The Johannesburg Stock Exchange (JSE)’s African Board is currently in talks with a number of Zimbabwean firms, which are at different stages of listing on the continent’s largest bourse, most probably in the coming year, an official has said.
The firms include public miners, manufacturers, hoteliers and private entities. At present, only two Zimbabwe-domiciled companies are listed on the African Board, namely Cafca Limited and Hwange Colliery Company Limited.
Geoff Musekiwa, JSE’s business development manager for the African desk, however said the number would soon increase with the first of the pipeline initial public offerings (IPOs) expected in the market early next year.
“We are talking to a number of Zimbabwean companies which want to list on the JSE,” Musekiwa said. “It’s a process which has been going on since last year.
“It has taken this long because there are a lot of considerations and the timing has to be right.”
Zimbabwe-domiciled companies that have openly declared they would consider listing on the JSE in the near term include African Sun Limited and RioZim Limited.
Many more local companies have opted for offshore dual listing to raise funds required to recapitalise their operations after a decade of inexorable economic downturn, as opposed to local equity offerings, which have so far disappointed.
“Zimbabwe is still not the best place when you are looking for capital. The potential is huge but transactions are relatively small-scale at this stage,” said Bruce Dickinson, a partner with Webber Wentzel Attorneys that advises on projects and transactions in many African countries.
Since dollarisation in February last year, the Zimbabwe Stock Exchange has had nine equity offerings, most of which have seen underwriters taking over control of the companies owing to under-subscription.
The JSE launched the African Board early last year to cater for emerging African companies, with the wider goal to promote the growth of capital markets on the continent.
“We will allow companies from around Africa to tap into Johannesburg for funding,” Musekiwa said.
“But they will remain with the home bourse. Our point is to provide secondary listing.
“There is capacity for mining companies to list at the pre-production stage for as long as an exploration project has gone through the feasibility study stage and obtained a Competent Persons Report (CPR) to confirm that reserves can be valued.What is important is certainty of reserves.”
“There is a panel called a Review Panel that reviews the CPR that ascertains inferred and actual reserves before they can approve a listing.” The JSE has a total market capitalisation of $800 billion and is ranked the deepest capital market in Africa.