Sygnia plans to launch a cryptocurrency exchange, the fund manager said in its interim results released on Friday.
This follows an effort by Sygnia to list a cryptocurrency-backed exchange-traded fund (ETF) on the JSE, which the local bourse reportedly rejected — although Sygnia CEO Magda Wierzycka has disputed that was the reason the ETF did not proceed.
The asset manager has launched the "Sygnia Cryptocurrency Fund that invests in a range of cryptocurrencies on behalf of investors" but does not trade on the JSE as an ETF.
Sygnia has also launched a range of Sharia investment funds, and the fund manager formerly associated with passive index tracking has also launched a "Sygnia Activist Fund that will capitalise on Sygnia’s activist stance".
Assets under management grew 14% to R180.6bn at the end of March, and Sygnia’s interim revenue grew 41% to R207m.
"The growth in revenue was primarily a result of a growth in existing assets under management through organic client growth and new client flow, a strong performance from Sygnia Securities in generating execution income, and the enhanced revenue stream from Sygnia Itrix," Wierzycka said in the results statement.
Sygnia Itrix houses the five foreign blue-chip tracking ETFs that Sygnia bought from Deutsche Bank in March 2017 for R325m.
The company took a R320m loan to finance the acquisition of Deutsche Bank’s JSE-listed dbx-trackers, and Friday’s results statement showed R8m finance costs muted its net profit growth to 8%, taking the bottom line to R37m.
Sygnia maintained its interim dividend at 25c.
Regarding the proposed cryptocurrency exchange that Sygnia hopes to launch in the third quarter of 2018, Wierzycka said: "To ensure the highest levels of integrity and security for clients, we are basing our policies, protocols and processes on existing regulatory framework applicable to cryptocurrency exchanges registered in New York State, US."