JSE makes debut on own bourse

After almost 120 years as a private company, the now public JSE was listed with a market capitalisation of just more than R2 billion. In line with other demutualised exchanges, the JSE’s share price has experienced a sharp increase of late. Noah Greenhill, the JSE’s business development manager, said the share price had risen from R30 in July last year when it started to trade over the counter, to R250 a share by close of trade last week. By yesterday morning there had been a 10-for-one share split, leaving the stock valued at R25 apiece with 83,4 million shares in issue. Loubser said it had taken 10 years of planning to get the exchange to the point of listing. The JSE, which houses almost 400 listed companies with a total market capitalisation of R4,2 trillion, is the second large exchange to list this year after the New York Stock Exchange listed in March. Hand in hand with the listing came the JSE’s empowerment deal. As Loubser explained, the deal has two components. The first component entails a skills development aspect that will result in a 2 percent dilution for current shareholders. To this end, a trust was set up with an initial capital of R400 000, which will be used to benefit students at the Johannesburg-based CIDA City Campus. The second component of the empowerment transaction encompasses a black-shareholder retention scheme whereby any black shareholders of the JSE on March 28 this year will be entitled to another 2 percent of the JSE at an 80 percent discount, if they are still holding the original shares in five years. Yesterday was not just about the listing, however. It was almost 10 years to the day that floor trading in the old Diagonal Street offices came to an end, and it was almost exactly a year since the JSE’s demutualisation. Deputy President Phumzile Mlambo-Ngcuka said: “Today’s event shows that our economy is growing, not just the listed companies.” At the next quarterly meeting, to determine the 160 companies large enough to make it into the all share index, the newly listed JSE is likely to make the cut. Whether or not it will make it onto its own SRI index, the triple bottom line sustainability index that was launched in 2004, will only be revealed when the index is updated next year. The JSE closed its first day on the boards down 6,73 percent at R24,25 having traded 341 256 shares. ‘ Business Day.

June 2006
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