A2X Markets Wins over South African Internet Giant, Naspers
South Africa’s one of four new stock exchanges, A2X Markets, owned by a small group of founding shareholders, management and staff, received a major boost after winning over Africa’s largest and most frequently traded public company, Naspers.
Naspers, the JSE-listed internet giant said it had been approved for a secondary listing on A2X, a stock exchange platform taking on the JSE. The company revealed that its shares will start trading on A2X from 27 December 2018.
Naspers will become the 15th company to have a secondary listing on A2X, which listed the shares of Standard Bank, Africa’s largest bank in November.
A2X’s unique selling proposition lies in the company’s ability to offer free secondary listings to companies. The exchange also gives their investors more trading options.
According to A2X CEO, Kevin Brady, Standard Bank was “a tipping point” for the exchange and Naspers “gets us to critical mass. To have the most liquid and second most liquid stock I think is a great endorsement for the merits of a secondary listing. We expect the rate of adoption to accelerate in 2019.″
Brady said the A2X, which offers lower trading costs than the JSE, also expects to have its licence amended in early 2019 so that it can offer secondary listings to exchange-traded products.
Mergence Investment Managers Portfolio Manager, Peter Takaendesa, said securing Naspers is a win for A2X “as they’ve attracted the listing of the most traded stock in South Africa”. He said “competition for the JSE is clearly increasing, but I think it will take time to make a material impact on its business and will also depend a lot on how they respond to the new entrants.”
The JSE still handles more than 99 per cent of trading volumes in South Africa and in July 2018, brought its trading costs closer in line with A2X and other rivals.
Also, JSE’s head of Capital Markets, Donna Nemer said “we’re also very committed to reducing the overall cost of trading on the market – we believe we’ve become very price competitive”.
Naspers CEO, Bob van Dijk said A2X and other new exchanges are reducing trading costs and increasing market transparency. He said “we believe our shareholders will appreciate the added choice of trading venues”.
A Naspers Spokesperson noted that “the secondary listing is not aimed at addressing the group’s discount but will provide additional options and liquidity for our existing shareholders and future shareholders.”