Investors on the JSE will be getting that nasty crimping feeling again.
Small investment company Astoria this week made the surprise proposal to repurchase shares from shareholders and delist. It feels like only yesterday that Astoria was taken over and rejigged from a broad international investment company into a niche investment vehicle.
In recent months the number of delisting exercises has mounted — Metrofile, Adcock Ingram, RFG Holdings, MultiChoice, Safari, African Rainbow Capital, Assura and Ascendis.
We do need more growth companies wending their way to the JSE — such as WeBuyCars, Boxer and the soon-to-list Optasia
While the universe of stocks for small-cap aficionados has diminished markedly in the past five years, the deal-making that usually triggers a delisting has at least presented opportunities for securing decent returns. There are probably a dozen other opportunities ripe for the taking with quality small- and mid-cap shares — from Transpaco to Reunert (for example) — still trading on enticingly modest market ratings.
While the decline in listings irks many market watchers, the JSE’s collective market capitalisation will be no worse for wear. With sizeable secondary listings such as ASP Isotopes coming to market recently — and the prospect of a fizzy Coca-Cola listing — the loss of a dozen small-cap listings won’t really dent the JSE’s overall market value.
It does sometimes feel like a harsh trade-off; stalwart local counters going private offset by more secondary listings of international companies. Does it really matter as long as there is ample choice for investors and suitable liquidity?
Yes, it does. We do need more growth companies wending their way to the JSE — such as WeBuyCars, Boxer and the soon-to-list Optasia. The key to opening the floodgate lies in a steadily improving economy — and fewer vicious corrections on foreign bourses.
