunds into their own accounts as soon as possible.

The Texas State Securities Board has also issued an emergency cease-and-desist order against MTI and accused it of perpetrating fraud through an illegal international multilevel marketing programme.

Canada’s Autorité des Marchés Financiers (AMF) has placed MTI on its list of illegal online platforms, issuing a warning that MTI illegally solicits investors.

Anonymous ZA publishes information about MTI
Anonymous ZA has published financial information about MTI online based on data collected through MTI’s members portal – mymticlub.com.

According to Anonymous ZA, it discovered glaring security vulnerabilities in the online systems of MTI, which it exploited to extract information about the inner workings of the scheme.

Anonymous ZA said the vulnerability that exposed MTI’s “back office” system was a lack of basic authentication.

Any registered member who is logged into the system could view the information of any other member’s account by simply changing a parameter in the URL.

“All data was acquired using simple enumeration and scraping techniques on the mymticlub.com site,” stated Anonymous ZA.

“No hacks were performed because the lack of basic security did not require it. Just incrementing an id=? parameter on various URLs provided all the data that you see here.”

Using this weakness, it was able to glean detailed information about MTI’s system and see the full names, usernames, e-mail addresses, bitcoin balances, and earnings linked to every account.

Anonymous ZA then published an anonymised copy of the data, which was current as of 14 September 2020, on a dark web site called MTILeaks.

It said the MTI database shows the company has handled over 22,984 bitcoin in member deposits, amounting to over R4 billion.

The data shows that members have withdrawn nearly 15,653 bitcoin (close to R2.9 billion), which means the scheme should still have at least 7,331 bitcoin (over R1.3 billion) of members’ capital in its accounts.

However, the data also shows that the scheme has allocated almost 9,916 bitcoin (over R1.8 billion) to members in interest and bonuses.

This means that MTI must have a minimum of 17,247 bitcoin (over R3.1 billion) to cover the remaining deposits and earnings of all members who have not yet been withdrawn from the scheme.

MyBroadband asked MTI CEO Johann Steynberg if the company has that much liquidity and if he could provide MTI’s bitcoin wallet addresses to prove that the company has the assets to cover its obligations.

Steynberg did not answer the question in his initial response to MyBroadband.

In a subsequent statement to MyBroadband, MTI said it declined to comment.

Vodacom in talks to buy Vumatel, DFA

Source: Telecom Paper

Vodacom South Africa is in discussions with Remgro to acquire Community Investment Ventures Holdings (CIVH), which owns Vumatel and Dark Fibre Africa (DFA), reports MyBroadband citing sources.

Remgro said it does not comment on speculation. CIVH acquired 34.9 percent of Vumatel for an undisclosed amount in June 2018 and the remaining 65.1 percent in May 2019.

Vodacom’s interest in Vumatel did not die down after the CIVH acquisition. The two companies started discussions in May 2018, when Vodacom CEO Shameel Joosub said the operator wanted to become a bigger player in the fibre-to-the-home market.

After the acquisition, Vumatel started working in tandem with DFA to provide fibre access to South African businesses and homes. Their fibre rollout in recent years is impressive. Vumatel and DFA’s 29 300km fibre network serves every key metro in South Africa. It passes 690 000 premises and connects 11 500 mobile base stations and 240 000 homes and businesses.

MyBroadband said the details of what such a deal may look like remain sketchy but it is widely accepted that Vodacom would have to pay a premium for this asset. Remgro has invested a large amount of money and resources into building CIVH into a strong fibre player.

By Laura He for CNN Business

Two prominent Chinese media outlets are urging Beijing to kill what they call a “dirty” and “unpalatable” deal intended to keep TikTok operating in the United States.

The editorial boards of China Daily and the Global Times — both state-run publications — this week blasted an arrangement that would give American companies at least some ownership in the short-form video app. TikTok’s parent company ByteDance is based in Beijing.

“What the United States has done to TikTok is almost the same as a gangster forcing an unreasonable and unfair business deal on a legitimate company,” China Daily wrote in an editorial published Wednesday, which called the deal a “dirty and underhanded trick.”

The terms of the tentative deal for China’s most successful global app have caused a lot of confusion.

The initial announcement last weekend implied that ByteDance would continue to own a majority of Tiktok going forward, raising questions about how that could resolve the Trump administration’s national security concerns about Chinese control of the app and its data.

But Trump has since indicated that investors Walmart (WMT) and Oracle (ORCL) would “own the controlling interest.” A person familiar with the deal told CNN Business earlier this week that a new US entity — TikTok Global — will be partially owned by ByteDance’s international and Chinese investors, but that ByteDance itself will hold zero percent of the company to be created by the deal to run the app outside of China.

“It seems as if TikTok can remain in the US. But only if ByteDance allows Oracle and Walmart to effectively take over the company,” China Daily added. “China has no reason to give the green light to such a deal.”

The Global Times, a state-run tabloid, also slammed the deal this week in two editorials calling on Chinese regulators to block it.

“It’s hard for us to believe that Beijing will approve such an agreement,” the Global Times wrote in one editorial. In a second piece titled “TikTok extortion deal is unpalatable gambit,” the publication added that “we should not let Washington control the lifeline of China’s technological development in the future. ”

Chinese state media is a powerful tool in the country’s propaganda machine, and the various outlets and their editorials are often looked upon as barometers of sentiment among senior officials. Some publications, like the Global Times, are more hawkish than others.

Notably, the China Daily and Global Times editorials were published in English — an indication that the TikTok editorials are likely intended for an overseas audience. State media editorials in China may also act as trial balloons for ideas, or to send a message to Western governments. (China Daily is an English-language paper, but Global Times also has a much more popular Chinese edition. Similar editorials were published in that edition, too.)

The extent to which Beijing still needs to review the deal is also not entirely clear.

Last month, Chinese regulators introduced new rules that govern the sale of certain kinds of technology to foreign buyers — a change that experts pointed out would likely require ByteDance to obtain government permission before selling TikTok to a foreign company. ByteDance has said that Oracle would be able to review the app’s source code, but that the deal does not involve the transfer of its algorithms and technologies.
A source familiar with the negotiations, meanwhile, told CNN Business this week that ByteDance isn’t concerned about regulatory approval from China. The source said there are still a few details left to sort out in the United States, indicating optimism that the deal could still close despite the media and political firestorm.

Selina Wang contributed to this report.

SA moves to Level 1

Source: BBC

President Cyril Ramaphosa last night announced that, following consultations with health experts and officials from across South Africa, the country would lower its current alert Level 2 to Level 1 from midnight on 20 September.

This means that, as of Monday 21 September:

  • Social, religious, political and other gatherings will be permitted, as long as the number of people does not exceed 50% of the normal capacity of a venue, up to a maximum of 250 people indoors and 500 people outdoors
  • The maximum number of people who can attend a funeral is increased from 50 to 100
  • Venues for exercise, recreation and entertainment – such as gyms and theatres – currently limited to 50 people, will be allowed to accommodate up to 50% of their venue’s capacity
  • The national 22:00 – 04:00 curfew will start two hours later
  • Alcohol will be permitted for on-site consumption in licensed establishments
  • International travel would resume from 1 October. Those arriving in South Africa must present a negative coronavirus test taken within three days of travel.

A further stimulus package was being drawn up to rebuild an economy that has been savaged by the lockdown.

Edcon saves over 5 000 jobs

Edcon has announced that the sale of parts of the Edgars business in South Africa to Retailability (Pty) Ltd has been implemented, with all approvals from regulatory authorities and all conditions precedent either fulfilled or waived.

The sale includes the transfer of approximately 120 stores in South Africa together with the businesses conducted therein.

Retailability, a fashion retailer and a holding company of store brands including Legit, Beaver Canoe and Style, operates in over 460 stores across South Africa, Namibia, Botswana, Lesotho, and eSwatini.

Retailability aims to ensure that ongoing operational business is its top priority, while integration work is moving ahead vigorously.

“We are pleased that we were able to close the transaction within two (2) months after the announcement. The closure of the transaction underlines the industry fit and the excellent compatibility between Edgars and Retailability’s strategic intent, infrastructure, and value chain. We are pleased by the significant saving of approximately 5,200 jobs as well as the continued commitment to the retail industry, economy, and the sustainability of the South African Edgars brand,” said business rescue practitioners.

The finalisation of the sale in South Africa indicates the achievement of a critical milestone in the Edcon business rescue plan. The parties will continue to co-operate and work towards concluding the sale of Edgars’ businesses in other various jurisdictions in Africa (namely Botswana, eSwatini, Lesotho and Namibia), where various regulatory approvals and conditions precedent remain
outstanding.

TymeBank enrolls 110-120k new customers each month

By Samuel Mungadze for ITWeb

African Rainbow Capital (ARC) injected R750-million in TymeBank in the last financial year ended June, a tough period for the relatively new digital bank, which saw it experience a drop in footfall to its kiosks under national lockdown.

Announcing its year-end results today, ARC says the bank onboarded 1.9 million customers, during the period under review, which was ahead of business plans.

The Patrice Motsepe-controlled ARC owns 70% of TymeBank equity.

The company says TymeBank is one entity in the ARC Investments portfolio that experienced some initial difficulty due to the COVID-19 lockdown.

“TymeBank experienced a drop in footfall to its kiosks located inside Pick n Pay stores in March and April under national lockdown levels five and four. With the easing of the lockdown regulations, the bank managed to increase its customer onboarding rate to pre-lockdown levels. As before, it now enrols about 110 000 to 120 000 new customers each month,” says ARC.

It adds that TymeBank is now signing up between 3 000 and 3 500 customers per day, with about half of the customers actively using their bank accounts.

“TymeBank is well-positioned within the SA banking sector to implement its unique low-cost banking fee model,” it says.

TymeBank is one of the new digital banks that launched to challenge the incumbents.

In July, the bank revealed it had introduced a fast mode of transaction, SendMoney, which allows users to send and receive money through their electronic gadgets, as a way of adding value for its clients.

TymeBank clients can now send cash to anyone with a valid South African cellphone number and the recipient will receive it immediately.

The service costs R4 per transaction when the recipient opts to cash the money out using the voucher, which it claims is one of the lowest rates in the industry, and is free when the recipient has a TymeBank account.

Commenting on the overall ARC performance during the period, Johan van der Merwe, co-chief executive officer of ARC, says: “Our performance in the period under review was first impacted by the poor trading environment as a result of a pedestrian economy.

“Subsequently, with the onset of the COVID-19 pandemic, the challenging operating environment was exacerbated. Interestingly, some of our investments experienced a significant acceleration in business activity, while others experienced a marked slowdown.

“In this instance, we have clearly benefited from a diversified pool of investments in our portfolio. This has helped us to perform satisfactorily on a relative basis to our peers, as well as other listed investment holding companies. On an absolute basis, we missed our key performance metric as a result of a poor trading environment. We are certainly not pleased with this performance.”

Notwithstanding the setback with TymeBank, ARC’s telecommunications business Rain benefitted from the COVID-19-induced lockdown.

The data-only network saw a sharp increase in its subscriber customer base as a result of people wanting access to cost-effective data, says ARC.

It says the Rain 4G rollout has also progressed well, with 5 500 active sites live as at the end of April.

The ARC Fund’s investment in Rain also increased from R2.5 billion at 30 June 2019 to R3.11 billion at 30 June 2020,which the company says was mainly as a result of a fair value write-up of R479 million.

“The business experienced a surge in subscriber numbers during the national lockdown period as people were required to work from home. Economic and social activities have increasingly moved online, including schooling, entertainment and connecting with family and friends,” says ARC.

“Going forward, we expect the difficult trading environment to persist over the short- to medium-term,” says Van der Merwe. “The impact of COVID-19 on our economy has been widely reported, with the economy now in a contracting phase. This does not bode well for many companies, including companies in which we have invested.

“As a result, we have already made plans with the management teams of key companies in our portfolio to see how we can align the business’s growth objectives with the prevailing economic environment. It cannot be business as usual over the medium-term.”

 

Online grocery shopping sees a surge 

By Ross Jenvey, founder and general partner at Kingson Capital 

There can be no question that Covid-19 has changed the way the world operates. Some trends are temporary, and some are more permanent, with the common question nowadays being: what will the new normal look like? As investors in early-stage technology companies, we at Kingson Capital are trying to establish what trends are likely to stick around long term after lockdown truly ends and identify the right companies to invest into that will benefit.

We believe that e-commerce will permanently benefit from people wanting to, or being forced to, socially distance themselves. One of the sub-sectors in this space is online grocery shopping. Adoption risk is common in most early stage companies, where new technology is built to change the way things are done, but people are often resistant to adopt the change. However, once forced to try something different, as many people have been in the last six months, the inertia is broken, and they often refuse to go back to the way they did things before.

Data released by Pitchbook on the US online grocery market shows that the early stages of lockdown in 2020 allowed grocery sales to regain some of the market share it had lost against restaurants and take-aways. More sophisticated technology, coupled with a slew of online grocery shopping options offered by stores and independent tech companies, have seen global online grocery delivery & pickup   increase from $1.2bn in August 2019 to $6.6bn in May 2020, a 450% increase in just nine months.

Pitchbook Research furthermore predicts that in the US, online grocery shopping is going to grow from 4.9% of total grocery spend in 2019 to 11.6% by 2025, a 2.4x increase in wallet-share. No matter how you look at it, this represents significant growth. The poster-child of the online grocery shopping industry in the US is Instacart, which raised $225m in a VC-funded round in June 2020, ballooning its valuation from $7.9bn in late-2018 to $13.7bn. Delivery Hero is a similar company, listed in Germany, and in the just over nine months to mid-September 2020, its share price has increased 28% (to a valuation of €18.0bn) as investors continue to take a positive view on this sector.

In South Africa, we are seeing equally positive developments. The main local players – OneCart, Checkers 60/60, Bottles, Quench and Zulzi – have all completed or embarked on funding rounds in 2020 led by JSE-listed companies. The main differentiation between these players is based on multiple versus single retail platforms that a customer can choose from. We are also aware that several of these players have seen anywhere between 200-500% growth in their daily orders since lockdown was implemented in March 2020. Google search analytics has shown that after an initial surge, the reduction of lockdown restrictions in South Africa has correlated with a reduction in online searches for “Online Grocery and Delivery services”. However, that search is still roughly twice as popular as pre-lockdown levels, and the growth in order volumes referred to above talks to the stickiness we would expect, as people become repeat customers. This is the kind of growth that usually attracts competition, and one place we foresee it coming from will be UberEats, after Uber bought the Mexican grocery delivery app business, Cornershop, in October 2019. New apps will also likely spring up.

Research released by the South African Council of Shopping Centres in May 2020 posted an expectation that retail sales will be down as much as 15% from current levels, and there will be slow recovery in shopping centre activity as GDP and employment both contract. Their survey revealed that 22% of respondents were not comfortable with visiting shopping centres and preferred online shopping, and 32% said they were regular online shoppers. This will likely accelerate the trend towards e-Commerce, as retailers try to protect their market share by pushing into this space, to the benefit of the incumbent tech solutions in the market. Interestingly, the major South African retailers such as Woolworths, Pick n Pay, Checkers and MassMart have all recently partnered with or acquired e-Commerce on-demand service providers. The ultimate winners will be the providers that can win consumer trust with consistent excellence in fulfilment and on-time delivery percentages.

Online grocery shopping is likely to be one of those sticky trends which will benefit greatly from the new way the world will work post-lockdown. Pitchbook analysts seem to think this will happen globally, and we think that South Africa will show equally exciting growth, even though we have traditionally been late adopters of e-Commerce. It’s also a sector that is creating jobs, since the shoppers and drivers employed now in this industry are new jobs, and the low skill requirements of the jobs is important in a country like South Africa. Necessity often brings about change, and consumers clearly need to operate differently in the new world they will find themselves in.”

Questions around MultiChoice’s executive exodus

Source: MyBroadband

Four high-profile MultiChoice executives have resigned or have left the company in recent weeks, raising questions as to what is behind these departures.

This week, MultiChoice announced that the CEO of its South African operations, Mark Rayner, had resigned to “further his journey outside the group”.

The company said Rayner will leave MultiChoice on 30 November 2020 and that his successor will be announced “in the near future”.

This follows shortly after the resignation of MultiChoice Connected Video CEO Niclas Ekdahl in June to “pursue personal interests”.

Yolisa Phahle will take over Ekdahl’s position, in addition to running the General Entertainment division.

Other departures include MultiChoice Group chief strategy officer Max Krudop and MultiChoice Connected Video head of communications Richard Boorman.

The exodus of high-profile executives at MultiChoice sparked speculation that there may be something more to these resignations than meets the eye.

One theory is that MultiChoice CEO Calvo Mawela’s management style and strategic direction for the company led to the resignations.

There is also speculation that some of the resignations and departures were not planned, but this could not be confirmed.

 

Transaction Capital buys 49.9% stake in WeBuyCars

By Philippa Larkin for IOL

Taxi financer Transaction Capital has announced that it has concluded a subscription deal to buy a 49.9% stake in automotive retailer WeBuyCars, for R1.84billion.

The group said that WeBuyCars would continue to operate as an independent business within its specialised market, adjacent to SA Taxi, with this investment establishing Transaction Capital’s third market vertical. It said the investment had no integration risk for it.

WeBuyCars is currently owned 60% by the family trusts of founders Faan and Dirk van der Walt, 31.5% by Fledge Capital Proprietary and 8.5% by minority shareholders.

Transaction said it would pay R1.47bn in cash and R16467000 on newly issued ordinary shares at R20 per share for an aggregate value of R329.3million.

It said favourable trends amplified by Covid-19 were likely to accelerate growth in the used vehicle segment.

Chief executive David Hurwitz said: “This investment is an exceptional opportunity to own a significant interest in a trader of used vehicles in South Africa. The investment in WeBuyCars will be immediately value accretive, converting interest income on our undeployed capital into higher yielding operating earnings, accelerating Transaction Capital’s earnings growth rate. Options are in place, which if exercised and implemented, after regulatory approval, would result in Transaction Capital increasing its interest in WeBuyCars at a future date.”

The Competition Commission earlier this year scuppered Naspers’s deal to buy WeBuyCars over fears that it could have led to a substantial reduction in competition in the car-buying market.

Transaction Capital said that WeBuyCars was uniquely positioned in its market segment, highly competitive and entrepreneurial founder-led business, with an impressive 20-year track record.

Hurwitz said he expected Transaction Capital to return to strong organic earnings and dividend growth above 2019 pre-Covid-19 levels for the 2021 financial year and beyond. Transaction Capital declined 0.38% on the JSE yesterday to close at R18.20.

 

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