Good morning Voornaam,
 

Some companies evolve. Others fall away into obscurity, having to hold on for dear life (like Nokia and BlackBerry) or disappear completely.

Telkom has been a great case study in how a company can recognise and move away from a sunset industry. The inflection point referred to in this morning's lead story is fascinating: the number of homes connected to Telkom's fibre now exceeds the number of homes connected to copper.

Clearly, the remote working trend has been a major driver of this. I don't see that trend going anywhere, so vacancies in office properties are likely to be higher for longer. At some point, we will probably see many office properties converted into residential buildings in order to bring overall vacancies to acceptable levels.

Another loser of the shift to fibre is going to be MultiChoice. The owner of DSTV is still a force to be reckoned with in this country and has strong growth ahead in Africa, but the high-LSM market is falling away from it. Without SuperSport, I think the numbers would be ugly by now.

What about online shopping? We know that online shopping penetration is vastly higher in the UK than in South Africa. Again, there are clear differences between the two markets, but online shopping in South Africa is growing quickly and I believe that we are miles away from saturation point. If we think about this with property hats on, this is positive for small warehouses and large distribution centres and negative for retail shopping centres.

This is what I love about the markets. Something as innocuous as a Telkom quarterly update gets me thinking about the property and retail sectors. The world is connected and so are different industries.

Other stories this morning include Competition Commission approval for the WeBuyCars deal, an earnings update from Nedbank and an abridged report from Huge on earnings that were released previously.

A new Magic Markets episode will be released later today. Ensure you don't fall behind by listening to Episode 36 in which we discussed the quick-service restaurant sector and potential disruption by food delivery businesses.

Good luck today in the markets!

The Finance Ghost

Local and Offshore Market News

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