Please give th­ese 50 away to some other stock mar­ket

Finweek English Edition - - Coverstory -

THE TO­TAL MAR­KET cap­i­tal­i­sa­tion of the 50 small­est shares on the JSE was just R1 100m last week. In big fig­ures, that’s R1,1bn. The to­tal mar­ket value of listed shares on the JSE last week was R5 500bn, or R5,5 tril­lion – if that kind of fig­ure means any­thing to you. The turnover of or­di­nary shares on the JSE is cur­rently just more than R10bn/day.

The to­tal turnover of the 50 small fry over the past year was less than R350m.

More than a dozen of those lit­tle ones had a to­tal turnover of less than R1m over the past year. Right at the bot­tom of the 50 lit­tle ’uns is the name of De­cil­lion, with a mar­ket value of R3,5m, yet it’s a com­pany listed on the JSE’s main board. Even the mar­ket value of Bernard Swanepoel’s Vil­lage Main – he was the bull of the year when he was still Har­mony CEO – is just a lit­tle more than R6m.

Other ridicu­lous of­fer­ings with a value of less than R10m in­clude Wooltru, the for­mer hold­ing com­pany of Wool­worths, and Awethu Brew­eries. There are 11 listed com­pa­nies with a value of less than R10m. Two of those can plead in­no­cent, be­cause their list­ings are in any case cur­rently sus­pended.

At the head of the list of the 50 small­est is Money­web with a mar­ket value of more than R40m. Noth­ing wrong with that. In fact, about two years ago it did the right thing by shift­ing its list­ing from the JSE’s main board to AltX, the sec­tor spe­cially cre­ated by the JSE for smaller com­pa­nies.

If the an­nual turnover of some of those shares is ex­am­ined their list­ing be­comes even more ir­rel­e­vant. Last year the to­tal turnover of the 50 small­est was just R350m. At least R100m (AGI’s turnover) must be de­ducted from that. That occurred be­fore the com­pany’s share price col­lapsed com­pletely, mak­ing it now a “proud” mem­ber of the bot­tom 50.

There are ru­mours around again about a new group that will soon ap­ply – or has al­ready done so – for a sec­ond share mar­ket li­cence in di­rect com­pe­ti­tion with the JSE. Their tar­get mar­ket is ap­par­ently the 500 big­gest com­pa­nies cur­rently not listed on the JSE. Per­haps the JSE will be do­ing them a favour by not op­pos­ing the ap­pli­ca­tion and even go­ing as far as do­nat­ing the bot­tom 50 to this new ex­change.

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