Lessons from the JSE: AltX, an alternative exchange for medium-sized companies

AltX is an alternative board 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 security’s main board. JSE’s AltX offers the highest migration rate globally, with 38 migrations 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 listing. At the moment, it offers 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 access benefits of listing on the JSE such as access to deep capital pools with rather modest requirements. A company requires a share capital of KSh13.5 million (R2 million) to list on the board. Moreover, the company needs a designated advisor and two transactions categories with a threshold of 50%. AltX requires a 10% shareholder spread and charges an annual listing of KSh 230,000 (R34000). Lastly, AltX requires all directors to attend a 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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