Johannesburg Stock Exchange Offers Relief to Companies

By Adedapo Adesanya

South Africa’s bourse, the Johannesburg Stock Exchange (JSE), has announced that it will offer temporary relief to its listed companies in financial distress because of the impact of the coronavirus crisis.

In a statement released on Monday, it said in addition to the relief, it would also be cutting fees for new listings and providing extended payment terms.

The COVID-19 lockdown measures in the country has put pressure on businesses and has since led to an increase in companies filing for business rescue from the South African Government.

Speaking on the measure put in place by the Africa’s biggest stock exchange, the Group Chief Executive of JSE, Mrs Leila Fourie, said, “The small cap counters are among the most vulnerable in strained markets.

“The discounts we are announcing for these market segments are aimed at stimulating liquidity and supporting this vital growth node of our economy.”

Identifying this, JSE said it will grant distressed companies extended payment terms of between three and six months with no interest charged.

It will also offer a 50 percent fee reduction for trading, clearing, and settlement in all companies listed on the JSE AltX (its alternative board for smaller companies to raise capital and BEE (black economic empowerment) Board for the remainder of 2020,.

The JSE is also reducing listing fees by 25 percent for those small companies and AltX companies looking to tap the market to raise secondary capital.

In addition, the bourse said it will increase the amount of cash disbursements returned to small and medium stockbrokers that are on the JSE’s Enterprise Development Programme.

The scheme was first introduced by the JSE in 2016 to increase participation of black business owners in the exchange.

The JSE is estimated to have over 450 listed companies and a market capitalisation of over $1 trillion.

The exchange provides a market where securities can be traded freely under a regulated procedure. It not only channels funds into the economy, but also provides investors with returns on investments in the form of dividends.