JSE broadens its Africa offering
The Johannesburg Stock Exchange (JSE) announced recently that it is evolving its strategy for growing its investment offering from the rest of the continent as appetite for African investments continue to rise.
The exchange already offers trade in a wide range of investment instruments focused on Africa outside of South Africa. To enhance this, the JSE’s Africa strategy will now include companies listed directly on the Main Board and AltX as well as offering depository receipts and a broader range of exchange traded funds and debt instruments.
As a result, the JSE will move the companies listed on its Africa Board directly to the JSE’s Main Board. Smaller and medium-sized companies in the rest of Africa fulfilling the criteria of AltX will from now on be encouraged to list; previously the Africa Board only catered for Main Board listings.
“The JSE’s existing African offering includes 12 African companies. In future, there will be no differentiation (for listing purposes) between African and non-African companies. For equities, this will mean that we will list the companies on the Main Board or AltX as applicable. We will also actively market and profile the African companies that are already listed.” says Siobhan Cleary, director of Strategy and Public Policy at the JSE.
There are several reasons why the JSE feels now is an appropriate time for this strategic shift. First, the October 2011 announcement by National Treasury that companies previously viewed as foreign listings would in future be treated as domestic makes it easier for South Africans to invest in JSE-listed African stocks. That makes capital raising by foreign companies easier. Second, the JSE has developed good relations with several stock exchanges on the continent. Third, investment flows into the continent’s markets and the number of funds focused on the region are increasing as investors search for high returns in previously unexplored emerging markets.
“All of this means that there is an opportunity for the JSE to work with these exchanges and various development institutions to build capacity on the continent. It also gives the JSE the opportunity to evolve its Africa strategy. This has meant looking critically at what issuers – companies, governments and others – from the rest of the continent are looking for, and aligning their needs with the JSE’s objectives,” says Cleary.
The JSE’s Africa Board attracted two high quality listings, Trustco from Namibia and Wilderness Safaris from Botswana, with interest shown by others.