Tag: stock

After President Cyril Ramaphosa’s address to the nation on Sunday evening, people with the means to do so have cleared the shelves in local stores of items such as:

  • Hand sanitiser, soap, and disinfectants like Dettol and Savlon
  • Toilet paper
  • Bread, flour and instant yeast
  • Vegetables with a long shelf-life, such as onions, carrots and potatoes
  • Tinned goods
  • Long-life milk
  • Baby wipes
  • Medical items such as latex gloves, rubbing alcohol, surgical spirits and plastic pump bottles

As schools, universities and creches across the country close until after the Easter weekend and many adults begin working from home, the focus has fallen on social distancing. Consumers have stocked up on essential items in order to avoid having to go to shops more often.

Multiple retail outlets have ramped up their online shopping platforms in an effort to meet demand for contactless delivery. Many items are out of stock, or snapped up as soon as they are in stores again.

A Woolworths store in Johannesburg.

Helping those most susceptible to Covid-19

In response to the unprecedented buying frenzy, Pick n Pay announced on Tuesday that it will open all its supermarkets and hypermarkets an hour earlier every Wednesday for customers over the age of 65.
This is to curb their exposure to coronavirus, as they are at a higher risk of morbidity and mortality associated with the disease. From 18 March 2020, stores will be open exclusively from 07:00 to 08:00.
It is expected that other major retailers will follow suit.

Item limiting

Stores such as Pick n Pay, Woolworths and Clicks have begun limiting the number of certain items purchased per customer. Clicks has limited medicines to six per person.
Woolworths has introduced the following limits online:

  • Toilet paper – between 2 and 4 units per person
  • Wet wipes – 10 units per person
  • Hand wash – 4 units per person
  • Tissues – 6 units per person
  • Tuna – 12 cans per person

Reasons for the panic buying

Source: EWN

702’s Bongani Bingwa spoke to Gordon Institute of Business Science Dean, Professor Nicola Kleyn, to unpack the effects of panic buying.

“Academic papers suggest that panic buying is actually rational disaster buying. They are expecting that they may not have access to food stocks for some time.”

She said panic buying in the case of a disaster was a fairly short-lived phenomenon.

“When people feel that death is imminent, in most cases, they will panic. What we are seeing is psychological behaviour, it is less about the stock and more about what they are buying, like toilet paper.

“The hypothesis is that toilet paper is big and comfortable and relatively cheap for its size,” she says.

“Buying toilet paper is not panic buying, people want to feel that they have done what they needed to be prepared and toilet paper represents an easy purchase. People need to be conscious and rational when they go shopping. If people are stockpiling, they must be willing to offer those that can’t.”

Images (c) My Office News

By Jeanny Yu for Bloomberg, Fin24 

China’s biggest online platform Tencent’s accelerating sell-off could get a lot worse if the stock fails to hold above its key support level.

There’s a risk that will happen Thursday: Asia’s biggest stock was down 0.6% in Hong Kong as of 1:03 p.m. local time, despite an otherwise upbeat stock market.

Tencent is now trading below the key level of HK$320 that supported its shares on three occasions this year. The stock has lost about 20% since a peak in April, equivalent to some $93 billion in market value.

Naspers, which via its new digital company Prosus owns a 31% stake in Tencent, is also feeling the pain. Both shares fell by more than 5% yesterday, losing R145 billion of their combined market value in a single day.

While the Tencent shares have been stuck in a downtrend for months, selling was particularly aggressive Wednesday despite no apparent trigger.

Theories circulating round some trading floors included souring sentiment from investors in China, as well as concern that Tencent’s decision to air National Basketball Association games may backfire.

Adding to jitters this week was a local media report that China is considering revising a law to control young people’s online gaming activities – a business that remains one of Tencent’s most profitable.

The Internet giant will report third quarter earnings on November 13.

Prosus, which is currently trading at around R1,020, has now lost almost 18% of its value since its listing in Amsterdam and on the JSE mid-September.

Source: 702

On Black Friday, most shops opened very early to allow shoppers to start helping themselves to the deals.

EWN reporter Shamiela Fisher reported that Checkers in Goodwood had long queues before 6 am. According to the manager, the staff had to be collected as early as 2 am to ensure that everything is in order by the time shoppers arrive.

EWN reporter Refilwe Pitjeng was monitoring Mall of Africa, Sandton and Woodmead in Gauteng.

She says toilet paper was the most popular item and Mall of Africa was out of stock.

Naspers to unbundle and list MultiChoice

By Nick Hedley for Business Day

The transformation of Naspers, which was founded more than a century ago to produce Dutch-language newspaper De Burger, into an online-only behemoth is almost complete.

Africa’s most valuable company, which owns a 31% interest in Chinese internet giant Tencent, said on Monday it planned to unbundle its pay-TV business MultiChoice onto the JSE.

Naspers will hand its interest in the DStv operator to its shareholders.

Investors cheered the news. After falling 3.2% earlier in the day, in line with Tencent’s decline in Hong Kong, Naspers rallied to close 0.7% up at R3,206.42, valuing the company at R1.4-trillion.

Naspers hopes to list the new entity MultiChoice Group, which includes its local and rest-of-Africa pay-TV business along with Showmax Africa and security company Irdeto, in the first half of 2019. The unbundling will cap off a remarkable transformation at Naspers, which was mostly a publishing and pay-TV business until its 2001 investment in China’s Tencent.

Naspers would not raise funds through the deal, said CEO Bob van Dijk, but its shareholders would benefit as the market currently ignored MultiChoice when valuing the group.

In its sum-of-the-parts valuation, US bank JP Morgan calculated that Naspers’ majority-owned MultiChoice unit is worth $8bn. More than 90% of that value sits in SA, according to the bank. That implies that MultiChoice Group is worth more than Shoprite.

Van Dijk said Naspers plans to give MultiChoice SA’s BEE investors another 5% stake in the local pay-TV business. “Besides unlocking value for our shareholders, maybe more important we think it will also unlock value for [BEE scheme] Phuthuma Nathi, which is already one of the most successful broad-based BEE schemes.”

He said Naspers will continue to invest in its SA e-commerce businesses, which include Takealot, Mr D Food, PayU and AutoTrader. “In the last year, we invested more than R3bn in the e-commerce businesses in SA alone. We expect to continue to invest and we’re looking at interesting prospects.”

It will also retain its interest in Media24, which is moving quickly into online publishing. The pay-TV market was poised for further growth despite pressure from internet-based rivals such as Netflix.

“Even in markets like Europe, people still have traditional TV services and on top of that people have connected services. In Africa the story is even more positive — you see very significant growth in traditional TV … as well as decent take-up already in SA of [streaming services] DStv Now and Showmax. I’m confident it’s a growth story.

“I feel confident about putting the business on its own legs.”

Robert Pietropaolo, a trader at Unum Capital, said the unbundling would be positive for Naspers “but the pressure will certainly be on MultiChoice to stay competitive”.

“MultiChoice themselves have already started cutting their headcount and they have started offering lower-tier packages, which unfortunately does not bring in the desired revenues. MultiChoice will not only have to be nimble from now on, but I think they may have to re-invent themselves to be competitive,” Pietropaolo said.

In the year ended March, the pay-TV operator lost 41,000 premium subscribers across its African markets. Even though the total subscriber base grew — MultiChoice added 563,000 users in SA in the year to March — this growth came from far less profitable lower-cost packages. However, the company remains highly cash generative. Over the same period, MultiChoice generated revenues of R47.1bn and trading profits of R6.1 bn.

MultiChoice SA CEO Calvo Mawela said the company had slowed the decline in high-margin premium subscribers. It lost more than 100,000 of these customers in its 2017 financial year but reduced that number to about 40,000 in 2018.

“Our focus on Premium is beginning to bear fruit.… We’ll continue to focus on Premium to ensure that we do not see further decline in Premium subscribers going forward.”

Naspers takes a hit as Tencent stocks tumble

By Kana Nishizawa and Jeanny Yu for Business Day

If you thought the slump in US technology stocks was bad, take a look at Tencent, the Chinese internet giant 31% owned by JSE-listed Naspers.

Tencent has tumbled 25% from its January peak, erasing about $140bn of market value. That is the biggest wipeout of shareholder wealth worldwide, as measured from the date of each stock’s 52-week high. Facebook, the F in the FANG block of mega-cap US tech stocks, is the second-biggest loser, with a $136bn slump over the past three trading sessions.

Investors around the world are beginning to question whether the best days are over for technology stocks — the undisputed leaders of a nine-year boom in global equities. Tencent, Asia’s second-largest company after e-commerce behemoth Alibaba, has also been dogged by concern that growth in its mobile-gaming unit is slowing. The stock, down 9.5% in July, is poised for its biggest monthly retreat since 2014.

“Investors are increasingly pricing in lower expectations for Tencent’s interim results,” said Linus Yip, a strategist at First Shanghai Securities in Hong Kong. “Overall, tech companies are facing a similar problem. They have been enjoying fast profit growth in the past few years, so it will be difficult for them to maintain similar growth in the future as the competition grows and some segments are saturated.”

Tencent’s year-on-year profit growth probably slowed to 5.1% in the second quarter, the weakest pace since 2012, according to analyst estimates compiled by Bloomberg before the company releases results on August 15. At least 11 brokerages cut their Tencent share-price target in July, including Credit Suisse Group and Morgan Stanley.

Still, analysts have not turned bearish: all 51 forecasters tracked by Bloomberg have a buy recommendation on Tencent shares, with the average price target implying a 44% gain over the next 12 months.

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