2006/2007 listings: 60% gone

In 2006, the JSE welcomed 18 companies to the Main Board and 19 companies to AltX. In 2007, these numbers were 25 and 37 respectively.

Moneyweb’s analysis includes any companies that transferred from another board (for example, AltX to Main Board) as well as multiple classes of shares (such as the Hospitality Property Fund).

Designated advisors and sponsors definitely made hay in this boom, convincing all sorts of businesses to come to the market.

Who can forget golf course developer Acc-Ross? A number of companies were listed that, in hindsight, were arguably of questionable quality.

Many were sub-scale industrial businesses, caught up in the pre-2010 Fifa World Cup construction bubble which ultimately burst.

Corporate ‘simplification’

Four listings in this period were as a result of the simplification process being undertaken by Anglo American.

Paper and packaging group Mondi was demerged (into dual-listed Mondi Ltd and Mondi plc), while Kumba was unbundled into two separate entities: Kumba Iron Ore and Exxaro Resources. Separately, Hulamin was unbundled from Tongaat-Hulett.

Other resources companies which listed and remain on the JSE (many through the bourse’s inward-listing regime) include Jubilee Platinum plc, Eastern Platinum, Pan African Resource plc, Rockwell Diamonds and MC Mining (originally GVM Metals).

Fewer than 10 industrial or construction-related stocks which listed in the boom remain on the JSE (Raubex Group, South Ocean Holdings, Brikor, ARB Holdings, Kaydav Group, Calgro M3 Holdings, Consolidated Infrastructure Group, enX Group, Stefanutti Stocks).

More than double that number of shares related to the construction sector alone have delisted subsequent to their debuts on the market during the boom.

These include fairly well-known stocks at the time, such as Protech Khuthele, RBA, Chemical Specialities (ChemSpec), Esor and SA French (later renamed Torre).

The JSE itself listed in this period, and other sizeable companies that remain listed are Afrocentric, Afrimat, Blue Label Telecoms, and MiX Telematics. Agriculture-focused company, Zeder, was listed by PSG in 2006.

A host of smaller companies remain listed – including Santova, Workforce Holdings, Silverbridge Holdings, Etion, Imbalie Beauty, Luxe Holdings (formerly Taste), CSG Holdings, Nutritional Holdings, Telemasters Holdings, Huge Group, Ellies and Vunani.

Much is made about the JSE’s current ‘delisting crisis’, but according to the bourse 2006 was the first year since 1998 when “the total number of new listings outstripped the number of delistings on the JSE”.

This means the number of companies listed on the market steadily declined in the near-decade before 2006.

The exchange noted in its annual report in 2007 that of the 40 companies that delisted in the year, “over half did so as a result of a clean-up operation that the JSE has instituted”.

“It is clearing from the boards companies that do not meet listings requirements, including liquidity or minimum share ownership criteria. Many of these companies were listed during the global listings boom of the late nineties.”

Many of the delistings since this boom in the 2000s have been as a result of a similar clean-up operation by the JSE.

This saw the bourse terminate the listings of a number of remnants of what had originally listed, or ‘zombie’ companies, some of which were in the process of being liquidated.

This article first appeared on Moneyweb and was republished with permission.