Philip Mohr
In preparation for a trip to Cape Town I telephoned the Johannesburg Stock Exchange and was surprised to find that their million rand computer systems could not provide certain basic details on listed companies.
For instance, how many listed companies are based in the Western Cape and what value of the total market capitalisation do these represent? The JSE’s press department was unsure who dealt with this type of information. Eventually they transferred the call to something they referred to as ”research.”
”Why do you want to know something like that?” I was asked. ”Anyway, we don’t keep that kind of statistic, but is it really important to know the names of some 20 listed companies based in this region?”
Actually, it is! My own research — which involved wading through the JSE Handbook and looking up the address of every single one of the 638 listed companies — revealed that there are 91 listed companies based in the Western Cape, totalling nearly R85-billion worth of
So, why the interest, since this still represents only 13 percent of the companies listed on the JSE and only 11 percent of the value of all shares listed?
A similar exercise with the 1990 JSE Handbook provides some startling statistics. In that year, there were some 800 companies listed on the JSE, of which nearly 200 were based in the Western Cape. This represents 25 percent of all listed companies. What happened to these companies since 1990?
Analysts contacted for comment were alarmed by such statistics. Some believed that these figures should have increased, particularly as a mass exodus of professionals has taken place to the coast since the unbanning of the African National Congress in 1989.
After due consideration analysts assert that the reduction in the number of listed companies in the region has nothing to do with liquidations or bankruptcies, but with an important rationalisation process which included the delisting of some divisions.
However, it does represent crucial corporate finance developments which should be carefully monitored.
For instance, the clothing industry is an important contributor to employment levels for the region, yet retailer Lenco’s delisting of Amshoe and House of Monatic seem to have gone unnoticed. In the process Lenco has become an investment company listed under the industrial holding sector of the JSE and has since seen its share price rise from 260 cents to its present 1125
And, other important corporate finance deals included Engen’s split from Gencor, the growth of Pepkor — following its complete acquisition of Checkers and the disastrous union negotiations carried out last year by Pick ‘n Pay, which saw its share price drop to an all time low. These are indeed factors which are important for shareholders, yet there seems to be a total lack of interest in Western Cape companies.