OVERVIEW
Banking and financial services Japanese and French companies are investing.
SECTOR INSIGHT Venture capitalists are active in Cape Town.
T
he financial services sector employs more than 50 000 people and the Western Cape hosts 17 companies which are listed on the stock exchange. According to Wesgro, 75% of the venture capital deals that happen in South Africa originate in the Western Cape. Most financial firms based in Cape Town have a long history, some going back as far as 1845 when Old Mutual (pictured) started life as The Mutual Life Assurance Society of the Cape of Good Hope. But it is also a dynamic sector with several banks establishing fintech hubs in the city to try to get ahead of the innovation curve. A newcomer to the Cape financial services sector is Nomura, a Japanese financial holding company. The company intends expanding its services into Southern Africa. The new green bond issued by the City of Cape Town is a sign of the “climate change” times. South Africa’s third-ever green bond attracted bids over R4-billion on an initial offering on projects worth R1-billion. The JSE intends opening a green section to deal with the expected growth of such instruments. The lead arranger for the bond was Rand Merchant Bank. The finance and insurance sector contributes 10.9% to provincial GDP and is an area of the economy that shows consistent growth. WESTERN CAPE BUSINESS 2019
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The sector outperforms most other sectors according to the FNB Chart Book, and further growth is anticipated. New financial services companies are starting or relocating to the Cape. These range from asset managers to hedge funds, venture capitalists and insurers. T he decision by the Johannesburg Stock Exchange (JSE) to open a JSE Exchange Hub in Cape Town confirms the city’s importance in the financial world. There are eight Cape Town-based companies in the Top 40 Index of the JSE: Capitec Bank, Mediclinic, Naspers, Woolworths, British American Tobacco, Remgro, Shoprite Holdings and Sanlam. The head offices of financial firms are dotted all over Cape Town. These include Old Mutual and Foord (Pinelands), Coronation (N ew lan ds), Prudential (Claremont), Sygnia (Green Point), Sanlam (Bellville) and Allan Gray (Waterfront). PSG has its headquarters in Stellenbosch and is well represented in rural towns. Insurers such as Santam and Metropolitan Life are based in Bellville. Fintech is increasingly important to financial institutions.
