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Security Dealing Activities industry South Africa

Security Dealing Activities industry in South Africa 2020

Alex Conradie | South Africa | 23 April 2020

Security Dealing Activities Industry in South Africa 2016

Ebrahim-Khalil Hassen | South Africa | 07 July 2016

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Introduction

According to Stats SA, the security dealing sector had an estimated turnover of R9.5bn in 2018, while its net profit after tax and dividends was an estimated R1.6bn. However, challenging macro-economic conditions compounded by rising labour and compliance costs continue to have a significant effect on the performance of the security dealing sector in South Africa.

Strengths

• Large multinational companies and South Africa’s largest banks are active in the sector.
• The security dealing sector is well established.

Weaknesses

• Several multinational firms have closed or downscaled their local operations, leading to decreased competition in the sector.

Opportunities

• More business in sub-Saharan Africa due to the region’s projected population and income growth.
• The use of innovation and new technology is reducing costs.

Threats

• Increasing cost of labour and compliance.
• Low profit margins, as the weak economy leads to low trading volumes, and fewer mergers and acquisitions and initial public offerings.

Outlook

Vunani said in its latest annual report that if the economy does not improve, stockbroking firms can expect a difficult period ahead, while FNB Wealth and Investments’ Wayne McCurrie believes that, in that scenario, it is likely that more multinational investment banks will close their local security dealing operations. It is expected that the security dealing sector will experience a decline in earnings due to lower economic growth as a result of the coronavirus pandemic.

Security Dealing Activities industry in South Africa
Security Dealing Activities industry in South Africa 2020

Full Report

R 1 900.00(ZAR) estimated $103.15 (USD)*

Industry Landscape

R 1 330.00(ZAR) estimated $ 72.20 (USD)*

Historical Reports

Security Dealing Activities Industry in South Africa 2016-07-07

R 1 900.00(ZAR) estimated $103.15 (USD)*

View Report Add to Cart

Table of Contents

[ Close ]
PAGE
1. INTRODUCTION 1
2. DESCRIPTION OF THE INDUSTRY 1
2.1. Industry Value Chain 1
2.2. Geographic Position 3
3. SIZE OF THE INDUSTRY 3
4. STATE OF THE INDUSTRY 4
4.1. Local 4
4.1.1. Corporate Actions 9
4.1.2. Regulations 11
4.1.3. Enterprise Development and Social Economic Development 12
4.2. Continental 13
4.3. International 14
5. INFLUENCING FACTORS 15
5.1. Economic Environment 15
5.2. Rising Costs 16
5.3. Technology, Research and Development (R&D) and Innovation 16
5.4. Environmental Concerns 17
5.5. Labour 17
6. COMPETITION 18
6.1. Barriers to Entry 18
7. SWOT ANALYSIS 19
8. OUTLOOK 19
9. INDUSTRY ASSOCIATIONS 20
10. REFERENCES 20
10.1. Publications 20
10.2. Websites 21
APPENDIX 1 22
Summary of Notable Players 22
COMPANY PROFILES 28
A TRADE (PTY) LTD 28
ABSA STOCKBROKERS AND PORTFOLIO MANAGEMENT (PTY) LTD 29
ANCHOR STOCKBROKERS (PTY) LTD 31
ANGLORAND SECURITIES (PTY) LTD 33
AVIOR CAPITAL MARKETS (PTY) LTD 35
CITIGROUP GLOBAL MARKETS (PTY) LTD 37
DEUTSCHE SECURITIES (PTY) LTD 39
FNB STOCKBROKING AND PORTFOLIO MANAGEMENT (PTY) LTD 41
INVESTEC SECURITIES (PTY) LTD 43
J P MORGAN EQUITIES SOUTH AFRICA (PTY) LTD 45
JSE LTD 47
KHUMO SECURITIES (PTY) LTD 51
LEGAE PERESEC CAPITAL (PTY) LTD 52
MERRILL LYNCH SOUTH AFRICA (PTY) LTD 54
MOMENTUM SECURITIES (PTY) LTD 56
NEDGROUP PRIVATE WEALTH STOCKBROKERS (PTY) LTD 58
NVEST SECURITIES (PTY) LTD 60
PRESCIENT SECURITIES (PTY) LTD 62
PSG KONSULT LTD 64
PURPLE GROUP LTD 68
RENCAP SECURITIES (PTY) LTD 71
RMB MORGAN STANLEY (PTY) LTD 73
RMB SECURITIES (PTY) LTD 75
SA STOCK BROKERS (PTY) LTD 77
SANLAM PRIVATE WEALTH (PTY) LTD 79
SASFIN SECURITIES (PTY) LTD 82
SBG SECURITIES (PTY) LTD 84
TAQUANTA SECURITIES (PTY) LTD 86
THEBE STOCKBROKING (PTY) LTD 88
UBS SOUTH AFRICA (PTY) LTD 89

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.

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.

Introduction

This report focuses on security dealing activities, which involve the buying and selling of equities or shares in companies and other financial instruments, in South Africa. The Johannesburg Stock Exchange, now known simply as the JSE, has been the only stock exchange in South Africa since 1958. Market capitalisation of the JSE was estimated at R14-trillion in June 2016, making it the biggest stock exchange in Africa, and it is ranked 17th in the world by the World Federation of Exchanges. This dominant position could be challenged locally by the launch of ZAR X, which has received regulatory approval from the Financial Services Board to operate. In addition, two more companies are seeking regulatory approval, indicating that South Africa may have four stock exchanges in the near future. The implications of new exchanges competing with the JSE are too early to accurately assess, but represent the biggest change the industry has experienced since 2013.

Strengths

• Established relations between JSE and other exchanges internationally.
• World class financial system.

Weaknesses

• Currency volatility, which impacts the value of commodity-based shares.
• High fees in the sector.
• Lack of a mechanism for start-ups to raise capital on stock exchange.
• The dominant position of the JSE.

Opportunities

• Consolidation of West African trading platforms.
• Establishment of new, smaller exchanges serving different markets.
• More affordable systems available for citizens to participate in shares.

Threats

• Global political and economic upheavals, as evidenced by the Brexit decision.
• Increased consolidation by larger stock exchanges makes smaller exchanges less relevant. The impending merger of London Stock Exchange and Deutsche Börse is an example.
• Political choice in South Africa may lead to a rating downgrade to ‘junk status.’

Outlook

The South Africa security dealings industry is on the cusp of a major change, with three possible new entrants. The mere optimism of three new entrants suggests that there is room for more listings and for growth of the sector. In this sense, the South African security dealings industry reflects an optimistic outlook with arguments that niche markets might be profitable. At the same time, further consolidation internationally and on the African continent is likely to increase the size of stock exchanges. If a large European merger occurs, this will fundamentally change dynamics, as the largest companies will have less incentive to invest in emerging markets. Locally, analysts assert that stock exchanges will need to provide an enabling environment to support equitable ownership of shares, and will need to respond to political pressure for greater fairness in the ownership of these shares.

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Security Dealing Activities Industry in South Africa
Security Dealing Activities Industry in South Africa 2016

Full Report

R 1 900.00(ZAR) estimated $103.15 (USD)*

Industry Landscape

R 1 330.00(ZAR) estimated $ 72.20 (USD)*

Historical Reports

Security Dealing Activities industry in South Africa 2020-04-23

R 1 900.00(ZAR) estimated $103.15 (USD)*

View Report Add to Cart

Table of Contents

[ Close ]
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