JSE delistings: business as usual

Johannesburg - Although the main board of the JSE has had twice the delistings it had last year, this is not the recession's fault.

The market value of the nine new listings - at more than R90bn - more than offsets the loss of 23 companies that took R17bn off the stock market.

Coronation Fund Managers portfolio manager Alistair Lea says that if one compares the number of delistings with those in previous years, the number is not unusual, so it's not fair to blame the recession for them.

The reason for the massive difference in the market value of the listings is the size of those that joined the exchange this year.

Of these, Vodacom is the most significant, with a market value of almost R80bn.

Recessionary conditions tend to oblige companies to examine very carefully their reasons for listing and whether these, given the circumstances, still make sense, says David Shimkins, head of corporate finance at Grindrod Bank.

In the same period the JSE's all-share index has risen 51% from its low point in March.

But the main board's alternative sibling, the AltX, has not seen a similar rise. In fact, it has fallen 53% since March.

Nevertheless this market still attracted four listings, compared with last year's five. People have been burned on the AltX, said Lea. Its companies experienced phenomenal growth when it started out, largely thanks to the booming construction industry.

The Africa Board is still a very lonely environment for Trustco - the only company to settle there early on.

But Shimkins is full of confidence that investors will return as soon as the crisis is over. There are many companies with operations in Africa that will benefit greatly from a listing on the Africa Board, he says.

- Sake24.com

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