Jacques Magliolo
THE Johannesburg Stock Exchange’s tougher attitude in cleaning up our bourse is becoming more evident in the number of companies being delisted and suspended from trading. Between June 1993 and June this year 30 companies were taken off the JSE boards and a host of others could face a similar fate.
In addition to the 19 companies already delisted this year, eight more have been suspended from trading, which is close to the 11 suspended in the previous two years. Once the exchange stops a company from trading, it is seldom allowed to start again.
An assessment of these companies shows that there is indeed a strong possibility their listings will be terminated. Analysis indicates that five out of the eight suspended companies are about to be terminated.
South Roodepoort Main Reef Areas is being placed under liquidation, a management crisis at Penrose makes it vulnerable to a takeover, Revere Resources is being investigated by the JSE and two companies (Persetech and Roychem) asked for suspension.
The last two are due for company restructuring, which ultimately encompasses the repurchase of shares from minority shareholders and eventual delisting. Statistics show that in the first six months of this year 10 companies were delisted because of a change in structure, four were placed under liquidation and five were suspended for late submission of financial results.
JSE director of operations Neil Carter says: “Company delistings in the past year were mostly a result of unbundling and we should now see stability in the net number of company delistings.” He believes that a “small increase in new listings” will take place in 1995. This takes into account an anticipated surge in company restructuring due to new listing requirements expected in January 1995.
Frankel Pollak Vinderine industrial analyst Trevor Pearton agrees: “We could well see a lot more listings as the industrial cycle reaches its peak late next year.”
In the nine months of this year new company listings have increased almost every month. While only one company, New Republic Bank Ltd, listed in February, five companies listed in August. These include Bonnita, New Africa Investments Ltd, Griffin Shipping, Houseware Group and Harvest Securities.
Pearton adds that delistings have been a result of simplification of group structures, companies growing through acquisition (delisting target firms) and the JSE taking action against those not supplying financial information on time.
Companies which have delisted as a result of restructuring include OK Bazaars, Elcentre Corporation and Free Gold’s OFS Investments and Welkom Gold Holdings.