January 19, 2004

By Edward West

Cape Town - Last year was not a good one for new business on the JSE Securities Exchange, as there were 54 delistings and only 10 new listings, but 2004 started off better than last year, Russell Loubser, the president of the JSE Securities Exchange, said yesterday.

Loubser said the high number of delistings versus the low number of new listings was a trend evident at most stock exchanges last year.

The reasons for this were the bear market and the fact that bourses were still suffering from a shakeout of companies that had listed in the late 1980s and early 1990s - companies that "probably should not have listed in the first place".

He said the shakeout was near an end. In addition, tighter listing requirements and rules requiring sponsors to apply annually to be able to sponsor new listings meant there was much less chance of unsuitable companies listing.

The South African and global economies were in far better shape now than this time last year, which boded well for more listings this year.

David Sylvester, the chairman of the Shareholders Association, said the market started off the year buoyant, indicating there might be more listings this year than last year.

Part of the reason for the low number of new listings last year, other than the weak market, were perceptions of the high cost of maintaining a listing and the high costs of the regulatory environment, he said.

The first new listing last year was engineering group John Daniel Holdings, which listed no fewer than 5.6 billion shares on February 3 on the venture capital board. The share price opened at 3c but spent most of 2003 at 1c.

Harry Minnie, a spokesperson for the company, said it had been a bad time to list. 

However, the aims of the listing - to establish a platform for the trading of the shares, enhance the corporate profile of the company and raise capital - had been realised.

Minnie said the still-pending introduction of the Altx board for small listed companies had taken away "what little steam there was left in the venture capital board" in terms of investor interest.

John Daniels' strategy now was to concentrate on its business. It intended moving onto the Altx board by July 30.

While John Daniel Holdings listed among the largest number of shares on the market, a company that raised a few eyebrows because only 1.5 million of its shares were placed was oil explorer Exxoteq, which listed on November 5.

The company, which plans to exploit capped marginal wells in Africa, came to the boards at R5 but the stock has fallen to only 95c a share.

Coronation Fund management listed on June 13 - supposedly a bad luck day in common folk lore but the share has bee one of the most successful listings of the year.

It closed at R3.35 on the first day, rose to about R3.70 two weeks thereafter, fell to R2.70 by mid-October and has since risen to R4.15.

Investec Bank listed some non-cumulative, non-redeemable preference shares on August 13 to raise R1.5 billion to bolster its tier one capital requirements. The value of each preference share has risen to R107 from R100 at listing.

Other listings were Telkom on March 4, CCN Holdings on April 17, Alpina Investments on August 18, MICC Property Income Fund on October 9, Emira Property Fund on November 28 and BidBEE on December 1.