JSE opens to foreign listings

20 August 2004

Africa’s biggest stock exchange, the JSE, is opening its doors to foreign listings, a move expected to significantly boost the value of the local bourse.

The National Treasury says the first listings will take place from September. The plans to allow foreign listings, including African firms, were first announced by Finance Minister Trevor Manuel during his budget speech in February.

The move is part of a bigger initiative to promote South Africa as the financial nerve centre on the continent, and to boost investment and development in Africa.

“Despite being the largest financial centre on the continent, South Africa’s capital markets have yet to play a significant role in channeling debt and equity capital to where it is needed for African infrastructure projects, direct investment and government finance”, Treasury director-general Lesetja Kganyago said recently.

“What is needed is a financial hub especially focused on the needs and circumstances of the region, much in the same way that Singapore and Hong Kong cater for the capital needs of the Asian continent.”

The JSE’s current market capitalisation stands at around US$258-billion (R1.6 trillion), which falls short of the value of both Hong Kong’s ($628-billion) and Singapore’s ($148-billion) bourses.

The JSE says it has already received inquiries from foreign companies interested in a local listing.

Kganyago said South Africa was well placed to become a preferred location for processing financial deals and managing global call centres.

The move will allow “African firms, finance institutions and sovereigns alike to access our markets for the long-term capital they need for development”.

“African companies can now be part of the JSE’s market indices, potentially increasing the scale of capital they can access, but also raising their profile amongst the analyst community”, he said.

“Developing a critical mass of analysts and investment advisers dedicated to the African continent is going to be critical.”

SouthAfrica.info reporter