The JSE (touch wood) looks like ending 2024 in a far better position than most mark et watchers might have expected at the start of the year. For those who need reminding, pre-election jitters about possible dire political outcomes sent the all share index (Alsi) skittering below 73,000 points. At the time of writing, the Alsi was looking fairly buoyant at over 87,000 points — a gain close to 20% year to date.
Even more heartening are the gains in the small- and mid-cap sectors as well as the financial and industrial sectors, which largely represent what punters like to call the South Africa Inc stocks. Improved investor sentiment, however, has not quite spilt over into new listings activity — though all things considered, the JSE did not exactly have a dull year.
There were significant listings in the form of tech-driven vehicle retailer WeBuyCars, food group Rainbow Chicken and specialist mass retailer Boxer. All three were unbundled from larger parent companies, arguably driven more by structural necessities than pure growth and expansion objectives.
Powerfleet, after taking over MiX Telematics, was another significant secondary listing, adding a new-look counter worth a not insubstantial R16bn. Whether the secondary listing of two sizeable UK property groups, Assura and Supermarket Income Reit, in recent weeks is the start of a trend remains to be seen. Other listing activity was minuscule, in the form of investment company Altvest and alternative pharma company Cilo Cybin.
The success of listings such as WeBuyCars and Boxer will hopefully whet the local investment community’s appetite for IPOs. There is more than enough opportunity for junior miners to dig out green commodities, and it would be fantastic to see more local ventures coming to the JSE for primary capital raises rather than heading for the Australian Securities Exchange or the Toronto Stock Exchange.
Perhaps the most welcome news is that heavy hitters in the investment sector have banded together to form the South African financial sector competitiveness task force, in the guise of Operation Phumelela. The goal is to improve the ability of capital markets to grow the economy, create jobs and increase services exports.
The task force will also develop proposals to strengthen the position of South African capital markets as a financial hub for the region, which, in turn, should improve the country’s competitiveness as an attractive capital-raising and investment destination in both public and private markets. This can only be good for the JSE, whose CEO, Leila Fourie, is chairing the initiative.
The composition of the steering committee should reassure that the effort will not end up an academic exercise. Notable members include top legal eagles in the form of Bowmans chair Ezra Davids and ENS chair Michael Katz, as well as Remgro boss Jannie Durand, PSG Capital’s energetic Johan Holtzhausen, Nedbank chair Daniel Mminele, Southern African Venture Capital & Private Equity Association chair Vuyo Ntoi and Old Mutual CEO Iain Williamson.
Hopefully the task team’s work will emulate the success of the UK capital markets industry task force, which has sent positive ripples through the London Stock Exchange.
Fourie has already made plain the task force is envisaging specific interventions to sharpen up competitiveness, and intimated there’ll be no stuffing about in getting well-researched proposals on the table. Not a moment too soon.
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