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security dealing activities south africa

Security Dealing Activities in South Africa 2024

Stephen Timm | South Africa | 09 July 2024

Security Dealing Activities in South Africa 2020

Alex Conradie | South Africa | 23 April 2020

Security Dealing Activities in South Africa 2016

Ebrahim-Khalil Hassen | South Africa | 07 July 2016

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Introduction

• The stockbroking industry is facing challenging times due to a decline in trade volumes and values on the JSE, due in part to the delistings trend and negative market sentiment. \r\n
• The value of shares traded declined in the first few months of 2024, following an almost 10% decline in 2023. \r\n
• The industry is experiencing consolidation, with the top 10 brokers on the JSE continuing to increase their share of trade value. \r\n
• Local markets have been affected by a series of crises, from loadshedding to poorly functioning rail and ports. \r\n
• However, several investors reported that they are bullish on South African equities.

Trends

• Advice and training to retail clients is growing in importance.
• AI is helping traders to place trades and to better assist clients.
• Cryptocurrency is gaining acceptance, but exchanges globally remain wary.
• Delistings continue apace.
• Increasing demand for sustainability-linked investment products.
• Interest in government bonds is growing.
• Investors are moving from active to passive investing.
• Retail investment is growing, driven by an increasing number smartphones and trading apps and online trading platforms.
• Social media has made investment analysis accessible.
• Stablecoins are growing in popularity to de-risk from bitcoin volatility.
• The number of stockbrokers is likely to decline as trading volumes on the JSE have declined significantly in 2023.
• The percentage of black investor clients of stockbrokers has increased substantially.
• There has recently been a significant net inflow into hedge funds.

Opportunities

• Expanding to offer financial services alongside stockbroking services.
• Offering retail trading clients advice and training.
• Research on small and mid-caps listed on local exchanges.
• Selling cryptocurrency products.
• Selling sustainability-linked investment products.
• Selling trading products to more black clients.
• Using AI to create robo-advisors and to execute trades.

Challenges

• Analyst coverage of listed companies, particularly small and mid-caps has declined.
• Delistings and the decline in the value of listed companies’ shares due to the slowing economy.
• Fraud is a major challenge particularly in cryptocurrency.
• Increasing risk of cyberattacks on exchanges.
• JSE trade volumes have fallen dramatically in recent months.
• Only a few local stockbrokerages are black-owned.
• Several multinational firms have closed or downscaled their local operations, leading to decreased competition in the sector.
• South Africa’s greylisting has affected capital raising and stockbrokers from signing on new clients.
• The performance of local exchanges has been affected by the poor local and global economic environment.

Outlook

• Local stockbrokers are at a crossroads, where their numbers are likely to decline given waning investment sentiment, delistings, and declining trade volumes.\r\n
• As fees are squeezed, more brokers are likely to mix brokerage activities with asset management. \r\n
• An increase in retail products such as online platforms is expected. \r\n
• Investors indicated they were bullish on South African equities. \r\n
• Trade in cryptocurrency is growing, and several exchanges and investment companies are working with the financial industry to offer crypto assets to the public.

Security Dealing Activities in South Africa
Security Dealing Activities in South Africa 2024

Full Report

R 20 000.00(ZAR) estimated $1107.22 (USD)*

Industry Landscape

R 14 000.00(ZAR) estimated $ 775.05 (USD)*

Historical Reports

Security Dealing Activities in South Africa 2020-04-23

R 1 900.00(ZAR) estimated $105.19 (USD)*

View Report Add to Cart

Security Dealing Activities in South Africa 2016-07-07

R 1 900.00(ZAR) estimated $105.19 (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 2
2.2 Geographic Position 4
2.3 Size of the Industry 5
3 LOCAL 8
3.1 State of the Industry 8
3.2 Key Trends 17
3.3 Key Issues 18
3.4 Notable Players 18
3.5 Corporate Actions 21
3.6 Regulations 22
3.7 Enterprise Development and Social Development 24
4. AFRICA 25
5. INTERNATIONAL 27
6. INFLUENCING FACTORS 30
6.1 Economic Environment 30
6.2 Labour 31
6.3 Environmental Issues 33
6.4 Technology, R&D, Innovation 33
6.5 Input Costs 34
6.6 Cybersecurity and IT Risks 35
6.7 Fraud 36
7. COMPETITIVE ENVIRONMENT 38
7.1 Competition 38
7.2 Ownership Structure of the Industry 38
7.3 Barriers to Entry 39
8. INDUSTRY SUMMARY 39
9. OUTLOOK 40
10. INDUSTRY ASSOCIATIONS 41
11. REFERENCES 41
11.1. Publications 41
11.2. Websites 42
ANNEXURE 1 44
Relevant Legislation 44
APPENDIX 1 51
Summary of Notable Players 51
COMPANY PROFILES 60
A 2 X (PTY) LTD 60
A TRADE (PTY) LTD 62
ABSA CAPITAL SECURITIES (PTY) LTD 63
ABSA STOCKBROKERS AND PORTFOLIO MANAGEMENT (PTY) LTD 65
AFRIFOCUS SECURITIES (PTY) LTD 67
ALTIFY SA DAS (PTY) LTD 69
ANCHOR STOCKBROKERS (PTY) LTD 70
AVIOR CAPITAL MARKETS (PTY) LTD 71
CAPE TOWN STOCK EXCHANGE (PTY) LTD (THE) 73
CITIGROUP GLOBAL MARKETS (PTY) LTD 75
EASYCRYPTO (PTY) LTD 77
FIRST WORLD TRADER (PTY) LTD 78
FNB STOCKBROKING AND PORTFOLIO MANAGEMENT (PTY) LTD 80
INDEPENDENT SECURITIES (PTY) LTD 82
INTEGRATED EXCHANGE (PTY) LTD (THE) 84
INVESTEC WEALTH AND INVESTMENT INTERNATIONAL (PTY) LTD 87
J P MORGAN EQUITIES SOUTH AFRICA (PTY) LTD 89
JSE LTD 91
KELA SECURITIES (PTY) LTD 95
LUNO (PTY) LTD 96
MERRILL LYNCH SOUTH AFRICA (PTY) LTD 97
MOMENTUM SECURITIES (PTY) LTD 99
NAVIGARE SECURITIES (PTY) LTD 101
NEDGROUP PRIVATE WEALTH STOCKBROKERS (PTY) LTD 102
NEDGROUP SECURITIES (PTY) LTD 104
NVEST SECURITIES (PTY) LTD 105
PERESEC PRIME BROKERS (PTY) LTD 107
PRESCIENT SECURITIES (PTY) LTD 109
PSG FINANCIAL SERVICES LTD 111
PURPLE GROUP LTD 116
RAND SWISS (PTY) LTD 119
RMB MORGAN STANLEY (PTY) LTD 120
RMB SECURITIES (PTY) LTD 122
SA STOCK BROKERS (PTY) LTD 124
SANLAM PRIVATE WEALTH (PTY) LTD 126
SASFIN SECURITIES (PTY) LTD 129
SBG SECURITIES (PTY) LTD 131
SINAYO SECURITIES (PTY) LTD 133
TRIVE SOUTH AFRICA (PTY) LTD 135
TSB SECURITIES (PTY) LTD 136
UBS SOUTH AFRICA (PTY) LTD 137
VALR (PTY) LTD 139

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 in South Africa
Security Dealing Activities in South Africa 2020

Full Report

R 1 900.00(ZAR) estimated $105.19 (USD)*

Industry Landscape

R 1 330.00(ZAR) estimated $ 73.63 (USD)*

Historical Reports

Security Dealing Activities in South Africa 2024-07-09

R 20 000.00(ZAR) estimated $1107.22 (USD)*

View Report Add to Cart

Security Dealing Activities in South Africa 2016-07-07

R 1 900.00(ZAR) estimated $105.19 (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.

Read More..
Security Dealing Activities in South Africa
Security Dealing Activities in South Africa 2016

Full Report

R 1 900.00(ZAR) estimated $105.19 (USD)*

Industry Landscape

R 1 330.00(ZAR) estimated $ 73.63 (USD)*

Historical Reports

Security Dealing Activities in South Africa 2024-07-09

R 20 000.00(ZAR) estimated $1107.22 (USD)*

View Report Add to Cart

Security Dealing Activities in South Africa 2020-04-23

R 1 900.00(ZAR) estimated $105.19 (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