Capital Markets
From The Report: South Africa 2013
View in Online Reader
Home to the world’s 19th-largest exchange, South Africa has mature capital markets able to serve not only the domestic economy but also the wider continent. As global risk appetite for emerging market equities returned from mid-September 2012 following concerted interventions by the world’s central banks, South African equities rallied sharply. Bonds also did well in 2012, despite sovereign rating downgrades from two major ratings agencies and macroeconomic imbalances. Its openness nevertheless has also exposed the economy to the volatilities of emerging market portfolio investment. Significant regulatory reform is on the horizon, including the current iteration of the King Code of Governance Principles as well as the “twin peaks” model of oversight. While downside risks remain, the domestic capital markets provide a clear conduit for portfolio investment to Africa and emerging markets.
This chapter contains interviews with Dube Tshidi, Executive Officer, Financial Services Board (FSB); and Stephen van Coller, Chief Executive of CIBW, Absa and Barclays Africa.
Articles from this Chapter
Upbeat sentiments: Market reaches record highs in 2012 despite macroeconomic challenges
Playing by the rules: OBG talks to Dube Tshidi, Executive Officer, Financial Services Board (FSB)OBGplus
Interview:Dube Tshidi What is the rationale behind the implementation of the “twin peaks” regulatory structure? DUBE TSHIDI: The motivation is driven by the fact that a huge part of the population has not been properly educated regarding financial products. By overseeing prudential regulation in addition to market conduct, the FSB has not done enough in its role of protecting the consumer. While the financial soundness of institutions is indirectly a part of consumer protection – as…
A safer financial sector: Strengthening the regulatory frameworkOBGplus
While financial markets in South Africa are already considered among the best-regulated in the world, the system is about to undergo some significant changes as the country transitions to a “twin peaks” model of oversight. The new framework will split regulation into two distinct areas, prudential and market conduct, the former concerned with solvency and liquidity of financial institutions, while the latter is focused on consumer protection. Although some questions remain as to the details of…
OBG talks to Stephen van Coller, Chief Executive of CIBW, Absa and Barclays AfricaOBGplus
Interview:Stephen van Coller How do you explain the mismatch between muted growth and performance of the stock exchange? STEPHEN VAN COLLER: The South African rand, as one of the most liquid emerging market currencies, is used by many investors as an emerging markets proxy. With the Johannesburg Stock Exchange (JSE) rated number one globally in terms of transparency, accessing its companies becomes one of the most attractive ways for global investors to access emerging market dividends and…
Looking for returns: Foreign investors continue to buy up government debtOBGplus
The fixed-income market in South Africa is by far the largest on the continent, accounting for 96% of the value of all African bonds, and it has exhibited significant growth in recent years, with the value of notes in circulation reaching about R1.4trn ($170.7bn) in 2012, up from R650bn ($79.2bn) in 2004. Around two-thirds of this total is accounted for by sovereign issues, with the balance accounted for by state-owned entities (SOEs) and the private sector, at 16% and 20%, respectively. Bond trading…
AngloGold Ashanti: Basic materialsOBGplus
The Company AngloGold Ashanti, with gold production of approximately 4m oz, is the world’s third-largest gold producer by production, with a presence in exploration, mining and marketing. Headquartered in Johannesburg, AngloGold Ashanti has 21 operations in 10 countries. Major development projects are the Tropicana located in Australia, Kibali in the Democratic Republic of the Congo (DRC) and La Colosa in Colombia. The company’s extensive brownfield, greenfield and marine exploration programmes extend to 12 countries, in both established and new gold-producing regions through managed and non-managed joint ventures, strategic alliances and…
Growthpoint: Real estateOBGplus
Portfolio consists of 41 externally managed properties, with a 47:53 split between industrial and office exposure by market value. Through this portfolio, Growthpoint effectively provides more than 5.4m sq metres of retail, office and industrial space to South African and Australian businesses. Despite a weak macroeconomic backdrop and domestic office sector conditions, Growthpoint reported solid growth in distribution per linked unit of 7.2%, to 72.7 cpu for the six-month period which ended on December 31, 2012. Underpinned by fixed rental escalations of approximately 8%, this was bolstered by a weaker exchange rate through its holdings in GOZ…
Kumba: Basic materialsOBGplus
The Company Kumba is a listed iron ore miner and a 65%-held subsidiary of global diversified miner Anglo American, benefitting from group procurement and mine optimisation strategies. Kumba was formed by a demerger in 2001 from South African integrated steel company Iscor and a subsequent demerger of coal mining operations in 2006 to form a separate listed company, Exxaro. Exxaro became the Black Economic Empowerment (BEE) equity shareholder of Kumba’s subsidiary Sishen Iron Ore Company. Kumba’s principal operations currently comprise the Sishen mine (41m tonnes per annum), Thabazimbi (1m tones per annum, but approaching the end of its…
Nedbank: BankingOBGplus
The Company Nedbank is the fourth-largest bank in South Africa, by asset size, providing wholesale and retail banking services, insurance and asset management. Nedbank’s headquarters are in Sandton, Johannesburg and it has branches and representative offices in other Southern African countries and certain global financial centres. Nedbank has been listed on the Johannesburg Stock Exchange since 1969 and on the Namibian Stock Exchange since 2007. Nedbank is one of the largest banks in South Africa; however, it is one of the newest banks to be incorporated in the country. Nedbank was originally founded in Amsterdam in 1888 as the Dutch…
Nedbank: BankingOBGplus
The Company Nedbank is the fourth-largest bank in South Africa, by asset size, providing wholesale and retail banking services, insurance and asset management. Nedbank’s headquarters are in Sandton, Johannesburg and it has branches and representative offices in other Southern African countries and certain global financial centres. Nedbank has been listed on the Johannesburg Stock Exchange since 1969 and on the Namibian Stock Exchange since 2007. Nedbank is one of the largest banks in South Africa; however, it is one of the newest banks to be incorporated in the country. Nedbank was originally founded in Amsterdam in 1888 as the Dutch…
Sasol: Integrated oil & gasOBGplus
The Company Sasol is an integrated oil and gas company with substantial chemical interests, headquartered in South Africa, where it has a leading 35% share of the country’s liquid fuels market. Its core business, historically, is the production of liquid fuels and chemicals from coal using Fischer Tropsch technology. Sasol also found and developed natural gas reserves in Mozambique in partnership with local government. This gas is mainly sent via a pipeline to South Africa where it is also fed into Sasol’s synthetic fuels and chemicals process, as well as being sold into the local industrial market. A major new business development for Sasol…
Woolworths Holdings: RetailOBGplus
The Company Woolworths Holdings is an investment holding company, listed on the Johannesburg Stock Exchange and operates through two subsidiaries, Woolworths (Proprietary) and Country Road, as well as a joint venture – Woolworths Financial Services ( Proprietary). Woolworths (Proprietary) is a chain of retail stores in South Africa and certain countries in Africa and the Middle East. It offers a range of clothing, food and general merchandise, mainly under its own brand name. Woolworths contributes 88.8% to the group turnover and 89.4% of the profit before tax, and comprises the Woolworths Clothing and General Merchandise along with the Woolworths…
