Outbreak of Optimism in South Africa May Spur IPOs, Bourse Says

By Neo Khanyile
February 21, 2018, 11:55 AM EST
Africa News

‘Some good IPOs in the pipeline,’ CEO Newton-King says
JSE Ltd. had ‘challenging year,’ cut its staff by 24%

The operator of Johannesburg’s stock exchange expects improved sentiment following Cyril Ramaphosa’s election as South African president to encourage companies to sell shares in initial public offerings this year.

Ramaphosa, who succeeded Jacob Zuma last week, is expected to oversee improved management of Africa’s most-industrialized economy. Bourse operator JSE Ltd., which handled 21 new listings in 2017, could see some of that positivity materialize in IPOs and new exchange-traded funds, Chief Executive Officer Nicky Newton-King said in an interview on Wednesday.

“When things are more positive, then entrepreneurs and boards of directors feel more inclined to come to the public market,” Newton-King said. “We never talk exactly on this, but we’ve got some good IPOs in the pipeline and some interesting ETFs. But let’s see when they come to market.”

The South African rand has gained 12 percent against the dollar, more than any other major currency, since Ramaphosa won a contest to lead the ruling African National Congress in December. Last week was the Johannesburg benchmark stock index’s best in more than eight years as the new president was sworn in.

The JSE will receive a further boost when Old Mutual Plc, the insurer that started in South Africa more than 150 years ago, ends the primary listing it has had in London since 1999 in exchange for one in Johannesburg, Newton-King said. “We’re soon going to welcome Old Mutual, so that’s going to be really nice to have them come home.”

She spoke after the bourse operator reported results for a “challenging year” in which operating revenue fell 5 percent to 2.2 billion rand ($189 million) and it cut staff by 24 percent to 364, according to a filing.