SeeTop Investment Opportunities in South Africa

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Despite the aftermath of the global recession still being felt in my countries across the globe, South Africa has seen considerable growth in its developing sectors. When placed against the global average of 2.7 percent, South Africa has set new investment records in the past year, with its private equity funds growing to R103 billion ($ 7,545,616.18), or 3.2 percent of its GDP. The national growth has seen top investment opportunities in technology, retail, healthcare, and private education. We take a look at top investment opportunities in South Africa.

TECHNOLOGY

Technology is one of the most dynamic, innovative and growing sectors in South Africa. Local consumers are converging technology with their everyday purchases and experiences, largely for convenience. According to a recent study by global market research company Ipsos, 70 percent of South African consumers do their shopping online.

Global internet and entertainment group Naspers has seen outstanding growth from its investment in technology, specifically in global internet players. The company has grown from a market value of $5.7 billion (R77, 773, 229,635.69) in 2006, to $60 billion (R818, 665, 575, 112.57) in 2016, while the MTN Group also experienced growth in market value, from $16.2 billion in 2006 to $18.9 billion in 2016. The profitability of this sector is yet to peak, as internet access in the country is said to double in the next five years.

RETAIL

Some retailers have latched on to the platform presented by technology converging with shopping, and have seen unimaginable results. The Pick n Pay Super Animals digital app reached the 200, 000 download mark within six weeks of the launching. “In this campaign, it was just about having a bit of fun with the cards but I think we are going to see huge improvements to the shopping trip as smartphones and free/cheap Wi-Fi become ubiquitous,” said John Bradshaw, Pick n Pay Customer and Trade Executive.

Although innovative, Pick n Pay is still the second largest retailer in South Africa, after Shoprite. Shoprite Holdings is a public company listed on the Johannesburg Stock Exchange (JSE), with more than 450 stores across Africa, including Mozambique, Nigeria, Angola, and Tanzania.

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HEALTHCARE

Profits in investments in South African healthcare are seen mostly in the private sector, with the power in private healthcare embedded in hospitals. Over the past 10 years, private hospitals have increased their prices at almost double the rate of consumer inflation. Experiencing exceeding profitability are the three big groups which earn significantly higher than their competitors.  The three big private healthcare groups are Netcare, Life Healthcare, and Mediclinic, and collectively dominate about 80 percent of the private hospital market in South Africa.

According to their recent financial statements, Netcare increased its operating profit by 7.9 percent, Life Healthcare’s went up by 12 percent and Mediclinic’s by 15 percent. The past five years have seen significant gains in shares upon the three large healthcare groups. Life Healthcare Group Holdings shares have increased by 158 percent since its listing in June 2010, while Mediclinic International shares saw value increase by 275 percent, and Netcare by 203 percent.

PRIVATE EDUCATION

Private education in South Africa is said to be raking in the billions, with private education group Curro seeing steady growth in revenue since 2010. The group reported a total revenue of R1.38 billion ($10,109,660.51) for 2015. Competing player in private education, AdvTech has also seen remarkable growth in its investment, reporting over 30 percent growth in revenues. With the technology boom, online education has become increasingly popular, with great growth potential.

According to the Africa Market for Self-paced-Learning Products and Services report, Africa is the most dynamic e-learning market in the world, with South Africa, Zambia and Senegal presenting an average of 15 percent year-on-year growth.  The report predicts that come 2017, e-learning revenues will have doubled from the past five years in several African countries.

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