Cape Town Stock Exchange ‘unlikely to upset well-established JSE’

While the planned establishment of the alternative Cape Town Stock Exchange (CTSE) might have positive spin-offs in the Western Cape, it was unlikely to upset the well-established Johannesburg Stock Exchange (JSE), founded in 1887 and with a market capitalisation estimated at about R14 401 billion.

The 4 Africa Exchange (4AX) is now rebranding itself as the CTSE – one of the country’s two licensed and regulated stock exchanges – and has announced moving its offices in Parktown to the Woodstock Exchange Building in Woodstock, Cape Town.

Not perturbed by the CTSE posing a competitive threat, JSE chief executive Leila Fourie said she welcomed competition in the South African market, as it was “a key ingredient to a vibrant and flourishing economy”.

Said Fourie: “The JSE is an experienced exchange, recognised globally by the World Federation of Exchanges as being a worldclass venue for capital raising and investing.

“In the face of new competition, we have risen to the challenge and continue to grow our suite of products and services. More than 99% of all trading in South Africa takes place on the JSE.

“The JSE values all geographic hubs that make up the South African capital markets ecosystem.

“Cape Town, in particular, is a large hub for the local market and we have had a presence there for four years dedicated to supporting and servicing clients in the region,” she said.

Leading economists on Monday said although Cape Town stood to gain from the CTSE presence, it was too early for the new exchange to make serious inroads.

Said economist Mike Schussler: “For the JSE, the knock-on effect is very small, except positively impacting on many things on the sidelines, like making Cape Town being known more and more as a financial centre.

“While a lot of asset managers are there, the challenge has been that they did not have a stock exchange.”

University of Johannesburg economist Peter Baur said the exchange would take time to grow.