Who will be the first to list on ZAR X next week?
SA’s largest agribusiness, Senwes, will be the first to list on the country’s new exchange later in February.
The century-old company is currently trading over the counter but will migrate its shares to ZAR X on February 20.
Senwes group company secretary Elmarie Joynt said on Monday the main reason for the move was to comply with the Financial Markets Act.
The act requires all self-regulated trading platforms to apply for a licence to trade as an exchange, or migrate to a licensed exchange.
"ZAR X’s business model facilitates a low-risk, low-cost and easy trading environment. We are listing as an introductory offer, Senwes does not need capital raising now," Joynt said.
"As we are moving to a different low-cost platform we trust that more public exposure will lead to increased liquidity, but as stated, as a 109-year-old company, capital raising for now is not the object," said Joynt.
ZAR X was granted a licence to operate as an exchange in 2016. The start of operations was delayed by a legal challenge by the JSE.
However, last week, the FSB dismissed the appeal, allowing ZAR X to finally operate.
ZAR X is set to be the only stock exchange in Africa to offer real-time settlement. This means funds and shares would be received immediately after transacting, reducing risk for buyers and sellers.
Senwes said it would release a pre-listing statement before February 20 explaining the procedure and structure of the new trading platform. Shares at listing would trade at R10.50, Joynt said.
In 2010, Senwes contemplated a listing on the JSE but shelved the idea as it had no pressing financial needs.
The listing fee on the JSE for a company with a market cap of R2.5bn or less is R446,689.95. In addition, all new listings are subject to a new listing documentation fee of R72,526.32 with additional fees applicable to mining and real-estate investment trust companies.
On the ZAR X platform, a company with the same market cap will incur a total fee of R350,000.
Senwes’s main business is the provision of input products for agricultural production and the storage and handling of grain products. It also provides financial, technical and logistical services to grain producers.
Senwes has a market cap of about R1.9bn.