Alternative South African capital market platform A2X Markets (A2X) has grown the variety of securities listed on the change by 67% in 2022 alone, marking the most listings it has achieved in a single 12 months because it started buying and selling 5 years in the past.
“A2X started the year with 54 listings and added a total of 37 securities with a combined market capitalisation of R800 billion,” the platform’s co-founder and CEO Kevin Brady tells Moneyweb.
Listen/Read: Many are beginning to see the advantages of a secondary itemizing
He says A2X’s buying and selling volumes have additionally grown considerably in 2022, by over 200% year-on-year to the finish of November.
With a surge in new listings in the second half of this 12 months, Brady provides that the A2X platform has seen an virtually 300% development price throughout this era.
The bourse noticed eight new secondary listings in the final quarter of 2022, bringing the whole variety of devices listed to 93 with a complete mixed market capitalisation of R5.3 trillion.
The eight listings in This autumn embody:
- Hyprop Investments, listed on 7 December
- Truworths International, listed on 5 December
- Woolworths, listed on 2 December
- Life Healthcare, listed on 1 December
- Attacq, listed on 16 November
- Pick n Pay, listed on 1 November
- Sygnia’s Itrix Sustainable Economy ETF (exchange-traded fund), listed on 24 October; and,
- 1nvest’s 16 ETFs, listed on 5 October
Commenting on the platform’s efficiency, Brady says: “We are very pleased with how A2X has performed this year as well as from the support from corporate South Africa. We’re at a point where the momentum is strong, and people are understanding the platform’s value proposition.”
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According to A2X, it has grown its commerce worth to over R26 billion in 2022, in comparison with R657 million in its first 12 months of commerce.
In addition, it now has 17 high 40 constituents listed, with the likes of Remgro, Nedbank, AngloGold, Implats and Discovery itemizing in 2022.
“Seven property companies are listed, representing over 50% of the property sector as measured by market cap,” the bourse notes.
It says 5 of the high six brokers in the nation, specifically Peresec, Rand Merchant Bank, Standard Bank Securities, Absa and Investec, representing 60% of whole brokering exercise in South Africa, are A2X members and commerce on the platform.
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“In addition to the many public companies that are secondary listed on A2X, there is also a growing number of exchange-trade funds [ETFs] listed on A2X as well.”
“Local ETF issuers, including 1nvest, Absa and Sygnia, have opted to secondary list some 34 of their ETFs on A2X because of the benefits it brings for their investors. This represents over 50% of the local ETF markets as measured by market cap,” it provides.
Savings
The various bourse says it has calculated the potential financial savings, it makes obtainable to the market, to be round R500 million per 12 months.
It claims that its financial savings pool, pushed by cost-effective buying and selling charges and the skill to seize value enchancment, outcomes in the shopping for and promoting of shares at a greater value when brokers transact.
“The current savings amount of R500 million is set to increase significantly to potentially R1.5 billion as more public companies decide to secondary list on A2X,” it provides.
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Brady says the platform’s financial savings providing reveals that there are important alternatives to decrease the value in key components of the funding worth chain.
“These advantages are then delivered to the peculiar one that is searching for to incrementally construct their wealth by method of an funding or pension fund product.
“As a significant player in the capital markets, we remain mindful that for most people in South Africa, the only wealth they are likely to accumulate over their lifetimes is in their pension fund,” he provides.
“Therefore, as accountable business gamers, we should continually take a look at how we decrease prices to profit the finish shopper. Small, incremental value financial savings over, say, a 30-year interval can add a big enhance to folks’s pension funds,’ he factors out.
Speaking to Moneyweb, impartial analyst at Small Talk Daily Anthony Clark says whereas A2X’s licence solely permits for secondary listings, the various bourse provides a bunch of advantages, similar to its low transactional prices which result in saving cash versus transacting on the JSE.
“As a digital platform, the underlying transactional costs are substantially lower than the JSE where everybody bemoans the fact that the monopolistic dinosaur has layers and layers of fees to operate on its platform. A2X is a much simpler situation,” he provides.
According to Clark, the A2X typically prides itself on having a a lot tighter unfold, opposite to the JSE.
“What that means is if you’re an institution dealing in size consistently, that incremental saving that you’re making between buying and selling actually starts to add up alongside the speed of the transaction and the lower costs,” he explains.
He says these components have led many giant corporations now having a secondary itemizing on the A2X.
Clark additional notes that the bourse makes its cash from the quantity flows on its platform.
“So, the more participants it gets on its platform and the more those stocks trade, the more money the A2X exchange makes. But at the end of the day, the underlying participant ends up saving incrementally more money than they would if they did the exact same trade on the JSE.”
However, he says that there’s a limiting issue to the platform as a result of it doesn’t have a full suite of brokers like those that ordinarily commerce on the JSE.
“It does tend to concentrate the tradability amongst institutions who have a counsel with brokers. But the platform does have major brokers.”
“All in all, the A2X exchange has done quite well so far. I expect it to continue to pick up new listings purely for the tightness of spread, the ease of the digital platform and the swiftness of settlement and trading,” provides Clark.
Future
Talking about the way forward for the platform, Brady says A2X has its sight set on getting the majority of the high 100 corporations to have a secondary itemizing on the bourse.
He says the change intends to get a secondary itemizing licence with the Cape Town Stock Exchange and hopes to introduce new merchandise to South Africa together with extra inward listings from offshore exchanges.
“I understand for many companies that there is a bigger investor base looking for international exchanges. In South Africa, we’ve got the shrinking pot of listings, but we need to find new ways to attract new listings in the country. We need to grow South Africa’s pot in that regard.”
Listen to Brady talking about the A2X in this particular Moneyweb podcast with editor Ryk van Niekerk (or learn the transcript):
Nondumiso Lehutso is a Moneyweb intern.