Euronext head of international listing Gilles Ohana says the JSE still has a lot of pull factor with international investors, saying the 137-year-old bourse remains the lodestar for Africa’s capital markets.
Ohana, in an interview with Business Day during his visit to the country, said that with initial public offering (IPO) activity rising in Europe the JSE was well positioned to benefit from secondary listings.
“SA is very well known and regarded as the backbone of the African capital markets and the JSE embodies this framework,” Ohana said.
“Euronext is at the core of the European capital markets in terms of infrastructure. We want to ensure we offer best-in-class services to each other [JSE and Euronext]. We already have a number of companies that are listed on both exchanges, the likes of AB InBev, Prosus and Nepi Rockcastle.”
Ohana joined Euronext in July last year from PrimaryBid, where he was MD of global capital markets.
Euronext has more than 1,800 listed companies with a market capitalisation of about €6.3-trillion.
The JSE has in the past year expanded its secondary listing framework to include Euronext exchanges among its accredited markets, highlighting the strength of the JSE’s framework and reflecting growing global confidence in SA as an attractive investment destination.
Part of the steps the JSE has undertaken to enhance the relationship include allowing companies listed on partner exchanges for more than 18 months to list on the JSE main board or Alternative Exchange with a prelisting announcement, rather than a prospectus.
This reduces listing fees and resource use for new and dual listings, the JSE stated, while ensuring that relevant information about the company is accessible before investments are made.
The exchanges a year ago embarked on a dual-listing initiative as investors look for deeper capital markets.
The JSE this week hosted representatives from Euronext, Europe’s largest capital market infrastructure, in a visit meant to cement relations between the bourses.
Growing collaboration with the JSE
Ohana said there was a visible uptake in IPOs, particularly from technology companies. He further elaborated on the partnership with the JSE.
“We look at the end result as follows: having more companies dual list and bonds that can attract investors from both markets. We are also looking at ETFs [exchange traded funds] that can be sold to different audiences,” Ohana said.
“You can imagine an ETF listed on Euronext that has SA and Africa underlying assets being distributed into European investors. Similarly, you can imagine European ETFs giving SA investors access to investment within Western Europe.”
The JSE has halved in size over the past two decades due to delistings. It has been in a big push over the past few years to grow its nontrading revenue by double digits, while the volume of shares being traded on the local bourse dwindles, posing a liquidity challenge for investors.
The exchange is working on several initiatives, such as simplification and segmentation projects, to create an enabling environment for listed companies.
The JSE has also been entering into several partnerships with the world’s leading exchanges.
In April, the JSE and Nasdaq said they were investigating the possibility of deepening their long-standing relationship in a modernisation push that the exchanges hope will boost liquidity between the US and SA, with the option of collaborating on listings on the cards.
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