Black bro­kers call for rad­i­cal over­haul of sec­tor – Ab­sip

CityPress - - Business - PETER LUHANGA busi­ness@city­

De­creas­ing black bro­ker al­lo­ca­tions and a dis­pro­por­tion­ately low black pres­ence in the eq­uity re­search sec­tor war­rant a rad­i­cal over­haul of the in­dus­try.

This is ac­cord­ing to the pres­i­dent of the As­so­ci­a­tion of Black Se­cu­ri­ties and In­vest­ment Pro­fes­sion­als (Ab­sip), Si­bongiseni Mbatha, speak­ing this week at the as­so­ci­a­tion’s an­nual stock­bro­ker sum­mit held in Cape Town. Mbatha said the num­ber of black bro­ker­age firms had de­clined over the past 10 years.

He said some of the chal­lenges fac­ing the black broking firms to­day in­cluded a lack of leg­isla­tive sup­port, as BBBEE leg­is­la­tion re­mained vol­un­tary and only ap­pli­ca­ble to those “who wish to com­ply”.

“Black bro­kers lack the sup­port of en­abling leg­is­la­tion and reg­u­la­tions to drive trans­for­ma­tion in the in­dus­try,” said Mbatha.

He said the fi­nan­cial ser­vices sec­tor should com­mit to pro­mot­ing a trans­formed, vi­brant and glob­ally com­pet­i­tive in­dus­try that re­flected the de­mo­graph­ics of South Africa and con­trib­uted to the es­tab­lish­ment of an eq­ui­table so­ci­ety.

“In a wider eco­nomic con­text, more needs to be done to bring black peo­ple into the eco­nomic main­stream. While this re­mains a chal­lenge in a coun­try with high un­em­ploy­ment and low GDP growth, tar­geted ini­tia­tives can po­si­tion us on this path,” he said.

Mem­ber of the Black Bro­kers’ Fo­rum and CEO of Le­fika Se­cu­ri­ties, Vusimuzi Mkhondo, said the first black-owned stock­bro­ker was regis­tered on the JSE in 1996.

“Since then we have seen nu­mer­ous en­ti­ties come and go in this space. More than six black firms have closed. Clearly a low sur­vival rate,” said Mkhondo.

He said there were a to­tal of 44 qual­i­fied male black stock­bro­kers, of th­ese 20 were prac­tis­ing while 24 were not.

The ma­jor­ity in the in­dus­try con­sists of white male stock­bro­kers at 438; of th­ese, 264 are prac­tis­ing while 174 are not.

He said black stock­bro­kers faced an un­even play­ing field where they were ex­pected to com­pete against global play­ers with­out the match­ing re­sources and sup­port, re­sult­ing in low al­lo­ca­tion.

In a con­tri­bu­tion to the trans­for­ma­tion panel dis­cus­sion, head of eq­uity de­riv­a­tives at the JSE, Valdene Reddy, con­firmed that there were trans­for­ma­tion chal­lenges in the sec­tor and that the JSE was com­mit­ted to trans­for­ma­tion ex­ter­nally and in­ter­nally.

“We have a trans­for­ma­tion jour­ney that’s pub­licly avail­able while our own­er­ship is a chal­lenge,” said Reddy.

“Be­ing a listed com­pany, we make ev­ery ef­fort in terms of trans­for­ma­tion in staff com­ple­ment,” she said.

Gen­eral man­ager for listed eq­ui­ties at the Pub­lic In­vest­ment Corporation (PIC) Lebogang Mole­batsi said while the level of trans­for­ma­tion at the PIC was high, “there are pow­er­ful de­ci­sion­mak­ers at the PIC who do not agree with us on trans­for­ma­tion”.

“Key po­si­tions of de­ci­sion mak­ers at the PIC are be­ing held by the mi­nor­ity. We need black peo­ple to hold th­ese po­si­tions,” said Mole­batsi.

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