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Johannesburg - While South Africa applies the final dabs of paint before the arrival of the Soccer World Cup visitors, investors should start working on their own plans for the tournament.
In a research report released last week, Bank of America Merrill Lynch pointed out which shares were likely to benefit from the tournament. These included the following:
- Bidvest. It has a contract with Match's services and hospitality division and is supplying cleaning and catering services for hospitality packages at stadiums.
- City Lodge Hotels. The company has four group of hotels (Courtyard, City Lodge, Town Lodge and Road Lodge) with a total of 5 000 rooms across South Africa.
- Foschini. Its sports division is the preferred partner for various major brands like Puma, Adidas and Nike.
- Imperial. It has the licence for the Europcar franchise in Southern Africa and also operates the Springbok Atlas fleet of buses.
- Naspers*. Its pay-television division is well positioned to benefit from the tournament, owing to an increase in TV advertising and strong demand for pay-television packages. While a limited number of matches are likely to be broadcast on the free channels, Naspers' pay channels will broadcast all matches, with accompanying commentary.
- SABMiller. Although not the official supplier of beer to the tournament, a global increase in beer volumes is expected. Most matches will be played in the afternoons and evenings, so average beer consumption should increase.
- Sun International. It is involved in the development, operation and management of hotels, resorts and casinos, and has already contracted 80% of the stock of rooms for the World Cup.
- Vodacom. It will benefit from greater local utilisation, and the increase in tourism will ensure greater demand for voice and data usage.
'No slump'
In contrast to the views of most economists, stockbrokerage Imara SP Reid does not believe South Africa will experience a slump after the tournament.
The group's February report on shares and strategy explains that a tailing-off generally occurs in a normal economy overstimulated by a tournament, and it consequently has to cool down.
Now that we find ourselves in a slow economic environment we should not expect excessive stimulation, the report cautioned.
- Sake24.com
For more business news in Afrikaans, visit Sake24.com.
*Fin24.com is a Naspers publication.