MOTHER CITY BOURSE
Stock exchange by the sea A stock exchange in Cape Town is not exactly new. The city had one before at the time of the SA War, when many Joburgers from the Transvaal fled Paul Kruger’s republic for the British colony John Young
ý Across the road from the Stock Exchange Hotel, in the Woodstock Exchange building, is Cape Town’s newest financial institution, the Cape Town Stock Exchange (CTSE). That these two buildings have the word “exchange” in them may or may not have something to do with Cape Town once having had a stock exchange (when the SA War drove all the Uitlanders out of Joburg). But the more significant co-location is the Bandwidth Barn across the corridor from the rebranded 4AX stock exchange. The tech incubator, run by the Cape Innovation & Technology Initiative, is a poster child for the Western Cape’s Silicon Cape ambitions. And the latest group of Joburgers to take up residence in the Cape are certainly tech-savvy. All the new stock exchanges offer newer and faster technology. But where there were three bourses with an X in the name, now there are two, and one of those, ZAR X, had its licence suspended in August for failing to meet “capital adequacy” requirements. CTSE CEO Eugene Booysen says he wants South Africans to think differently about capital raising on stock markets. “This is why we’ve focused on the smaller things and changed up the system to make capital markets more inclusive,” he says. Because the technology is in-house and cloudbased, listing and trading are cheaper, faster and secure. The welcome given to the CTSE by Western Cape premier Alan Winde has been “superb”, says Booysen, who also praises the
CTSE: Its technology is in-house and cloud-based Jurgens Photography
investment agency Wesgro. When Woodstock was a separate town, its municipal body, grandiloquently titled a “corporation”, aggressively offered rebates to attract industrial operations. This is why the area today is so full of mills, warehouses and breweries ripe for renovation and repurposing. Cape Town in 2020 was ranked second in Africa for competitiveness as a financial centre, according to the global financial centres index. Mauritius was top. Many asset managers are now located in greater Cape Town, joining the insurance giants and financial services groups. According to Tracxn, there are 173 fintech startups in Cape Town, including Jumo and Yoco. Says Booysen: “Our model closely aligns with the region’s digital drive, investment strategy and marketing.” It helps that the “bond investment community and decision-makers” are in Cape Town. In terms of the CTSE’s own liquidity, Booysen is glad to have the “unequivocal” support of the biggest shareholder, Lebashe Investment Group. (Lebashe also owns Arena Holdings, which owns the FM.) A second investor will come on board later because rules dictate that no shareholder may
hold more than 49%. The CTSE does not rely only on the stock exchange for income. There’s also a registry business, whose clients include 10 JSE-listed companies. Services can include organising virtual AGMs, e-voting and certification. The third arm of the business, Capital Solutions, arranges debt security. On the day the FM visited the CTSE, the first debt issue of more than R1bn was secured for Capital Harvest, an agriculture-focused financier. Agriculture is a subject that interests Booysen. “Food security is a future megatrend,” he says. “It is the bedrock of the SA economy, with established networks and companies with 120-year histories. It’s active in the debt and equities markets and they have built their underlying infrastructure on their own.” What’s more, it is technology driven and capital intensive. “It has all the ingredients.” Growth is the key for Booysen. Which is why the CTSE is targeting companies in the R25m-R2bn market cap range. “Those are the companies that are going to provide the growth in the next 20 years,” he says. “We need to get capital into the hands of entrepreneurs, the mom-
and-pop businesses, so that these family businesses emerge into the bigger space. If we get that right, we grow SA Inc. This is where job creation is happening.” Another area where Booysen sees huge growth potential is renewable energy. Having listed shares with an infrastructure focus to enable the purchase of shares in a wind farm at Tsitsikamma in the Eastern Cape in 2020, the CTSE announced a similar listing in early December. Booysen is not sure about the location of the short-lived Cape Town bourse that harboured refugees in the SA War. He thinks there could even be some confusion with the name because a stock exchange in Barberton was once named the Kaap Goldfields Stock Exchange (or variations on that based on the Kaap River). Although 4AX has become the CTSE and Joburg is a long way from Woodstock, the street address is familiar. In Joburg, 4AX had offices in Empire Road. The CTSE headquarters in Cape Town are at 68 Albert Road. That’s Queen Victoria’s Albert, otherwise known as Prince Albert of Saxe-Coburg and Gotha. Woodstockers know how to make Joburgers feel welcome, in an imperial way. x
December 16 - December 22, 2021
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