SIKI MGABADELI: Vodacom’s black economic empowerment scheme has listed its ordinary shares on the JSE BEE segment. It is the third listing on the JSE’s empowerment segment after MTN Zakhele and Sasol Inzalo.
Joining us now to tell us about the listing and what it means for YeboYethu shareholders is Zarina Bassa, chairman of YeboYethu. Zarina, thanks so much for your time today. Firstly, how did the listing go? Was it all smooth?
ZARINA BASSA: Yes, it all went very well. The trade started at R55.50 and it’s gone back and forth, between R53 and R55 during the course of the day. So, so far so good in terms of the number of shareholders that have registered to trade and who are still registering. We are looking good.
SIKI MGABADELI: And how many have registered? Maybe just take us through the process of communicating to the shareholders about what this process would actually entail.
ZARINA BASSA: There are about 2 000 shareholders that had registered by this morning to trade. The challenge in the process was that albeit they had registered on the over-the-counter exchange, they still had to convert or register again to trade on the Johannesburg Stock Exchange. We’d had an extensive campaign to address that, but we did have a number of the registrations in the last day or two.
SIKI MGABADELI: This is obviously a regulatory requirement, with the FSB shutting down the OTC trading platforms, for example. But in what ways does it actually benefit YeboYethu shareholders?
ZARINA BASSA: I think the obvious one is around increased liquidity. You have access to a much wider range of sellers on the JSE. You have the availability of prices from a print media point of view, from an electronic media point of view, online, etc.
Then there is the degree of investor protection that is available, on the one hand taking into account the segregation of duties between order-taking, placement, money changing hands, etc. And there is the level of surveillance involved.
And then, very importantly for us, we looked at the journey with our shareholders over the last eight years. It was a natural one for us to go with the FSB because our focus has been on grassroots empowerment in raising the level of awareness around financial services, around shares, around investing, time horizons for investment, etc.
And this now will make our shareholders give them the ability to use that knowledge across a wider market in terms of capital markets, not just the YeboYethu shares but access to other shares as well.
SIKI MGABADELI: This is interesting, because I’ve asked it of MTN Zakhele of course, and Sasol Inzalo as well – just when I looked back to when the schemes were started, yours back in 2008 – a lot of those shareholders were people who had never owned shares, had never participated, for example, in the JSE. Over the past eight years, what sort of efforts have you made to kind of educate them in the things you’ve just mentioned now?
ZARINA BASSA: When we have our annual general meeting every year, and every time we’ve had a general meeting, we’ve effectively set aside a whole day that we spend with shareholders. Many of them come from across the country, across from other provinces, they’ve traveled the day before or through the night. They arrive at Vodacom in the morning and we have a couple of hours set aside, one, to cover registrations, updating of administration records, etc, and the other around focusing on a trading point of view that talks about what it means to trade, how do you trade, what is the information that you need, and taking into account the cost involved in trading. So from that perspective not trading in small amounts. So that from a trading point of view.
And then we spend a lot of emphasis covering things like what it means when you come to an AGM and you vote on the appointment of auditors, you vote on the appointment of directors, you vote on approving financial statements. So what all of that means. What are financial statements, what’s an income statement, what’s a balance sheet? When you look at the income statement, how do you assess how the company has been doing?
So we’ve effectively been doing that over the last eight years, and that’s really what I mean around more grassroots empowerment, around building financial capacity and raising the level of financial awareness.
SIKI MGABADELI: The scheme owns 3.4% of Vodacom SA?
ZARINA BASSA: Yes, 3.44%.
SIKI MGABADELI: What sort of plans have you got for the scheme going forward?
ZARINA BASSA: Well, I think importantly the scheme still has another two years to go to mature. This was a ten-year scheme and I’ve always said to investors, unless you desperately need the money, take into account this was a long-term investment. And if you want to optimise on your investment look at where to from here on maturity.
So from a Vodacom and YeboYethu point of view it’s business as usual in a sense. Trading started in 2014 and it will continue now through the JSE until October 2018, when trading becomes unrestricted in the sense that you can then trade widely, not just to black individuals or other black companies. We anticipate that this will significantly increase the liquidity.
And on the other hand, whatever benefits or other opportunities there may be from an empowerment point of view, clearly Vodacom’s intent around empowerment and around transformation hasn’t changed. So YeboYethu will be factored into anything that Vodacom looks at going forward.
SIKI MGABADELI: We’ll leave it there. Thanks to Zarina Bassa.