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Although the Financial Services Board has agreed to South African stock exchange, 4 Africa Exchange (4AX), becoming operational and ready for trade at the end of February, the bourse will only see its first listing in April.
“Given all the holidays that are coming up and the fact that we cannot control when a company prepares itself for listing, [there is this delay] and our second listing will be in May,” 4AX CEO Fay Mukaddam said at a briefing in Johannesburg, on Wednesday.
4AX has further tried its exchange technology with several regulated and unregulated global exchange platforms and, in December, it signed a deal to secure its own source code.
She highlighted that the bourse was currently targeting unlisted companies, that had not been listed for a number of reasons. “It is certainly not just because of market cap, as listings come with a whole host of requirements,” Mukaddam stated.
However, she quipped that when a CFO crunches the numbers, such as the initial listing fee and costs thereafter, the 4AX is an alternative to be “seriously considered. I don’t think there will be this massive migration from the [JSE’s] main board and we are not necessarily targeting the big issuers”.
4AX chairperson Chichi Maponya added that the local market was wide and untapped, with a number of opportunities for future listings. “With one of our key focuses not only being on institutional investors, but the retail market as well, we bring in a different angle, with companies tailor-made for these listings that will find a better home with 4AX,” she highlighted.
The bourse first started out with an over-the-counter focus, but Mukaddam said 4AX would broaden this to medium-sized enterprises, restricted schemes, special purpose vehicles and real estate investment trusts. “As our licence has been granted across multiple asset classes, it gives us manoeuverability,” she noted.
The 4AX plans to reach retail investors through investor education programmes, having already partnered with the Gauteng government to coincide with its township renewal initiatives. “We are exposing investment opportunities on the exchange to the Gauteng database investor, including entrepreneurs, stokvel members and informal savings schemes,” said Maponya.
4AX will further hold information sessions in vernacular languages to reach a wider audience and create inclusivity.