JOHANNESBURG - The capital raised last year from initial public offerings (IPO) by companies on the JSE surged 178 percent in dollar terms compared to 2016, driven in the main by the listings of Steinhoff Africa Retail (Star), African Rainbow Capital Investment (Arci) and by Ayo Technology.
This is according to a study conducted by PriceWaterhouseCoopers (PwC). Star’s IPO raised $1.2billion (R14.15bn), while Arci fetched $332million and Ayo $328m.
The IPOs of the companies were also the top three on the continent last year. PwC said the listing of Ayo was the largest ever black empowerment listing of an information and technology group in South Africa.
The study further found that during 2017, five of the top ten IPOs by proceeds were launched on the JSE.
Vodacom’s $212m listing on the Tanzanian bourse was the fourth biggest in the year, while Long4Life was the fifth biggest.
In total Africa saw 28 IPOs last year raising a staggering $2.8bn.
When compared to 2016, the JSE also led the way with the $305m listing of Dis-Chem, the biggest on the continent in the period, followed by the $272m IPO of Liberty Two Degrees.
Craig du Plessis from PwC said the JSE all share index ended the year 17percent up from its 2016 year-end balance.
“The JSE all share index remained remarkably steady through turbulent times, an indicator of its ability to reasonably hedge the movement in the South African rand,” Du Plessis said.
“2018 will be critical for South Africa to demonstrate its commitment to structural reforms and to tackling issues that have created a drain on public funds and deterred growth.”
Last year the entry of four new exchanges in South Africa have altered the country’s listing environment.
The new participants, ZARX, 4AX, A2X and Equity Express Securities Exchange launched their trading platforms last year.
Du Plessis said the new bourses offer a regulated environment for entities and restricted-trading programmes such as black economic empowerment structures that might have previously traded over the counter.
“While these exchanges have welcomed a number of listings in 2017 and expect an active 2018, listings thus far have been technical in nature, with no new equity proceeds raised.”
Etienne Nel, the chief executive of ZARX, said: “A restricted market ensures that the shares remain in the hands of broad-based investors rather than being snapped up by those already advantaged.
“It, therefore, guarantees that wealth is shared equitably, reaching the places where it can have the greatest impact and thereby ensuring real empowerment rather than remaining an exclusive benefit accessible only to the elite.”
The PwC report also noted that South African companies dominated the further offers (FO) activity last year, accounting for 86percent of FO proceeds and 51percent of FO volumes. The composition of the top ten African FO’s by value in 2017 was largely concentrated in the JSE, with seven of the biggest FOs taking place on the local bourse.
Barclays Africa Group FO raised $2.8bn, while Vodacom and Sibanye Gold both fetched just more than $1bn.
“Egypt accounted for the next largest amount of FO volume in 2017 at 14percent. In terms of FO value, Mauritius accounted for the next largest amount last year at 4percent, while Kenyan FO activity stalled in 2017 with no further offers on the Nairobi Securities Exchange,” the report read.
PwC said over the past five years, there had been 385 FOs by African companies raising $43.6bn on both African and international exchanges.