Kevin Brady. Picture: SUPPLIED
Kevin Brady. Picture: SUPPLIED

Stock exchange A2X plans to get all of the JSE’s top 40 companies to take up listings within the next two years, having cemented itself as the JSE’s main competitor.

A2X CEO Kevin Brady said that after the announcement that east European shopping centre giant Nepi Rockcastle would list on the exchange next week, he believed A2X was leading the alternate stock exchange race in SA. The exchange enabled investors to trade shares in SA’s largest and most liquid companies at lower costs than on the JSE. 

Brady said the exchange’s marketing and education drive had proved successful over the past two years, attracting the cream of SA business. 

“As financial markets develop across the world, corporations want a choice of places on which to list. For a long time in SA there was only the JSE on which you could trade but, over the past few years, we have created and grown A2X,” he said.

“The exchange is attracting the largest companies in the country, which encourages other smaller groups to join them,” he said.

A2X was now seen as a legitimate place for the best of corporate SA to seek new sources of capital and as a real alternative for smaller groups to follow suit, Brady said. The exchange has so far only offered secondary listings but it could offer primary ones in the next few months.     

Nepi Rockcastle’s listing will increase A2X-listed companies to 21 with a combined market capitalisation of R2.3-trillion. At least seven of the JSE top 40 companies, including Naspers, are listed on A2X.    

Independent analyst Anthony Clark said A2X had stood out compared with other exchanges that were trying to get their part of South African business.

“To date, A2X has been infinitely far superior to any other exchange. One, because of the quality of listings it has attained. Two, its marketing, and three, the underlying nature of its platform. It’s quick, it’s transparent and it enables much tighter spreads to enable institutions to deal on that market compared with the main board of the JSE,” he said.

If A2X were to offer primary listings it would also draw many smaller groups which only wanted to list on one exchange, while paying less to maintain their listing, he said.

“I invest in many counters which used to be over-the-counter (OTC) stocks but have gone to other platforms that have not worked that well. They are looking to move to a more liquid platform,” said Clark.

Three years ago, the Financial Sector Conduct Authority — then known as the Financial Services Board — ruled that the OTC market where stocks were traded in their own internal exchanges was illegal. This prompted many smaller stocks to hunt for new exchanges.

A2X’s competitor, ZAR X, was one of these exchanges which has so far attracted smaller groups such as Senwes, Senwesbel and TWK Investments, offering them primary listings. ZAR X focuses on listed black-owned investment vehicles to spread wealth among black South Africans, addressing inequality

andersona@businesslive.co.za