A2X has established itself as Africa’s second biggest bourse
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JOHANNESBURG - A2X MARKETS, which began operating three years ago, has become Africa’s second biggest stock exchange by market value after the number of listed companies on the bourse increased to 40, with a combined market value of R5.4 trillion, it said yesterday.
A2X Markets received a boost after Prosus, one of the world’s biggest tech investors, with a market cap of R2.7 trillion, became the 40th company to list on the stock exchange in December. The Prosus listing more than doubled the A2X Markets combined market cap to nearly R5trillion.
Of the 40 listed companies on the A2X Markets, Prosus, Naspers, Sanlam, Exxaro Resources, Standard Bank, Mr Price, Growthpoint Properties and Aspen are among the JSE Top 40.
A2X Markets chief executive Kevin Brady said yesterday that part of the reason why A2X was enjoying continued growth in onboarding new companies to its platform was that many wanted to offer their shareholders the opportunity to benefit from the stock exchange, including lower transaction costs. Brady said in a tough economic environment, he expected investors to pay increasing attention to reducing cost, while at the same time trying to eke out improved returns.
“The focus in 2021 is likely to shift from last year’s big survival challenges, which consumed a huge amount of time and resources, to refining their digital strategy and platforms, staff well-being and productivity, and, of course, a relentless focus on cost savings. Many companies will have experienced the benefit of technology-driven savings and will now look to extract even greater efficiencies going forward,” said Brady.
A2X Markets, which began operating in October 2017 with three listings has become the leading exchange for secondary listings, thanks to its business model focused on cutting transacting fees for investors and brokers.
Brady said the company’s growing position was likely to be sustained by pending new regulation that includes the Best Execution rule, which would see brokers having to obtain the best possible result for their clients when executing orders on their behalf.
Brady said the potential savings this regulation could unlock for end investors were estimated to be upwards of R1 billion a year and the A2X focus in 2021 would be on expanding the range of securities available for trade on its platform.
“We remain committed to offering choices to all market participants. In addition to growing the number of secondary listings, A2X will also look to attract new listings to the platform that were previously not available to mainstream investors,” said Brady, adding that the bourse had also applied to the Financial Sector Conduct Authority for approval to introduce a series of new trade types.
“These additions are aimed at assisting both investors and brokers to source fresh liquidity while at the same time reducing friction costs and improving market quality.
“The trade types have proven successful in both the UK and Europe and, when approved for local use, will assist in helping us grow and develop our market in line with international best practice,” said Brady.