It would have been huge for the JSE if South Africa-born tycoon Elon Musk had opted to dock Space Exploration Technologies Corp — or SpaceX — into the secondary listing platform on the local bourse.
Certainly, the overwhelming interest from local shareholders would have justified the exercise for the JSE. Wishful thinking, though. SpaceX’s prime mover seems to have rocketed light years away from his local roots.
I can’t remember the last time I saw a frenzied grab from investors at an IPO on the JSE. We’ve seen the listings of proper growth companies — such as consumer brands businesses Premier, WeBuyCars and Optasia — but you’d have to go back to the late 1990s during the internet/tech boom to see the kind of frothy sentiment whipped up by “new frontier investment”. Older readers will remember just how badly that all ended and just how few of the multitude of JSE tech listings still stand today.
While the AI-fuelled euphoria on the Nasdaq is distracting, investors who still determinedly trawl the JSE for opportunities can at least balance the lack of excitement with the lack of (downside) risk.
Single-digit earnings multiples for long-established, cash-generative and well-managed companies are still commonplace. Lean and mean business models as well as prudent capital allocation have fortified prospects for more than a few small and mid-cap businesses — and some of these, you may have noticed, are being a little more generous with dividends … a few even going the route of generous special distributions.
With retail investors increasingly able to peruse and back international counters — thanks to trading platforms such as EasyEquities and global research sprinkled around social media platforms — I suspect that some redoubtable local companies, especially those sans large institutional backing, will continue to trade at desultory market ratings.
Ultimately, investors maintaining some local focus will score from dividends and delistings, the latter an unfortunate consequence of unrealistically low market valuations.
It’s a deep value investor’s dream … but a dream more tangible at this juncture than long shots at interplanetary incursions.
