The JSE wants to keep trading round the clock, as if the problem with SA’s equity market is that investors can’t buy or sell at 2am. It’s a bit like installing neon lights above a 24-hour casino in Putsonderwater — impressive from a distance, but there’s still no-one around to make use of it.
Financial markets have always been about confidence. Investors don’t flock to a bourse merely because it’s open, they come because they trust prices are fair, liquidity is deep, and the plumbing works. The JSE’s latest flirtation with 24-hour trading, seemingly in mimicry of the Nasdaq and New York Stock Exchange’s restless pursuit of round-the-clock markets, shows a fundamental misdiagnosis. The problem isn’t the 5pm close. It’s that SA’s listed universe is shrinking.
Twenty years ago Africa’s largest exchange hosted about 450 companies. Today it’s closer to 300, down from about 850 in the 1990s. Delistings have hollowed out the market, leaving the top five companies — Prosus, BHP, AB InBev, British American Tobacco and Richemont — accounting for half of the JSE’s R20.9-trillion market cap. Expand to the top 20 and they dominate 80%.
Liquidity tells the same story. In 2023 the top 40 made up 83% of daily traded value, about R19.2bn. The small- and micro-cap segment, which is 70% of listings by number, barely scraped 2% of total trades, about R334m a day. Asset managers can’t meaningfully buy or sell smaller companies without distorting their prices.
The reasons for this exodus are depressingly familiar: high compliance and reporting costs, the burden of short-term performance expectations, and easier access to capital abroad through dual listings. The result is a dangerously concentrated market, with fewer opportunities for active managers and an increasing shift of SA capital offshore.
Yet the JSE’s answer is to stretch the trading day. With a quarter of its listings dual-listed, the argument goes, investors need “real-time” access to respond to global events. And because crypto trades 24/7, equities should too. But as The Economist noted recently, extended hours promise flexibility while eroding market quality.
Liquidity, already thin in off-peak hours, would be even scarcer overnight. Even now most trading clusters around the opening and closing auctions, when price discovery is sharpest. By contrast, midnight markets wheeze, with yawning bid-ask spreads and jumpy prices. That’s a gift to professionals with algorithms and dark pools, and a trap for retail investors.
Second, there is the question of infrastructure. Markets, like human bodies, need rest to recover and repair. Post-trade processes such as settlement, clearing and reconciliation are conducted in the very hours the JSE now wants to fill with frenetic activity. When does the plumbing get fixed? When does risk get tallied? Even the most sophisticated exchanges, such as the New York bourse, understand that a pause is a practical necessity. Extending hours may simply mean pushing risks into the shadows, rather than addressing them.
Most importantly, the JSE’s obsession with trading hours distracts from its existential challenge, which is delistings. I can count about 20 potential buyout or delisting targets on the JSE right now. For small- and mid-cap firms, the cost of compliance and listing outweighs the benefits. No amount of 24/7 trading will convince these companies to stay. What SA needs is not an insomniac exchange but a vibrant one, in which companies see value in raising capital publicly and investors can trust that their capital is protected and productive.
A market that chases activity for its own sake, trading for the sake of trading, risks forgetting its true purpose, which is to allocate capital efficiently and fairly. To put it more plainly, no-one delisted because they couldn’t trade at 3am.
Let the Nasdaq and Robinhood cater to the sleepless speculators.
PKI’s “Nothing to see here” letter doesn’t answer the real questions
Prime Kapital Investments (PKI) has written directly to MAS shareholders defending its €1.40-a-share voluntary bid and dismissing the MAS independent board’s red-flag warnings, published late on Friday. On paper it’s a confident rebuttal, but it’s also a study in answering the questions you wish had been asked, rather than the ones that have been.
The letter is heavy on legality. PKI tells shareholders that the offer complies fully with Maltese law, MAS’s articles of association, and the development joint venture (DJV) agreement. The JSE, it points out, has already confirmed it has no jurisdiction to review the DJV documents. That’s all true, but “compliant” is not the same as “transparent” or “in the best interests of minorities.”
Then there’s timing. PKI argues that the bid’s broad terms were disclosed back in May, and that it has “engaged extensively” with shareholders since. But it’s easy to be generous with time when you’ve always had full access to the DJV’s inner workings. Rival suitor Hyprop, and minorities, were forced to rely on summaries, which is an uneven playing field however you dress it up.
The pitch is also financial. PKI foghorns its 51% cash premium to the May 15 share price and 62% premium for those taking preference shares. But the base price itself has been ground down by years of governance drag, structural opacity and market scepticism. Anchoring a premium to that number is like boasting about running a personal best on a downhill course with the wind at your back.
PKI’s most interesting defence concerns +its preference shares. The letter calls them “over-collateralised” because PKI has no debt pre-bid and would hold MAS shares as assets. What it doesn’t highlight is that the prefs are in effect backed only by MAS stock, making their value circular and dependent on the same governance that minorities distrust. Add the fact that they are issued out of the Isle of Man, and you have an enforcement headache if anything goes wrong.
PKI’s offer may tick every legal box, but its letter sidesteps the deeper questions of why minorities should trust a counterparty that has resisted full disclosure for years.
At this stage, PKI’s control of the narrative stems from its access to information others don’t have. Without regulatory intervention before August 14 the decision for minorities will hinge less on valuation and more on trust, a scarce commodity in this saga.
• Avery, a financial journalist and broadcaster, produces BDTV’s ‘Business Watch’. Contact him at michael@fmr.co.za.
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