New exchange to target township economy
Investors may get the opportunity to invest in a third South African stock exchange following the launch of ZAR X, the country’s second after the JSE, earlier this year.
The third exchange – Safe-X – will primarily target township entrepreneurs and assist them to grow their respective businesses, according to its CEO, Francois Venter.
Speaking to City Press, Venter said the company first applied for the stock exchange in 2012, shortly before the Financial Markets Act came into effect, and has had to reapply in accordance with the amendments of the new act.
“We have had to rewrite the entire application, which took us over a year. We are in the process of applying for a stock exchange licence and are working closely with government on certain strategic, economic and development initiatives,” Venter said, adding that what made their application different was that it was structured more as a public-private partnership and would target the lower end of the earning population.
Venter, who has been in the stock exchange space since 2004, said the kind of partnership embarked on would be a joint venture on training and developing, and government would not be owning any stake of the firm.
The exchange, Venter said, was based on a model adopted from the US blended with a European model and would have up to 10 trading boards within three years.
“Like, for example, you don’t need R30 million, you don’t need a profit of R10 million. We are aiming at that lower sector of the market,” he said.
The company will also establish a separate academy to develop and train township entrepreneurs on trading on such a platform. “We have to get the economy going on the lower end,” he said.
Venter said listings would be targeted as low as those turning over a between R1 million to R2 million per year and its listing requirements would not be too strict.
“The JSE has had two Pan-African listings in 12 years on the Africa board. We have a different model. We are working in partnership with Africa, we not taking over Africa,” he said, adding that Safe-X’s listing requirements would have a huge Pan-African focus, but would not be poaching from competitors.
“We are not going to poach their listings. They keep their listings. We are going to have their secondary listing on our side and ours on their side,” Venter said.
According to Venter, the company would be opting for a lean and effective staff complement on an operational level, instead of a long salary bill.
Venter said the company would be piloting its township-based model next year in Gauteng before spreading to the rest of the country.
The company has also roped in former JSE stakeholder relations manager Pearl Moatshe, who has 19 years experience in the field.
Moatshe said the company had not yet had discussions with other stock exchanges on the continent on cooperation.
The Financial Services Board (FSB) declined to disclose which other applications for stock exchanges had been received, saying: “The FSB normally issues a media release once a particular application for an exchange licence has been approved.
“If and when we receive an application, we will release a statement to inform the public in accordance with the provisions of the Financial Markets Act, 2012,” said Solly Keetse, the FSB’s head of department for the directorate of market abuse.