IT’S been another tough week in the markets for the rand, which to all intents and purposes is in free fall. Aided and abetted by government’s recalcitrant and obtuse responses to the little matter of a Russian cargo ship that snuck in under the blanket of darkness and left quietly two days later, the world is looking askance at South Africa.
With a track record of endemic corruption, empty government promises, political platitudes and a president who changes his mind as often as he does his shirts, it’s no wonder that the stock markets are on a decline, and investors are increasingly reluctant to get involved.
Globally, the markets are volatile too. Just look at the Chinese internet giant Tencent, whose major shareholders are Naspers (listed on the JSE) and Prosus (Eurotext listing), which have become increasingly risky, given their dependability on the whims of the Chinese Communist Party. (Prosus is controlled by Naspers.)
As noted in an article on the Investec website recently, if you are a state pensioner or a South African whose savings are tied up in Naspers, you are probably getting a little jittery right now, what with world politics and South Africa’s game of chess with its citizens’ future playing out on home soil.
In investment terms, there’s no such thing as a sure bet – unless one has a jolly good and solid inside tip. Traditional stocks and ways of doing business are falling by the wayside. Take the case of Ellies, whose share price has declined by 99% over the last decade. There are many reasons behind this, but a key one is perhaps not reading correctly where the world is headed in terms of technology, and the decision for the trading company to go public in the first place.
In Africa, we have often been the dumping ground for legacy technology as more developed markets forge ahead in their rapacious quest for, well, getting ahead. In many ways, instead of helping the continent progress, it has caused it to lag.
However, that is changing and rapidly.
Africa is now at the cutting edge of technology innovation and those companies that hold broad baskets of technology offerings and solutions are the ones that are winning.
One such company that has a diverse portfolio that speaks to the broadness of the technology space and is ideally positioned to capitalise on the explosion in digital across Africa, is Ayo Technologies (AYO). Often maligned in the press because of its associations with successful and award-winning business investor Dr Iqbal Survé, underneath the noise and clutter, AYO has a business case that deserves looking at.
AYO’s portfolio of companies includes a specialist technology healthcare provider that has been able to bridge the public and private sectors to create a seamless and homogenous system of records for example. Another is a leader in providing cybersecurity which, given that the country is reckoned to be in the top 5 of the worst affected or easiest to commit cybercrime in the world, business must be booming.
Add to this its investment into a mobile tracking software provider and a strategic stake in a leading technology provider for enabled awareness solutions across the commercial, security and military domains.
Covid-19 saw the exponential growth in remote working. This is a trend that has continued and, with it, the requirement for sophisticated audiovisual and workspace management tools and services. Here too, the ICT giant has a play, along with its investment into one of the country’s largest importers and distributors of telecommunications and consumer electronics.
Also in the portfolio is a well-established, full-spectrum ICT solutions and managed services organisation, as well as AYO’s stake in a company providing multi-technology communications systems for mobile broadband, networking, and microwave transmission – all the tools necessary to communicate, operate and live in the 4IR. Additionally, there is one of the country’s first and still successful, specialised digital media agencies that focuses on the commercialisation of digital content.
I would not say AYO has the perfect combination of investment assets with which to deliver on its extolled mandate when it listed, as there is always room for improvement, because as the world evolves so do business and consumer needs, but it’s as near as can be.
So, when not fighting factually incorrect assumptions about its business, AYO is probably a better bet for pensioners than an investment tied to the political turbulence of a foreign power.
BUSINESS REPORT