Patrice Motsepe’s investment group African Rainbow Capital (ARC) has bought a 49% stake in Sinayo Securities, a black owned stock broking firm, for an undisclosed amount.
The investment by ARC into Sinayo would significantly bolster Sinayo’s capital base, allowing it to execute large trades for clients and lift its daily trading capacity, the equities brokerage company said.
Prior to the transaction, Sinayo’s limited capital base had restricted its "ability to break into equity brokerage opportunities that entail extremely large lines of securities".
"Our capital adequacy is more robust than was the case before ARC became our equity partner. We are now in a position to facilitate and assist our clients when they trade large volumes and baskets of equities," said Babalwa Ngonyama, CEO of Sinayo Securities.
ARC CEO Johan van Zyl said in addition to expanding its scope and capacity of its activities, the deal would also enable Sinayo to participate in an international equities trading platform with access to global equities research.
"Progress on the international front will unlock opportunities for Sinayo to execute international equity trades on behalf of domestic and offshore clients."
Sinayo was formed in 2015 and ARC’s investment has been hailed as a boost for transformation in the securities industry.
The latest investment by ARC comes a week after it announced the set up of a new company, ARC Health, to invest in reforming and restructuring SA’s private healthcare industry.
ARC recently secured a 10% stake in financial services firm Alexander Forbes' African operations, and over 18% of Afrimat, along with 30% of mortgage originator ooba. At its launch in April, ARC had R10bn cashpile from parent Ubuntu-Botho Investments.