JSE operator is looking east for dual listings
JSE Ltd may start a market for so-called transition bonds in the next six months to help companies fund a shift from polluting energy sources
The operator of the JSE is seeing opportunities for growth in Asia as it seeks to address market concentration on the bourse and a dwindling number of listed companies.
“The idea is to attract trading from those countries back into our market and also to attract dual listings,” Leila Fourie, CEO of JSE operator JSE Ltd.
Hong Kong, Japan, Singapore and China are among the markets the JSE is exploring to arrest a trend that saw 20 companies delist in 2020. The aggregate market capitalisation of all listed companies on the exchange, among the 20 largest in the world, increased 2%, it said in a statement on Thursday as it reported full-year results.
More listings may also help reduce market concentration on the exchange, where giant global tech investor Naspers accounts for 18% of the benchmark index.
In addition to the Asian push, the JSE will pursue new products that help drive sustainability. It may start a market for so-called transition bonds in the next six months to help companies fund a shift from polluting energy sources.
“With the drive towards sustainability the risk is we end of up with stranded assets that are wholly dependent on fossil-fuel power,” Fourie said. “The idea is to provide a financing mechanism that would enable companies that are fossil-fuel dependent to deploy debt funding towards a path of transition” to greener operations, she said.
The exchange’s 2020 revenue rose 13% to a record R2.53bn as increased market volatility spurred trading, with the heaviest equity trading volumes in March and April, the company said. Its stock has climbed 5% in 2021, lagging behind the 11% advance in the SA benchmark stock index.
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