South Africa’s Johannesburg Stock Exchange (JSE) believes its world-class regulatory environment and active global investor base makes it an attractive listing destination for African mining assets.In the past five years, 16 resource companies (excluding reverse listings) have joined. This brings the total to 69 resource companies listed on the exchange, making up 25% of the exchanges market capitalisation. John Burke, director of the Issuer Regulation Division at the JSE, says the exchange is pursuing resource listings. “Johannesburg started as a mining town and owing to the number of resource assets in South and Southern Africa, investors on this market understand investing in mining. Mining is in our DNA. South African investors have a deep understanding of resource companies and an appetite for investing in them. Where there are known assets and management, you will find a willing buyer.” Business development manager at the JSE, Patrycja Kula, says despite the challenging economic environment worldwide, companies are able to raise capital on the JSE. The message that the JSE shares with companies that have African assets is that there is capital in South Africa. The JSE provides an enabling environment in which South Africans and Africans can benefit from their resources. Kula says capital raising is made easier by the number of global investors who use the JSE to gain exposure to the African continent. Foreign investors are able to enter and exit the market with ease, as well as to remit funds.
Burke acknowledges that current tension in the mining sector plays a role in investor interest in resource stocks, but points out that the JSE engages with business and government on this and other matters.The JSE engages with government though platforms such as Business Leadership South Africa and directly with key ministries, he says. Investors understand that despite the tension, there are also many positives. “We are particularly encouraged by the recent positive signs coming out of the ANCs December 2012 conference, where delegates confirmed their support for the National Development Plan.” Burke says there is good reason why investors would use the JSE to gain exposure to the continent. The South African financial services and legal sectors are on a par with the best in the world and many of the worlds largest investors have presences in South Africa. Travel to most major African capitals is easy, the quality of life in South Africa is high and South African business is increasingly linked to businesses on the rest of the continent. These are all good reasons South Africa is an attractive financial hub for Africa. South Africans are increasingly becoming more interested in investing early in exploration initiatives to maximise returns. Consequently, the JSE exposes its listed companies to investors and will be hosting two investor forums in Cape Town during Mining Indaba . The first aims to educate about investing in mining stocks by explaining the jargon and discussing stages of the mining cycle. The second event showcases the investment potential of JSE-listed mining companies.