Banking and financial services

One of Johannesburg’s stock exchanges has moved.

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The flurry of new activity in the financial sector has slowed. Several new banks and exchanges have been launched in South Africa since 2017, most of them in Johannesburg.

One of the stock exchanges, 4AX, has rebranded as the Cape Town Stock Exchange and moved to that city while ZAR X had its licence suspended in August 2021 by the Financial Sector Conduct Authority (FSCA) because of concerns related to liquidity and capital adequacy.

Of the other new exchanges, Equity Express Securities Exchange (EESE) trades in Black Economic Empowerment (BEE) and A2X had 56 listings and a market cap of close to R4-trillion in October 2021, when Tiger Brands announced that it would do a secondary listing on the exchange.

The decision by pharmaceutical giant Aspen Pharmacare to conduct a secondary listing on one of South Africa’s newest exchanges, A2X, suggests good timing by the people behind the latest trend in the country’s financial services sector.

A2X has attracted nearly 20 companies in a wide range of sectors in less than two years, with a primary focus on secondary listings. Patrice Motsepe’s African Rainbow Capital is an investor in A2X.

The JSE is the world’s 19th-biggest exchange and about 344 companies are listed on the JSE or AltX, the JSE-owned exchange for smaller companies.

In December 2021 Nedbank listed a R1.09-billion green bond on the JSE, whose proceeds will be used to fund green residential developments. The bond is floated in the JSE’s Sustainability Segment, which serves as a platform for raising capital for green, social and sustainable investment projects. The bond brings the number of sustainability instruments listed to 35, with a total issued amount of over R17-billion.

The launch by Sanlam Investments of a Sustainable Infrastructure Fund is a sign of the times. The South African state has promised a huge infrastructure drive but in the context of climate change caused by the use of fossil fuels, the investment community is increasingly putting emphasis on sustainability. Sanlam Group will invest R6-billion in the fund and aims to attract a further R5billion from institutional investors. Investments will be made in housing, transport, health, water, waste, communication, conventional energy and renewable energy, a fast-growing sector with enormous potential.

Sanlam has entered two partnerships in the insurance market. African Rainbow Life has launched life-cover policies in the low and middle-income market, in association with Sanlam and African Rainbow Capital. Sanlam is also in a venture with Capitec. Naspers Foundry is one of several investment funds looking for opportunities in the financial sector. Insurance technology is of particular interest, together with credit services and payment systems. ■

ONLINE RESOURCES

Association for Savings and Investment South Africa: www.asisa.org.za Chartered Institute of Government Finance, Audit and Risk Officers: www.cigfaro.co.za Financial Sector Conduct Authority: www.fsca.co.za SECTOR INSIGHT Nedbank has listed a green bond.