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    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

    Report Info

    Report Summary Table of Contents
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    Report Coverage

    This report on security dealing in South Africa, including trade in equities, bonds, currencies and derivatives, contains information on the major exchanges, major players and their performance and corporate actions. There is information on the size and state of the industry, challenges, cryptocurrency, fraud, trends such as online trading, delistings and passive investment, hedge funds and AI. It includes profiles of 42 companies in the sector such as exchanges like the JSE and the Cape Town Stock Exchange, major financial service group-linked companies such as Sanlam Private Wealth, SBG Securities, JP Morgan Equities and RMB Securities, brokers such as Peresec, Kela Securities and Anchor Stockbrokers, and crypto exchanges including Luno and VALR.

    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.
    • The value of shares traded declined in the first few months of 2024, following an almost 10% decline in 2023.
    • The industry is experiencing consolidation, with the top 10 brokers on the JSE continuing to increase their share of trade value.
    • Local markets have been affected by a series of crises, from loadshedding to poorly functioning rail and ports.
    • 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.
    • As fees are squeezed, more brokers are likely to mix brokerage activities with asset management.
    • An increase in retail products such as online platforms is expected.
    • Investors indicated they were bullish on South African equities.
    • Trade in cryptocurrency is growing, and several exchanges and investment companies are working with the financial industry to offer crypto assets to the public.

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

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    Industry Landscape

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    Security Dealing Activities in South Africa 2020-04-23

    R 1 900.00(ZAR) estimated $103.78 (USD)*

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    Security Dealing Activities in South Africa 2016-07-07

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    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 103
    NEDGROUP SECURITIES (PTY) LTD 105
    NVEST SECURITIES (PTY) LTD 106
    PERESEC PRIME BROKERS (PTY) LTD 108
    PRESCIENT SECURITIES (PTY) LTD 110
    PSG FINANCIAL SERVICES LTD 112
    PURPLE GROUP LTD 117
    RAND SWISS (PTY) LTD 120
    RMB MORGAN STANLEY (PTY) LTD 121
    RMB SECURITIES (PTY) LTD 123
    SA STOCK BROKERS (PTY) LTD 125
    SANLAM PRIVATE WEALTH (PTY) LTD 127
    SASFIN SECURITIES (PTY) LTD 130
    SBG SECURITIES (PTY) LTD 132
    SINAYO SECURITIES (PTY) LTD 134
    TRIVE SOUTH AFRICA (PTY) LTD 136
    TSB SECURITIES (PTY) LTD 137
    UBS SOUTH AFRICA (PTY) LTD 138
    VALR (PTY) LTD 140

    Report Coverage

    This report focuses on Security Dealing Activities in South Africa, including comprehensive information on the size and state of the sector, influencing factors, corporate actions and developments. There are profiles of 30 companies, including the JSE and brokers that are its members. There are profiles of large stockbroking firms including Citigroup, Investec Securities, JPMorgan, Legae Peresec, Merrill Lynch, RMB Morgan Stanley, SBG Securities and UBS. There are also profiles of companies such as Anchor Stockbrokers, in which Masimong Group Holdings bought a stake and Avior Capital Markets which was bought in 2020.

    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.

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

    Full Report

    R 1 900.00(ZAR) estimated $103.78 (USD)*

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    Industry Landscape

    R 1 330.00(ZAR) estimated $ 72.65 (USD)*

    Buy Now +

    Historical Reports

    Security Dealing Activities in South Africa 2024-07-09

    R 20 000.00(ZAR) estimated $1092.45 (USD)*

    View Report Add to Cart

    Security Dealing Activities in South Africa 2016-07-07

    R 1 900.00(ZAR) estimated $103.78 (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 $103.78 (USD)*

    Buy Now +

    Industry Landscape

    R 1 330.00(ZAR) estimated $ 72.65 (USD)*

    Buy Now +

    Historical Reports

    Security Dealing Activities in South Africa 2024-07-09

    R 20 000.00(ZAR) estimated $1092.45 (USD)*

    View Report Add to Cart

    Security Dealing Activities in South Africa 2020-04-23

    R 1 900.00(ZAR) estimated $103.78 (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

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