AltX is an alternative segment at the Johannesburg Stock Exchange for small and medium-sized businesses to catalyze their growth. This public exchange gives companies an option to list on the Johannesburg Stock Exchange (JSE) when they are not ready to register on the stock market’s mainboard. JSE’s AltX has the highest migration rate globally, with 38 firms having moved from Altx to JSE’s main board since its inception in October 2003.
As of the end of April 2019, the board had a total Market capitalization of Ksh122.8 billion (R18.09b) having raised KSh435 billion (R64.24 billion) since its launch. At the moment, it offers a cost-effective alternative listing featuring affordable effective and annual listing fees to its 44 companies.
JSE simplifies listing on its securities through its fast track listing process. The process offers an accelerated listing for international companies admitted on major stock exchanges for at least 18 months. The process takes as short as 3-6 weeks, with no pre-listing statement required. For example, Alphamin Resources benefited from AltX fast track listing and successfully concluded a KSh5.7 billion (R849.8 million) private placement.
AltX listing requirements
AltX allows companies to access benefits of listing on the JSE such as access to deep capital pools with rather modest requirements. Companies are required to have KSh13.5 million (R2 million) worth of capital before listing on the board. Moreover, the companies need a designated advisor and two transaction categories with a threshold of 50%. AltX requires a 10% shareholder spread and charges an annual listing fee of KSh230,000 (R34000). Lastly, AltX requires all directors to attend the directors’ induction program before listing.
Unlike the main board, listing on AltX does not require the company to have any pre-tax profit history for that matter. Besides, the listing option offers a voluntary publication in the press, unlike the main board which requires compulsory press publication.
Providing an alternative listing platform for smaller companies allows JSE to extend listing to more companies. Perhaps, smaller exchanges across Africa should follow JSE’s example to increase the number of listed companies.
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