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Delisting Crisis - Op-ed series in the Daily Maverick

Updated: Jan 31

By: Paul Miller - Updated with an additional op-eds

There has been lots of commentary recently about companies leaving the local public market. I have found that much of it was pretty perfunctory. Either that, or written by vested interests who were trying to reassure their investor client base that there was still lots of local investment opportunities.

Mid-cap and smaller companies are delisting. On this at least I think we can all agree.

So I thought I'd back myself and put my own views out there. I wrote five opinion pieces over the last two months or so, which the Daily Maverick was kind enough to publish.

To be clear, I have vested interests of my own - amongst other things I want new mining companies to be able to raise money on local public markets, build mines and employ people in South Africa.

These are the pieces:

We should all encourage the JSE to make itself more attractive to new listings, but we should also consider the negative role played by the policymakers in the National Treasury and the lobbyists that seem to have the National Treasury in the thrall of SA’s largest investment institutions.

South Africa’s public market is broken. The number of listed companies has more than halved, with a further 20 already expected to delist in 2022. We need to start fixing it.

In 30 years, the number of listed companies on the JSE has dropped from 760 to 330 — it’s time to de-institutionalise our markets.

South Africa’s public capital markets have become increasingly institutionalised over the past 30 years and the number of listed companies is declining.

We have reached a point where most of those responsible for more than 81% of all institutional funds in SA have washed their hands of companies with market capitalisations of below R11bn or so — the approximate cut-off for the largest 100 companies.

The JSE’s announcement earlier this month that it would terminate the listing of Nutritional Holdings’ securities is not, on the face of it, that significant. The company appeared to be in a world of distress and no serious investor would be sorry to see it go.

I was then invited by Michael Avery to discuss the pieces further on his radio show - Hot Business on Hot 102.7 FM.

And this is an excerpt from a wider ranging interview I had with podcaster and youtuber David Ansara.

I invite you to read the articles and listen to the discussion, and please critique any of the opinions I've expressed. Please also pass it on to any colleagues who may be interested.

If you have different ideas of your own please consider also writing a piece. We need to collectively work on this problem if South Africa is to have dynamic, lively markets that return to serving one of their important social purposes, which is to provide primary capital to growing businesses to invest in the local economy.

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