ZAR X has signed up five stockbrokers and bagged another listing, saying on Thursday agribusiness TWK Investments would list on June 12.
TWK was the first in a series of listings, across many sectors, which would be announced in the coming weeks, said ZAR X CEO Etienne Nel.
TWK will join agricultural group Senwes and its holding company, Senwesbel, to become ZAR X’s third listing since the exchange launched in February.
ZAR X is one of three new stock exchanges, with 4 Africa Exchange and A2X Markets, to launch in SA in 2017 and challenge the JSE.
With a market capitalisation of about R450m, TWK would list about 35.1-million shares, said ZAR X director Graeme Wellsted. "The offer does not involve an issue of new securities… it is a migration from an over-the-counter platform to a licensed exchange environment," he said.
TWK Agricultural Holdings and its related entities held 69.77% of TWK, with the balance held by about 707 shareholders. The listing would increase TWK’s share liquidity, CEO André Myburgh said.
ZAR X also announced it had signed up five stockbrokers, with five more joining in coming weeks. These included Afrifocus Securities, Anchor Securities Stockbrokers, Independent Securities, Saxo Capital Markets and Senwes.
It cost virtually nothing to be a member of ZAR X, which enabled Anchor Securities to offer its clients companies that were not available on the JSE, CEO Rob Turner said.
"I hope other brokers will follow suit," he said.
ZAR X was "poised to disrupt the market with its technology and offering", said Travers Metherell, head of institutional sales and trading at Saxo Capital Markets SA.
ZAR X clears trades in real time by ensuring that both sides of the trade are prefunded, which means the cash and shares are in the stockbrokers’ accounts before the trade is matched. In line with most major exchanges, the JSE operates on a T+3 cycle, meaning it takes four days to clear a trade.
Prefunded trades mitigated potential risk faced by brokers over the settlement period of a trade, Metherell said. "[It] also does away with the need to tie up large sums of money in the form of regulatory capital."
The prevailing environment was tough for brokers that did not have large balance sheets or many discretionary clients, said ZAR X director, Geoff Cook.
Most broker applications it had received were from small-to-medium-sized brokers.
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