Exxaro gets approval for a secondary listing on the A2X from next week
EXXARO, one of the largest black-owned coal and heavy mineral companies in South Africa, has been approved for a secondary listing on the A2X from next week. Exxaro’s listing brings the number of securities available for trade on A2X to 36, with a combined market capitalisation of about R1.5 trillion.
Exxaro chief executive Mxolisi Mgojo said the listing signalled the group’s commitment to investors. “At Exxaro we believe one of the keys to remaining relevant is to incorporate emerging technologies into our business operations and our listing on A2X is an example of this,” Mgojo said.
This month Exxaro reported a 13 percent increase in headline earnings for the year ended in December to R7.6 billion, mainly driven by its income from equity investments.
Mgojo said the A2X listing would result in cutting costs. “A2X is leveraging technology in an effort to reduce trading costs which will lead to cost savings for Exxaro investors”, he said.
A2X, ZARX, and 4AX, are alternative stock exchanges that were introduced in South Africa to give competition in the market.
City Lodge Hotel, South Africa’s leading selected services hotel chain that owns lodging brands such as Road Lodge, Town Lodge, City Lodge Hotel and Courtyard Hotel and Fairview in Kenya listed on the A2X earlier this month.
Petrochemicals giant Sasol has also listed on the A2X in February as part of the commitment to adding value for shareholders and providing them with alternative trading platforms.
A2X, which began trading in October 2017, has listings from media, banking, retail, financial services, insurance, healthcare, and telecommunications sectors. Absa’s three precious metal exchange-traded funds and Investec’s exchange-traded notes are also listed on A2X.
The JSE, South Africa’s oldest and biggest bourse, experienced a reduction in the level of activity in primary markets, with fewer new equity listings. Revenue decreased by 5 percent in the year ended December 2019 to R147 million from R155m in 2018 owing to significantly fewer initial public offerings (IPO) for the year as there were five IPOs versus 12 IPOs in 2018.
Exxaro shares rose 9.03 percent on the JSE yesterday to close at R95.34.
NIKE SOARED as much as 11 percent after online-order growth helped sales vault past Wall Street estimates, laying out a blueprint for how the sportswear giant could cope with the coronavirus pandemic worldwide.
The company posted revenue of $10.1billion (R174.4bn) for the three months ended February 29, a period that included shutdowns across China, one of its key markets. Analysts had projected revenue of $9.6bn. Earnings amounted to 53 cents a share, matching estimates.
Since the end of the quarter, hundreds of millions in Europe and the US are now living under various forms of lockdowns, and Nike might have an opportunity to accelerate its conversion of customers from brick-and-mortar shopping to digital. E-commerce sales, already a major priority for Nike, were up 35 percent last year to $3.8bn. In the latest quarter, they rose even faster, at 36 percent.
“Amid unprecedented conditions across the globe, we are staying focused on not simply managing through this situation, but taking the actions that will allow us to emerge from it even stronger than before,” chief executive, John Donahoe, said. “We know it won’t be easy, but Nike is better prepared than anyone else to regain that momentum, extend our brand leadership and reshape the future marketplace.”
Nike’s shares rose as much as 11 percent to $80.26 in New York trading yesterday, adding to gains on Tuesday fuelled by a broader market rally. As of Monday, the stock had been down 38 percent this year, a steeper decline than the S&P 500 Index’s 31 percent drop. Nike’s latest results don’t give a full picture of the pandemic’s impact, since its fiscal third quarter only ran to February. But it’s one of the first big US companies to deliver earnings after the Covid-19 virus hobbled economies around the world, shuttering factories and offices.
Like a number of other companies recently, Nike opted not to provide guidance for its current quarter due to uncertainty around the virus. The company had previously said it expected full-year percent growth in the low double digits, but those projections came before the virus reached Europe and North America, where Nike has closed the majority of its stores.
The company’s coronavirus playbook anticipates that each geographical region will go through four phases, Donahoe said. In the first stage, which Nike calls containment, a country partially shuts down and stores close to stem the spread of the virus, leaving brands like Nike to rely heavily on digital sales.
Second is recovery, when brick-and-mortar stores slowly begin to reopen. That’s followed by a return to normality, when store traffic and in-person shopping hits pre-virus levels. And the last phase is a return to full growth for Nike.
In China, for example, containment lasted five to six weeks, and at one point 75 percent of stores selling Nike products were closed. The country is now through recovery and beginning its return to normality, Donahoe said. He expects the company’s China sales to be flat next quarter, then return to growth early next year.
“In the US, we’re earlier into the cycle,” he said.