File picture: Philimon Bulawayo
JOHANNESBURG - The SA Institute of Race Relations (Sairr) has welcomed the launch of the country’s newest stock exchange, Equity Express Securities Exchange (EESE), saying competition was good for a sector infamous for its slow transformation pace.

EESE launched its operations on Friday with the listing of Ukhamba Holdings Proprietary Limited, boasting a market capitalisation of R340 million. The company is a broad-based BEE empowered partner of Imperial Holdings Limited.

EESE joins the other new stock exchanges A2X Markets, 4AX and ZAR X, which are challenging the entrenched dominance of the 130-year-old Johannesburg Stock Exchange (JSE).

Sairr chief economist Ian Cruickshanks said if there were more exchanges, then there would be more opportunity to search around for lower transaction costs.

“That’s something positive for shareholders and asset managers. Existing exchanges are going to look to keeping themselves as efficient as possible and keep their costs down.

“Competition is always good for the sector. Do we know if there will be more new exchanges? We don’t know but it’s possible, as long as the JSE is making profits," he said.

Cruickshanks warned the new exchanges to be sure to look after the safety of their investors and have some efficiency because, “the JSE is recognised globally as a safe place to invest”.

First listing

Anthony Wilmot, chief executive of EESE, said they were delighted to announce their first listing on the exchange, adding that for the past four years the trading of Ukhamba shares was facilitated by Equity Express on an OTC basis.

Ukhamba supported EESE’s stock exchange licence application, which has ensured that the Equity Express trading platform could continue to be used in a listed environment.

Ukhamba director Berenice Francis said: “We congratulate EESE on this milestone in their business journey and thank them for their investment in ensuring a platform that addresses the need for inclusivity in financial markets. We trust that our shareholders will continue to find value in the user friendliness, reliability and access provided by our partnership with EESE.”

Wilmot said: “As a licensed exchange adhering to the stock exchange directives of the Financial Services Board, we are pleased to now provide Ukhamba with regulatory certainty regarding their share trading activities. In addition, we are humbled by the faith and support Ukhamba has shown in being the first company to list on EESE and we trust the relationship for EESE, Ukhamba and Ukhamba’s shareholders grows from strength to strength going forward.”

EESE regulated trading in restricted counters and its trading system would prevent the trade from taking place if the shareholder did not meet the restrictions set by the issuer - something unique to the new exchange. Ukhamba restricted ownership and trading in its shares to only historically disadvantaged South Africans.

In a Moneyweb interview in September, Wilmot had said he was "not entirely sure" of whether there was a place for another exchange in the South African marketplace.