Cape Town is getting its own stock exchange – with seven listed companies
- Alternative stock exchange 4 Africa Exchange (4AX), a rival to the JSE is rebranding to become the Cape Town Stock Exchange (CTSE), as the group will be relocating.
- It only has seven listed companies, but plans to double this number in the next few months.
- It is looking to list companies from across South Africa and Africa.
- The City of Cape Town and the Western Cape are happy to host it.
- For more stories go to www.BusinessInsider.co.za.
Alternative stock exchange 4 Africa Exchange (4AX), a rival to the JSE is rebranding to become the Cape Town Stock Exchange (CTSE), as the group will be relocating to a new head office in Cape Town.
4AX, which is one of two licensed and regulated stock exchanges in SA, with both an equity and debt listing licence, will move from its offices in Parktown, Johannesburg, to the Woodstock Exchange Building, in Woodstock, Cape Town.
The move is part of its efforts to differentiate itself by basing itself in a city that it says is reflective of its own inventiveness.
"We're looking forward to making our home in one of the world's favourite cities. Much like our business, Cape Town is synonymous with growth, innovation, and a focus on technological development, so we know it's going to be a great fit," says the group's CEO Eugene Booysen.
The region is putting a lot of effort into becoming the technology capital of SA through the Silicon Cape movement, and as Booysen puts it, "that's a vein we want to tap into."
He adds that the shift is also part of its effort to intensify its focus on small-and medium-sized companies. "We believe that these growing enterprises offer huge potential to investors. They and the people who make them tick, are this country's real assets."
Though being a home for small- and mid-sized listed companies has been one of its goals since its launch in 2017, 4AX has not managed to attract many companies. It only has seven equity listings.
Booysen says this will be changing quickly as it expects to double the number of listings by the end of this financial year. Aside from more listings, he also expects its debt marketplace to gain some traction.
He notes that the move to Cape Town also brings it closer to the head offices of several institutional investors, many of which are based in the city. He does not think it will be too much of a challenge to get these institutional players, like pension funds, to invest in CTSE listed companies as several of them are already invested in companies on the exchange.
Though the exchange will from 1 October 2021 be Cape Town based, it will not necessarily mean it will be aiming to just list companies that are based in the Mother City. Far from it. Booysen says it wants to be the exchange of choice for growth businesses across the country and the content.
"We are looking for growth companies. Companies that are going to redefine the South African and the African landscape over the next ten years."
Happy with the support
Booysen says when it came to setting shop in Cape Town, he can't fault the local authorities' efforts in supporting its transition.
For its part, the city and the province are happy to host the exchange.
"The opening of the CTSE in the province signifies Cape Town's capabilities when it comes to landing significant business for the region, reinforcing our place as the financial services hub on the continent," says Yaw Peprah, acting CEO of Wesgro, the official investment and trade promotion agency for Cape Town and the Western Cape.
Peprah adds: "The service economy contributes an estimated 75.5% to the Western Cape's GDP and this move is critical for medium- to large -sized businesses. The CTSE will provide a platform for existing funders to gain exposure to quality assets as well as enhanced investment opportunities."
"As Africa's Tech Capital, we have the ecosystem to support tech-led, innovative business solutions and we're proud that the continent's new international stock exchange will be headquartered in Cape Town."
Get the best of our site emailed to you every weekday.
Go to the Business Insider front page for more stories.