At­trac­tive de­fen­sive

Finweek English Edition - - INVESTMENT -

Ex­pen­sive mar­kets and slower eco­nomic growth make the cur­rent in­vest­ment land­scape chal­leng­ing. To en­sure an ac­cept­able in­vest­ment out­come in this en­vi­ron­ment, in­come spe­cial­ist Mar­riott be­lieves that one should be look­ing for eq­ui­ties that have the abil­ity to grow its earn­ings/div­i­dends.

An in­dus­try that can do this is the health­care in­dus­try. Life Health­care is Mar­riott’s pre­ferred hos­pi­tal group. It has op­er­ated hos­pi­tals for over 25 years and has grown into one of the lead­ing health­care providers in South Africa. Although it has ex­panded its op­er­a­tions into Poland and In­dia, the majority of its earn­ings are de­rived from within SA.

The South African health­care mar­ket’s f un­da­men­tals are look­ing strong from a vol­ume, pric­ing and mar­gins per­spec­tive as de­scribed be­low.

The num­ber of peo­ple usi ng health­care benef its is ex­pected to in­crease in the years ahead for the fol­low­ing rea­sons: AN I NCREAS­ING NUM­BER OF PEO­PLE TO BE COV­ERED BY MED­I­CAL AID SCHEMES: This is an im­por­tant as­pect for pri­vate hos­pi­tal groups as ap­prox­i­mately 90% of t heir rev­enue is de­rived f rom med­i­cal a i d pa­tients. SA has ap­prox i mately 9m (17 % of t he pop­u­la­tion) peo­ple on med­i­cal aid and we have seen growth in th­ese num­bers more r ecently as a r esult of t he es­tab­lish­ment of t he Gov­ern­ment Em­ployee Med­i­cal Scheme. The ta­ble be­low shows a grow­ing num­ber med­i­cal aid ben­e­fi­cia­ries go­ing back to 2003. HIGH DIS­EASE BUR­DEN: SA has a high dis­ease bur­den rel­a­tive to other coun­tries, which ul­ti­mately re­sults in a

higher de­mand for health­care.

Newspapers in English

Newspapers from South Africa

© PressReader. All rights reserved.