South Africa’s newest stock exchange A2X Markets (A2X) made its debut on Friday with three listings and four of the industry’s brokers on board.
A2X competes directly with the JSE and provides an alternative platform for companies to secondary list and trade their shares.
Financial services companies African Rainbow Capital Investments, Peregrine Holdings and Coronation Fund Managers are the first counters to take advantage of a secondary listing on A2X.
Stockbrokers RMB Morgan Stanley, Peregrine Securities, Investec Securities and Avior Capital Markets have been approved, while Nedbank Securities, SBG Securities and Sinayo Securities have applied.
A2X has appointed Strate as its central securities depository and will operate within the proven and reliable South African settlement structure.
“We are working closely with many of the remaining top ten stockbroking firms to have them signed up before the end of the year. We are thrilled to kick off with such high-calibre issuers and brokers and thank them for their support,” A2X CEO Kevin Brady said in a statement on Friday.
African Rainbow Capital joint CEO Johan van der Merwe noted that one of the main drawcards of an A2X listing was the potential for improved liquidity.
“Even though we are shareholders in A2X, we understand the value that a secondary listing brings to our company and we believe in free market principles that allow companies to grow and flourish.”
With the end-to-end costs of transacting in excess of 40% lower than current trading costs, stockbrokers have welcomed the choice brought about by a competitive exchange in South Africa.
Brady stated that A2X’s business model is dependent on throughput – the more trades processed through the exchange, the greater the revenues for A2X.
“A2X’s model aligns with the objective of growing the overall market in South Africa – lowering costs, improving liquidity and being both innovative and responsive to market needs,” he said.