SIMON BROWN: I’m chatting to Eugene Booysen, CEO of 4AX. They will be rebranding to the Cape Town Stock Exchange at the end of this month.
Eugene, I appreciate the early morning time. The rebranding – you really are trying to position the exchange in Cape Town. Some folks refer to it as the ‘Silicon Cape’. You’ve got a fair bit of activity down there and therefore part of that is to attract new listings and a more exciting sort of Cape-Base, I imagine.
EUGENE BOOYSEN: That’s right. The Cape Town Stock Exchange is for small and medium-sized businesses. We try to focus on that segment – in the R100 million to R2 billion market capitalisation. The rebranding is really about getting better brand recognition for 4AX. I think all the new stock exchanges launched with an AltX, A2X, RX, 4AX – everyone had an X in their name. The X factor I think is more about naming ourselves after the mother city and leveraging the recognition of the city we are in.
SIMON BROWN: You did make the comment in the press release I saw that most exchanges around the world do actually have a city in their name. Some have got a country – I’m thinking of the ASX, the Australian Stock Exchange.
You say you’re aiming at the sort of an R100 million to R2 billion – the small, mid-cap sort of space traditionally – equity and debt, because you have also, I understand, a debt-listing licence.
EUGENE BOOYSEN: That’s correct.
We are the only other exchange with both an equity and a debt-listing licence, and we’re looking to launch our debt marketplace in the first week in October and have our first listing coming on board in that space.
We also have our first Cape listing – another equity listing – that will happen on our launch date on September 30.
SIMON BROWN: So you’ve already got that pipeline because my next question is: what’s going to drive this? The rebranding will get some folks to sit up and have a look. But what’s going to drive the increase in listings to the new Cape Town Stock Exchange?
EUGENE BOOYSEN: We’ve had a pretty healthy pipeline developing over the last six months, and the Cape Town Stock Exchange move is just the last domino in terms of our realising and recognising that pipeline. That pipeline’s healthy from both an equity perspective and a debt perspective. And we’ve got several underlying corporates already committed to the exchange.
SIMON BROWN: You’re focusing here on primary listings. Some of the exchanges have gone for the dual listing. I imagine you would take a dual listing, but your focus is going to be primary listings.
EUGENE BOOYSEN: That’s correct. We work closely with all of our listed companies, not just the big (ones); we believe in having good relationships. And we’ve built a streamlined process for listing small- to mid-size corporates.
Our focus area is primary listings. We believe we’ve got the underlying technology as well to hand-hold those same corporates post listing through all their governance, transparency, managing shareholders, virtual AGMs, to relieve the burden on issuers, not just from the listing prices, but also the post-listing process.
SIMON BROWN: Okay. I was also wondering about that. And I Imagine when you come in as a new exchange you’re going to be not virtual – you are electronic. I makes it a lot simpler. You talk around virtual AGMs and the like. Is it cheaper for a company, or cheaper-ish so that they can manage the costs because a lot of the smaller companies complain about listing fees?
EUGENE BOOYSEN: Our technology is in-house and cloud-based. It makes both listing and trading cheaper, faster, and secure, and it’s on that basis that we are able to recognise quite a high degree of operational gearing, but also pass those costs on to our listed companies.
SIMON BROWN: What about more brokers? That’s one of the issues. My broker – I have a traditional old-school broker – doesn’t offer me access. How are you going to solve that sort of final part of the loop to make it easier for the listeners out there to get involved?
EUGENE BOOYSEN: You hit the nail on the head. When we started the exchange, we started with just a single broker.
We launched the open market on August 23, and we’re now able to integrate with any broker in the South African context.
SIMON BROWN: Are you having conversations with the more traditional brokers to get them on?
EUGENE BOOYSEN: Yes, we are having conversations with numerous (brokers), and we’ll have an additional three brokers by the time the Cape Town Stock Exchange launch takes place.
SIMON BROWN: Excellent. And that is, as you say, at the end of the month. We’ll have, well, an old exchange but one rebranding as a new exchange, the Cape Town Stock Exchange, to get those R100 million to R2 billion (capitalisations). So a nice space there.
Eugene Booysen, CEO, I appreciate your time this morning.
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