DURING the eighties a good number of punters in the local investment community were more than a little serious about setting up a Cape Town Stock Exchange that would either rival or complement the well established Johannesburg Stock Exchange (JSE.) The premise was that there were so many great Cape-based companies – recalling names like Wooltru, Trencor, Pepkor, BoE, Boland Bank. Norwich, Oceana, I&J, Protea Assurance, Seardel, Rembrandt and Pick n Pay (to name a few) – that a separate bourse in the Mother City was more than justified. Such an ambitious - and dare we say divisive project – never took root, and the last efforts at any kind of stock exchange was a half-baked plan by Milnerton-based venture capital company Capital Commitments to start an exchange for emerging companies under the guise of the SASDAQ.
The Cape Town stock exchange idea might not have died out completely, though. In this regard it is interesting to note that the JSE has finally – after being in existence for 125 years - established an official presence in Cape Town.
Cape Town, of course, has often been seen as the home of investment – boasting an impressive grouping of wealth managers like Sanlam, Old Mutual, Allan Gray, Coronation, Foord, Prescient and more recently Sygnia.
Last month it was reported that because Cape Town was now an increasingly important hub of South Africa’s financial services industry, the JSE was opening a new office in the city to “enhance its service to clients, build and strengthen relationships and provide accessible support to the market”.
JSE Capital Markets director Donna Oosthuyse said Cape Town was a major centre for global and local institutional investors as well as listed companies.
“Being the second largest economic hub of South Africa, and the head office base of many institutional clients and an increasing number of member firms and brokers, an office in the city is a logical part of the JSE’s client strategy.”
The JSE will be represented by senior Capital Markets specialist Maryke Vreulink, and will be used for all JSE-related activities and events held in Cape Town. Although the JSE is one of the top 20 exchanges in the world in terms of market size and operates as an effective monopoly in South Africa, some sceptics are arguing that the sudden desire for a Cape presence is to head off efforts by entities intent on starting up rival stock exchanges.
Last year a number of financial services players sought stock exchange licences – some led by former JSE executives and respected players in the investment sector. These would include A2X, ZAR X and 4 Africa Exchange. Although these bourses would probably do their best not to compete directly with the JSE, any ‘disruptive ploys’ – like reduced fees and more user friendly trading platforms – might be perceived as a longer-term threat.
None of the alternative bourses have opened for business yet. But perhaps the JSE’s office opening suggests that perhaps one of the newer stock exchanges might well be headquartered in the Mother City.