In a bid to boost liquidity on its equity platform, the JSE has expanded its secondary listings framework by allowing secondary listings for companies primarily listed on Hong Kong Exchanges and Clearing (HKEX).
The initiative enables HKEX-listed companies to pursue a secondary listing on the JSE, as well as qualifying for a fast-track listing process.
The JSE is still by far the largest and most liquid stock market in Africa, but the volume of listed shares on its platform has been shrinking over the past two decades, raising concerns among active money managers who are left with fewer potential investment opportunities.
Its total market value stood at R17.4-trillion on Friday, making it one of the largest stock exchanges in the world, but it is dominated by a handful of shares, most of which derive the bulk of their revenue outside SA.
The JSE and other stock exchanges have steadily been ceding market share to other sources of capital such as private equity funds while the SA economy has been stuck in a low growth trap. In recent years, cheap market valuations have rendered some companies prime targets for takeover.
In an attempt to reverse the delistings trend and attract new players to the market, JSE CEO Leila Fourie is overseeing several initiatives such as the partnership with HKEX.
“Dual listings are an important feature of our market, offering local investors a more diverse range of investments and enhancing the liquidity and global relevance of SA’s capital markets,” Fourie said in a statement on Wednesday.
“The fast-track process has the added potential to expand the universe of listed companies on our local bourse.”
The JSE’s fast-track listing route, in place since 2014, offers an expedited approval process, reduced listing fees, and minimises the resource requirements typically associated with a prelisting statement. This approach is part of the JSE’s ongoing effort to enhance accessibility and efficiency for international companies.
This framework still ensures that investors have access to relevant information about the company in order for them to make informed investment decisions. This initiative streamlines the dual-listing process, leveraging the extensive information available on these companies in their primary markets.
Over the past year or so, the JSE has also reformed its normal listing requirements to encourage more initial public offerings, launched actively managed exchange traded funds, and introduced transition- and sustainability-linked bonds.
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