JSE Capital Raising Reaches 9-Year High On SA Firms Africa Expansion

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Written by Kevin Mwanza

From Bloomberg

Companies listed on the Johannesburg Stock Exchange (JSE), operator of Africa’s largest equity and bond markets, raised the most money from share sales in at least nine years in 2014 to fund expansions outside their home market.

Equity sold on the JSE jumped 58 percent this year to 147 billion rand ($13 billion), the most since at least 2005, according to data provided by the JSE in an e-mail on Dec. 19. The bourse had 23 companies list their securities this year, eight of which were real-estate businesses, the data show.

“A lot of companies raised capital so they could do acquisitions in other markets,” said Donna Oosthuyse, director of capital markets at the JSE. “The rate of economic growth in South Africa is below what our corporates are seeing in some other markets.”

Companies including Woolworths (WHL) Holdings Ltd., a clothing and food retailer, and Steinhoff (SHF) International Holdings Ltd. are making purchases that expand operations outside of Africa’s second-largest economy to escape the slowest pace of growth since the 2009 recession. Property businesses led the number of initial public offerings after the JSE last year changed listing requirements to allow for Real Estate Investment Trusts.

“Real estate is an industry that is popular with investors,” Oosthuyse said by phone on Dec. 12. “It’s a sector that gets good coverage in terms of analyst support.”

The FTSE/JSE SA Listed Property Index gained 19 percent this year, outpacing a 7.4 percent increase in the FTSE/JSE Africa All Share Index. (JALSH) Pivotal Fund Ltd. (PIV), a property investment and development company, listed on Dec. 8, followed a day later by Acsion Ltd., which swelled the number of real estate companies to 51 with a combined market value of about 544 billion rand.

Read more at Bloomberg