The linked-unit price of Madison Property Fund Managers, the first property asset management company to list on the JSE, performed moderately well after listing on the main board on Wednesday morning.
With fears the US central bank will increase interest rates for the 17th successive time, emerging markets, including SA, have been volatile over the past few weeks.
Listed property stocks along with other JSE asset classes have suffered price drops. Uncertainty over an interest rate hike in SA ahead of Thursday's monetary policy committee has added to the jitters.
But Madison, which manages listed property funds ApexHi Properties, Hyprop Investments and Redefine Income Fund with a combined market capitalisation of R15bn and enterprise value of more than R20bn, got off to a relatively solid start.
After listing at R5,00 the price of Madison's linked units increased 5% to a high of R5,25 before settling down in the R5,15 band. This is 3% higher than the listing price.
Prior to listing Madison raised a total of R650m through a private placement and limited public offer.
Madison executive director Wolf Cesman said Madison had come to market in "conditions characterised by a strong appetite for listed property and higher yielding investments, as demonstrated by the oversubscription for linked units prior to listing".
Cesman said the Madison listing project had taken seven to eight months to complete.
"You can never time a listing perfectly. We're very pleased we reached where we did and we are optimistic about the future," he said.
Marc Wainer, another executive director at Madison, said that they were "not in business for one day".
"We're in for the long term and we look forward to a happy association with the JSE," he said.
The listing of Madison also introduced black economic empowerment into the company, with KwaZulu-Natal-based in- vestment company Clearwater Capital, a black- owned and controlled group, owning 10,6% of the total number of linked units in issue.
The board of directors consists of executive directors - Wainer and Cesman - and three non- executive directors: Harishkumar Kantilal Mehta, Monica Khumalo and Bernard Nackan.
Angelique de Rauville, MD of Investec Listed Property Investments, said the timing of the listing had not been ideal but it was beyond the company's control.
"Last night the global markets were under pressure and the JSE is following that trend today. From a local point of view the monetary policy committee meeting being held this week has contributed to the timing not being ideal," said De Rauville.
She said Madison was an interest-rate sensitive stock and that this did not bode well for the performance of the linked unit price on Wednesday.
But De Rauville said they did not think interest rates would be increased today and that this might result in further strength in unit price.
"We don't expect it to trade below its listing price of R5,00. Once stability is achieved in global markets and based on the assumption that Reserve Bank governor Tito Mboweni doesn't increase interest rates, we believe there is an upside to be had from an investment in Madison."