JOHANNESBURG - Sasol has joined the list of companies that are joining A2X Markets, the exchange in which billionaire Patrice Motsepe’s African Rainbow Capital owns a 20percent stake.
Sasol told investors that yesterday that its shares had been approved for inclusion in the list of qualifying equity securities to be traded on A2X with effect from next Monday (February 3).
“Sasol will retain its primary listing on the Johannesburg Stock Exchange and its listing on the New York Stock Exchange, and its issued share capital will be unaffected by the secondary listing on A2X. Sasol ordinary shares will be available to be traded on A2X from the A2X listing date,” said Sasol, which has suffered several setbacks at the US based Lake Charles Chemical Project.
Other companies with secondary listing on the A2X Markets since it was launched two years ago include Naspers, Mr Price, Sanlam and Standard Bank.
Michael Treherne, a portfolio manager at Vestact Asset Management said they were happy to see the emergence and growth of a second exchange.
“The JSE is basically a monopoly, so having some competition will be a good thing. Having said that, the JSE is very good at what they do, so all the new exchanges need to make sure their service is of the same high quality,” said Treherne, adding that for smaller companies, listing on A2X made them more visible to potential investors.
“The hope would be that the more visible they are, the more liquidity there is in the stock,” said Treherne.
Absa’s gold, platinum, and palladium ETFs are listed while the two ETNs are Investec’s Top 40 total return index (Tri) and Swix Top 40 Tri are also listed on the exchange.
Nolwandle Mthombeni, an analyst at Mergence Investment Managers, said a listing on A2X benefited mostly the brokers as A2X was a cheaper exchange than JSE, as far as cash equities trading is concerned.
“A2X only operates as a secondary listing, so any equity raises will still happen through the JSE. Typically how it works is that A2X will approach the corporate and try to convince them to list on their platform in the spirit of breaking the monopoly that the JSE has, and increasing efficiencies in the market through competition. The more companies listed on A2X, the higher the number of trades and thus the revenue. The listing is mostly neutral for Sasol and other corporates listed,” Mthombeni said.
A2X is owned by a small group of founding shareholders, including African Rainbow Capital, which holds a 20percent stake and broad-based empowerment company Nala, which owns 10percent of the exchange.
The JSE has been the main bourse in South Africa for more than 100 years. A2X Markets, and its competitors 4AX exchange, and ZARX have entered the market recently.
Sasol declined 3.73percent on the JSE yesterday to close at R254.63.