South Africa’s primary stock exchange operator JSE Ltd has seen a steady decline in the number of listed companies, with the FTSE/JSE Africa All Share Index currently featuring 136 companies, down from 143 at the start of 2022 and 165 in 2012, according to media reports.
South Africa’s primary stock exchange operator JSE Ltd. has seen a steady decline in the number of listed companies, with the FTSE/JSE Africa All Share Index currently featuring 136 companies, down from 143 at the start of 2022 and 165 in 2012, according to media reports. Companies grapple with onerous regulatory and funding conditions, making it less attractive to raise capital through initial public offerings.
The macro-economic environment is not particularly conducive to raising capital in South Africa, said Kevin Brady, the chief executive officer of A2X, one of the top stock exchanges in South Africa. The regulatory requirements to have a primary listing are quite burdensome from cost, to time, to compliance departments, particularly for smaller companies. Small companies are also struggling to keep up with the regulations imposed on listed entities, according to Brady. We have swung the pendulum too far on regulation and investor protection and we haven’t spent enough time on how to grow this market, he said.
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The JSE has proposed changes to its listing framework, as it seeks to stem the delisting trend and draw in more listings. Among the proposals is a review of the free-float requirement and allowing companies listed in other African exchanges to access the JSE via depositary receipts.
