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07 February 2012 23:14

New listing requirements: Mike Jones - president and CEO, PGM

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    Some positive comments about the JSE, SA’s regulators and the government.

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    GEOFF CANDY: I was speaking to Mike Jones a little earlier today. He’s the CEO of a company called Platinum Group Metals. They are listed in Toronto. I asked him what he thought about potentially listing in Johannesburg, because it's something that I know Noah Greenhill, when he was at the JSE, was trying to get – to get more listings onto the JSE and to get a lot more junior miners who have projects in South Africa coming on board. We heard Susan Shabangu speaking earlier about wanting more local manufacturing in the country, and clearly the South African government wants to see more miners in this country. He had some positive things to say.
    ***

    MIKE JONES: It's an interesting point you mention, and it's something we have been asked about since we were here in 2002. A very exciting new development in terms of legislation is the liberalisation of the exchange controls and restrictions around foreign shares. And this just happened January 14, interestingly.
        Basically an inward-listed stock now can be considered similar to a South African listed share. There aren't the same restrictions on holding and round-tripping, and even for tax relief you can get rollover relief using an inward-listed share. That's a very sensible change, and actually quite exciting in terms of the globalisation of your share register and potential for inward listing. So, based on that new change, which actually to be honest I just learned about was finalised on this trip, there is a lot of interesting business potential that’s created out of that relaxation of reserve control.
        So once again, just like the Mining Act, the government is doing the right things. They are attracting direct foreign investment and our investment in the Western Limb and the Northern Limb is a direct outcome of the new Act. It actually did what it was supposed to do under use-it-or-lose-it. It brought opening up of the mineral rights to new investors, and in the case of the exchange control changes it again opens up the playing field in a way that hasn’t occurred before. So we are quite excited about that.
        Corporately, we are going to go back to Canada and New York and really think about what we can do now that the changes have been made. They are very exciting.
    ***

    GEOFF CANDY: Peter, he sounded pretty positive. I'm not necessarily saying he’s going to be listing on the JSE, but clearly it sounds like good news.

    PETER MAJOR: Ja, it does. I think we've got to give the JSE and we've got to give the regulators, certainly the government, credit for the last 20 years. Every year there’s just been more and more positive changes to our stock market, and to the regulations involved in…foreign companies to list here. So I think Michael said it very well – he’s summarised it very succinctly. A lot of positive results. They aren't getting credit for it here, and the last thing Trevor Manuel as Treasury Secretary did, he OK’d the legislation that they call flow-through, where you get a double deduction if you invest in exploration start-up type companies here, and small firms taking advantage of that. We just can't get fund management buy-in here – that’s the difficult part. We've got R4trn under management here and people just don’t put the money into these new listings. That's why companies are reluctant to list here – they just can't raise the money by listing here.

    GEOFF CANDY: Well, we'll watch this space and hopefully South African investors will have a little bit more of a market to play in.
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