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Co's will still advertise

Fears that the Johannesburg Stock Exchange's new listing requirements will have a destructive influence on print media groups are unfounded, say analysts.

Even though the JSE announcement that listed companies will not be obliged to place financial announcements in newspapers will affect advertising income, the influence will not be as great as initially envisaged, they say.

BoE Securities media analyst Michael Cain says many companies will continue to place financial announcements in print media in the interest of investor relations.

"Just because companies are no longer required to place notices in papers, it doesn't necessarily mean they won't publish them," he says.

"Of course some of the smaller groups that don't have good reputations or that want to hide something won't place notices, but the larger, established companies will still regard it important to publish developments to keep shareholders happy."

Cain says the new measures will pave the way for the electronic media to impart additional information to shareholders. He adds that only about 2m people in South Africa have access to the Internet, which means that print information will still be needed for some time.

ABN Amro Securities' Alfred Visagie says that even though the new measures will prompt a shift to electronic media, he is not convinced that it makes sense to abolish the print requirement because most South Africans do not have access to electronic information.

He believes the recent developments will force print media to reconsider information delivery strategies.

JSE listings head Rudi Bam says company results, which can be extensive and expensive to advertise, need not be published by law. So he believes few advertisements will fall away or scale down substantially when the new measures are implemented.

"Britain has already moved away from the compulsory placing of notices. Listed companies there now spend more on public relations and market-orientated advertisements. What happened was that the nature, rather than the volume, of companies' advertisements changed," says Bam.

It was initially proposed that companies need not have to publish announcements in newspapers from February next year. Following consultations with newspaper groups, the stock exchange decided, however, to give the papers another two years' reprieve.

This means companies must still publish announcements in newspapers in English and one other official language until October 2002.

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