South Africa’s stock exchanges are set to experience a few delistings in the remainder of the year, which is likely to take the full-year total to at least 32.
Consultancy AmaranthCX reports that South Africa had 332 listed companies at the start of the year, across the JSE and three other stock exchanges in the country that host primary listings.
So far, 18 companies have delisted, including chemicals company Spanjaard, clean energy investment company Hulisani, outsourced services company CSG Group and property companies Arrowhead, Tower Property Fund, EPP and Raven Property Group.
This while 14 companies are in the formal process of delisting or are subject to corporate action that is likely to result in their delisting.
These include digital technology investment company Etion, diversified mining and exploration company Bauba Resources, platinum miner Royal Bafokeng Platinum, wholesale and distribution company ARB Holdings and downstream petroleum products supplier Vivo Energy.
Sixteen companies are currently suspended from trade or have not been able to publish their financial results or are trying to get their listings re-instated. A significant number of these companies are likely to be delisted at some point, says AmaranthCX director Paul Miller.
These include construction engineering company Basil Read Holdings, mining investment holding company Randgold & Exploration, junior exploration companies Sable Exploration and Mining and Union Atlantic Minerals, energy company Resource Generation, chrome miner Chrometco and oil and gas company Efora Energy.
This suggests that at least 32 companies will delist from South African stock exchanges this year.
Miller says the denominator has been shrinking for seven straight years, so this delisting number is “getting very significant in percentage terms”.
There have, however, been six new listings this year – three on the JSE and three on the Cape Town Stock Exchange. Two of the six listings involved transfers between exchanges.
Effectively, only four new listings happened since the start of the year, while there are a further eight listings in the pipeline, although none are guaranteed to proceed.
Miller comments that, while the JSE has ongoing initiatives to cut red tape for companies to trade, there does not appear to be any likelihood of a policy response by the National Treasury to encourage further listings.