Security Dealing Activities in South Africa
The South African Security Dealing Sector
This report focuses on security dealing activities, which involve the buying and selling of equities or shares in companies and other financial instruments from 2013 to 2016. The Johannesburg Stock Exchange, now known simply as the JSE, has been the only stock exchange in South Africa since 1958. In April 2016, it had 384 companies listed: 316 local and 68 foreign-owned companies. Market capitalisation of the JSE was estimated at R14-trillion in June 2016, making it the biggest stock exchange in Africa, and the 17th-largest in the world.
A highly rated sector
The security dealings sector forms part of South Africa’s highly rated Financial Services sector. In the World Economic Forum’s 2015-16 Global Competitiveness Index, South Africa was ranked first out of 140 countries for financing through the local equity market, and second for the regulation of security exchanges.
Growing competition
The dominant position of the JSE could be challenged by the launch of three new exchanges. ZAR X has already received regulatory approval to operate from the Financial Services Board, while 4AfricaExchange (4AX) and A2X recently submitted their applications to the board. The implications of these new exchanges competing with the JSE are too early to accurately assess, but represent the biggest change the industry has experienced since 2013.
Report coverage
The Security Dealing report describes the local industry, focusing on the significant challenges in the last two years related to the political situation, as well as the JSE’s role in economic transformation. Factors influencing the success of the sector, including the impact of recently introduced regulations, are also discussed. The JSE and 20 other role players are profiled. The companies range from major players such as PSG Konsult Ltd and Sanlam Private Wealth (Pty) Ltd to smaller entities such as Peregrine Securities (Pty) Ltd, a stock brokerage with a niche focus on hedge and private funds.
Table of Contents
| PAGE | ||
|---|---|---|
| 1. | INTRODUCTION | 1 |
| 2. | DESCRIPTION OF THE INDUSTRY | 1 |
| 2.1. | Geographic Position | 3 |
| 2.2. | Industry Value Chain | 3 |
| 3. | SIZE OF THE INDUSTRY | 5 |
| 4. | STATE OF THE INDUSTRY | 11 |
| 4.1. | Local | 11 |
| 4.1.1. | Corporate Actions | 13 |
| 4.1.2. | Regulations | 15 |
| 4.1.3. | Enterprise Development and Social Economic Development | 16 |
| 4.2. | Continental | 18 |
| 4.3. | International | 19 |
| 5. | INFLUENCING FACTORS | 21 |
| 5.1. | Economic and Political Environment | 21 |
| 5.2. | Government Initiatives | 22 |
| 5.3. | Technology, R&D and Innovation | 22 |
| 5.4. | Labour | 23 |
| 5.5. | Environmental Concerns | 23 |
| 6. | COMPETITION | 24 |
| 6.1. | Barriers to Entry | 24 |
| 7. | SWOT ANALYSIS | 26 |
| 8. | OUTLOOK | 26 |
| 9. | INDUSTRY ASSOCIATIONS | 27 |
| 10. | REFERENCES | 27 |
| 10.1. | Publications | 27 |
| 10.2. | Websites | 28 |
| APPENDIX 1 | 29 | |
| Table 4: Detailed description of JSE products and services | 29 | |
| APPENDIX 2 | 34 | |
| Table 5: Listings on the JSE (2013-2016) | 34 | |
| APPENDIX 3 | 39 | |
| Table 6: De-listings on the JSE (2013-2016) | 39 | |
| COMPANY PROFILES | 45 | |
| ABSA STOCKBROKERS (PTY) LTD | 45 | |
| CITIGROUP GLOBAL MARKETS (PTY) LTD | 47 | |
| DEUTSCHE SECURITIES (PTY) LTD | 49 | |
| FNB SECURITIES (PTY) LTD | 51 | |
| INVESTEC SECURITIES (PTY) LTD | 53 | |
| J P MORGAN EQUITIES SOUTH AFRICA (PTY) LTD | 55 | |
| JSE LTD | 58 | |
| MERRILL LYNCH SOUTH AFRICA (PTY) LTD | 62 | |
| MOMENTUM SP REID SECURITIES (PTY) LTD | 64 | |
| NEDGROUP PRIVATE WEALTH STOCKBROKERS (PTY) LTD | 66 | |
| PEREGRINE SECURITIES (PTY) LTD | 68 | |
| PRESCIENT SECURITIES (PTY) LTD | 70 | |
| PSG KONSULT LTD | 72 | |
| PURPLE GROUP LTD | 75 | |
| RENCAP SECURITIES (PTY) LTD | 78 | |
| RMB MORGAN STANLEY (PTY) LTD | 80 | |
| RMB SECURITIES (PTY) LTD | 82 | |
| SA STOCK BROKERS (PTY) LTD | 84 | |
| SANLAM PRIVATE WEALTH (PTY) LTD | 86 | |
| SASFIN SECURITIES (PTY) LTD | 89 | |
| UBS South Africa (Pty) Ltd | 91 |
