JOHANNESBURG: Officials of the Johannesburg Stock Exchange (JSE) say they are confident that they will succeed in luring a number of BSE-listed firms to cross-list on their recently launched Africa Board as consultations for the purpose continue.
The Director of Government and International Affairs at Africa's biggest bourse, Geoff Rothschild, says they have already received enquiries from BSE primary listed firms interested in secondary listing on the JSE's Africa Board.
"We have met and engaged with Rizwan Desai (BSE Chairman) and Hiran Mendis (BSE CEO) and we now wait for their response," Rothschild said recently during a trip to the JSE by journalists attending the 3rd Standard Bank Africa Media Forum.
Even though he would not identify the companies he was referring to, Rothschild emphasized that there were a number of Botswana companies interested in dual listing.
JSE's Business Development Manager in charge of the Africa desk, Geoff Musekiwa, said they were also negotiating with other stock markets in Africa and that they visited countries like Kenya, Zambia, Zimbabwe and Tanzania recently.The JSE Africa Board was launched in February and so far only a Namibian financial services firm, Trustco, has listed on the board. For a firm to list, it must be based in Africa or most of its operations must be based on the continent.
"We want to promote growth of capital markets by providing a hub and spoke interconnectivity model connecting SADC stock exchanges," Musekiwa said. Companies listing on the JSE would have access to a market where they could
Such companies would have the opportunity to trade liquid, cost-effective and easily accessible exchange with extended hours. "It is part of our efforts to promote stock markets in Africa, given their significance in economic development, while enabling our firms to grow," he said.
But the JSE has reportedly encountered resistance from several exchanges which feel that the South African bourse is hijacking an idea they have had in the pipeline for some time. Musekiwa acknowledged this but bemoaned lack of liquidity on several African stock markets. The JSE's plans could also be derailed by lack of a harmonised regulatory framework on the continent and the different stages of development of the stock exchanges.
Most of them, the BSE included, are still owned and funded by their governments, which makes it difficult to agree to harmonised regional investment initiatives. "Governments still have a hold on exchanges, which means sovereignty and territorial pride is still a big issue," Musekiwa said.
The JSE's main board was not left unscathed last year during the bear run caused by the global downturn, losing R54 billion. However, it made a dramatic swing in the first quarter during which R37 billion returned to the market.