A2X scholarship, supported by Patrice Motsepe, plans to break even by 2023


A2X CEO Kevin Brady. Photo: Bois d’Elvire

South Africa’s A2X stock exchange, created four years ago, backed by African Rainbow Capital Investments of billionaire Patrice Motsepe, expects to break even by 2023 as trading on secondary listings it offers takes off .

The value of stocks and funds on the Johannesburg-based platform has more than doubled to R5 trillion in the past 12 months, with Prosus and Investec among the last to complete their secondary listings on A2X.

September’s record trading levels were five times higher than in August, CEO Kevin Brady said in an interview.

“We have two brokers who already trade transparently in the markets, which impacts activity levels and trading for asset managers,” Brady said. “Most asset managers in South Africa are now starting to get executions on A2X, including Ninety One, Allan Gray, the Public Investment Corporation and others.”

The successful challengers seek to reduce the dominance of the Johannesburg Stock Exchange over shares traded in South Africa, offering fees about 50% lower than those of operator JSE Ltd. while praising their use of the latest technology. The Cape Town Stock Exchange began operations earlier this month, while A2X now offers 56 stocks.

Johannesburg’s main stock exchange still has a strong lead over potential competitors, with A2X’s market share in Prosus stock trading reaching 5% last month, for example. And not all new players are blossoming: In August, regulators suspended ZAR X’s trading license for failing to meet liquidity and capital adequacy requirements.

Brady said A2X’s license terms have been broadened to also include secondary listings from other alternative exchanges in South Africa, not just the JSE, as well as incoming listings from offshore exchanges. TWK Agri Pty., The first company to be listed on the Cape Town Stock Exchange, expects a secondary listing on A2X by the end of the year, he said.

He will be considering major listings in the future, according to Brady, who described Motsepe’s African Rainbow Capital as “a key shareholder”.

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