New market sets out to be Africa’s Nasdaq
For the longest time the Johannesburg Stock Exchange (JSE) has been South Africa’s primary exchange and Africa’s largest stock exchange. However, it could face some serious competition in the future if the newly opened Cape Town Stock Exchange (CSTE) is able to give it a run for its money. Having only opened its doors on the 30th of September, the CTSE has a long way to go; luckily it has the experience and it’s got high aspirations. Originally founded as the 4 Africa Exchange (4AX) and based in Johannesburg also, the 4AX elected to re-brand and relocate. As the CTSE, the exchange is housed in the Woodstock Exchange Building, in Woodstock, Cape Town. For years Cape Town has been considered a global city, not just with regards to tourism, but also with regards to technology. In fact, Cape Town is considered the best tech hub in the country with many business leaders deeming it the best on the African continent. Eugene Booysen, CEO of the CTSE has expressed his desire to make this exchange the Nasdaq of Africa.
An industry driven by technology
Unlike traditional exchanges that can make a company jump through a series of hoops in the hope of getting listed, the CTSE intends to target small companies and provide easier access in terms of listing by way of running everything from their very own cloud-based technology. The exchange has expressed the fact that their in-house registry, which uses proprietor technology, will make the listing process easier, cut through the red-tape, and reduce the overall cost. The idea is to make the process of listing easier while not compromising on the quality of the companies it admits. The exchange has gone on to declare that the governance, listing, and the managing of shareholders will be easier, and that they won’t just assist listed companies, but that companies with secretarial requirements shall also be assisted.
Reaching out to the little guy
The Cape Town Stock Exchange seems set on forging what can only be deemed as a more intimate relationship with the companies that it intends to list. The exchange has espoused its notions to work closely with their listed companies while also knowing that business is not just about the big boys, but the little guys too. CEO, Eugene Booysen has said that part of the efforts of the CTSE would be to focus on small and medium-sized companies, saying the following on the matter: “We believe that these growing enterprises offer huge potential to investors. They and the people who make them tick, are this country’s real assets.” Once again, a reiteration on their goal to focus on the smaller companies and to forge more intimate relationships. From the outset, these notions seem to contrast sharply when compared to trading on FTSE 100 index companies such as those found on the London Stock Exchange (LSE). But, and as already stated, the CTSE intends to be Nasdaq of Africa – which is no small feat.
Since opening shop back in 2017 under its old name of 4AX, the exchange has not managed to attract too many companies. In fact, to date, it has only seven equity listings. Booysen expects that number to double by the end of this financial year. Outside of acquiring more listings, he also expects the exchanges’ debt marketplace to start picking up the pace. More importantly, Booysen has also noted that the relocation of the exchange to Cape Town has brought it closer to the offices of numerous institutional investors, of which quite a few are based right there in the city. The optimism is there, now only time will tell if the companies will be there too.