JSE is bleeding: One-in-10 local listed companies forecast to delist this year
|Published
The JSE in Sandton. Picture: Timothy Bernard African News Agency (ANA)
This week social media and posts on Twitter were abuzz with concern over the continued spate of potential delistings by firms on the JSE.
This after US retail giant Walmart announced on Monday that it made an offer to buy 47 percent of shares that it doesn’t already own in Massmart for R6.4 billion. If the offer is accepted, it plans to delist it.
This week Grindrod Shipping was offered R842bn by London-listed Taylor Maritime Investments to buy out the shares it does not already own. This would lead to the delisting of the firm from the JSE if the deal goes ahead.
Last week Rebosis Property Fund said it had filed for business rescue and planned to delist.
In questions sent to Paul Miller, a director at AmaranthCX, yesterday, he said: “The big mover will be how many of the 14 or so zombie suspended companies will be delisted by the JSE this year too. I stand by my point that we are likely to see one-in-10 local listed companies delist this year.”
Business Report in July published a Q&A with Miller titled, “One in 10 listed companies anticipated to delist in 2022”.
He explained that AmaranthCX maintained a database of all South African (SA) company listings and delistings going back to 1995 – across all South Africa’s stock exchanges.
He said South Africa currently was amid a seven-year losing streak averaging about 25 company delistings a year.
“Having started off 2022 with 332 listed companies, the year is looking especially bad with 18 companies having already delisted, and at least another 14 delisting processes already under way.
“Add to this the 16 or so distressed companies that are suspended from trading and which are almost certain to delist at some point, and the accelerating impact of the delistings crisis can be seen.
“This means that more than one in 10 listed companies can be anticipated to delist in 2022. The denominator is shrinking rapidly and soon 25 delistings a year will be very significant in percentage terms,” he said in the Q&A.
The future of the JSE is in the public spotlight as posts from social media can attest.
This week Madima (@MaanoMadima) tweeted: “JSE is bleeding companies. In 1999, JSE had 811 companies listed on the main board. It now has 288 companies listed on the main board. 25 companies delisted in 2021. Some big delisting coming up; Massmart, Grindrod Shipping, Royal Bafokeng Platinum, Distell, PSG, Medclinic.”
Trader Nick (@TraderNick34) tweeted: “The Year is 2050, you hold an investment in the top40 but because of the mass delistings it’s now called the Top2. Its basically NPN and PRX and they just buy each others shares in convoluted schemes to try ramp up the share price.”
J- Masoka (@masoka_j) tweeted: “The same jse where companies are delisting because it diluted share value and is expensive to be part of. Black people who don’t own any means of production must become part of.”
Musawandile Mbelu (@Mr_Mbelu) tweeted: “It might be a dumpster fire but delisting Maasmart (sic) will continue the bleeding that JSE has experienced; not good to lose yet another major corporation.”
Leader of that Thing (@Afriforeal2) tweeted: “Julius Malema and the crew just playing in Parliament and companies are delisting from the JSE 25 delistings in 2021.”
SAIBPP (@saibpp) tweeted: “It is with great concern to note the delisting of Rebosis, founded by Sisa Ngebulana, from the JSE and its subsequent business rescue.”
BUSINESS REPORT