Etienne Nel of ZAR X says B-BBEE can be easily achieved. Photo: Nhlanhla Phillips/African News Agency (ANA)
JOHANNESBURG - ZAR X, ONE of South Africa’s newest stock exchanges, will launch a mobile app by end of April that will make it easier for investors to trade as the company seeks to be the “Gmail of investments”.

ZAR X chief executive Etienne Nel told Business Report in an exclusive interview that the app would be a groundbreaking development for the continent.

“No other exchange in Africa has its own mobile app. The mobile app will allow people to trade on their cellphones, thereby opening doors for the more inclusive financial services sector.

“We want to be a regulated crowd funding platform. We have created something called a segregated depository account (SDA). The account is held directly at Strate, and if you want to invest in ZAR X securities, you will get a broker who will open an SDA account for you directly at Strate. That account number is yours for life, and it’s free,” Nel said.

ZAR X was one of the new stock exchanges, with 4 Africa Exchange, A2X Markets, and Equity Express Securities Exchange to launch in SA last year and challenge the JSE.

South Africa is renowned for its mature capital markets that serve the domestic economy and the wider continent.

The JSE is ranked the 19th largest stock exchange in the world by market capitalisation and is the largest exchange on the African continent.

ZAR X earlier this month attracted the attention of the Public Investment Corporation (PIC) which bought a 25percent stake in the exchange for an undisclosed amount.

The exchange has engaged in discussions with the PIC around listing some of its private equity assets.

Nel said Broad-based Black Economic Empowerment (B-BBEE) could be easily achieved by having grassroots people play a direct role in the success of the business.

He pointed to the recent listing of BayHill TIP as a classic example of how to maintain a permanent majority black-owned company in terms of the B-BBEE Codes of Good Practice.

“Instead of being a 100percent BEE, BayHill said 55percent of their shareholders must be BEE at all times. If the white capital component, for example, gets to 45percent, our system can cancel all purchase orders for white shareholders so that their shareholding does not surpass 45percent.”

The Intellidex Empowerment Report, which looked into the country’s largest BEE deals since 2002, found the majority of black South Africans are excluded from the benefits of investing in the capital markets.

According to the report, of the JSE’s top 100 companies, 87 had conducted B-BBEE deals, 35 of which included public benefit organisations as beneficiaries. In total, these deals returned R51.6billion to beneficiaries, or about 16percent of the R317bn in value, net of funding, created by B-BBEE deals at the end of 2014.

Of this, R32.6bn in endowments was now held by 27 foundations that were set up for these deals.