South African Companies Raise Capital On Frankfurt Stock Exchange, Why Don’t You?
Plenty of successful South African companies have listed instruments and securities onto the Frankfurt Stock Exchange. However, this is not a true picture of all the South African and African assets listed on the Frankfurt. Many companies incorporate in the US, UK, and elsewhere and list with the African assets within the company, which then makes sense why there is so few Africa and Australian firms (6%) and much more European and North American firms, aside from the obvious, the European and America’s markets are relatively large (Combined 80% of the Frankfurt Listings.) Much of this one done to show the precieved value of North American and European management behind the listing, its more stable and accountable in the hands of Directors you can go and talk to, versus in Africa which is what most thought before the crisis.
More so than ever before for South African Companies there is an opportunity at hand, where by the 80% of the market listed in the Western Nations has lost credibility and the Rand is growing in strength and the Country has proven stability and resources through-out the crisis. The funds that traditionally are invested into North American, Europe, and the America’s in general are looking for new places to invest, such as Asia, Africa, and Eastern Europe. The potential for larger gains exists within these markets as Western Economics find turmoil, the value of these markets grow and undoubtedly will become inflated at some point in the future, which is what the investors are hoping to bet on.
Why South Africa?
The market is mature in South Africa, with a stable financial regulator (JSE and FSB) who has done a very good job at educating the market. The Banking sector is mature and well controlled, and the resources are rich. However, from the list of companies one can see on the exchange and within their foreign listings in Frankfurt and abroad, the entrepreneurial infrastructure of South Africa is probably one of the best in all of Africa if not the best. (From the Micro-Finance and available debt and investment infrastructure to the talent pool, education, training, and access to cheap labour still in the service markets.) This is by far a Country where a return on investment for entrepreneurship is visible and proven. In addition, the South African melting pot connects their market undoubtedly to a global market, reaching into strong trading partners in Europe, the Middle East, Asia, Africa, and North America. The African market is still very much available, and a frontier of which many otherwise well invested and capitalized companies are having difficulties reaching the larger market because capitalization has been difficult up until now. Now that the financial market has become more global, the South African market has become more stable, the World Cup of 2010 creating the showcase of modern Africa has come, the time is now for South African companies to list overseas and take advantage of the ability to bring in foreign investment through foreign listings.
Companies that have listed financial instruments in the past in Frankfurt include:
AFR1: ABSA GRP LTD, AFRICAN BANK, ANGLO PLATINUM LTD, ANGLOGOLD ASHANTI, ARCELORMITTAL STH AFRICA, ASPEN PHARMACARE, BARLOWORLD, DATACENTRIX HOLDINGS, DATATEC LTD, DRDGOLD LTD, EXXARO RES LTD, FIRSTRAND LTD, GOLD FIELDS LTD, HARMONY GOLD MNG, IMPALA PLATINUM, IMPERIAL HOLDINGS, JD GROUP LTD, KUMBA IRON ORE LTD, LIBERTY HLS, METOREX LTD, MTN GROUP, MVELAPHANDA RES, NASPERS LTD, NEDBANK GROUP LTD, NEW BIDVEST, NORTHAM PLATINUM, OMNIA HOLDINGS LTD, PALABORA MINING CO LTD, PICK’N PAY STORES, PRETORIA PORTLD, RAINBOW MINERALS, RAUBEX GROUP, REMGRO LTD, REUNERT LTD, RMB HOLDINGS, SANLAM, SAPPI, SASOL, STD BANK GROUP, STEINHOFF INTL, TELEKOM SA, TIGER BRANDS, TONGAAT-HUELTT, AFR0: AECI LTD, AFRICAN OXYGEN LTD, AVENG LTD, BELL EQUIPMENT LTD, BLUE LABEL TELE, BSI STEEL LTD, CHEMICAL SPECIAL. RC, Distribution + Warehousing, FREEWORLD COATINGS, GROUP Five LTD, HULAMIN LTD, MAZOR GROUP, MERAFE RES LTD, MIX TELEMATICS LTD, MONDI LTD, MURRAY ROBERTS, OPTM COAL HOLDINGS, SHOPRITE HOLDINGS LTD, VODACOM GROUP PTY, VUNANI CAPITAL, WILSON BAYLY HOL.
The reality is that as a South African company trying to access the European market for investment and the global market, you do not need to be one of these companies, you can list as long as you have the capital-in investment requirement of 250,000 euro and have the budget to file the listing fees, etc. The structure can be designed and implemented within 3-5 weeks and your firm will be trading on the Frankfurt Stock Exchange. You also don’t have overwhelming costs with only one filing per annum required, with an estimated total cost of around 5,000 euro per annum.
It is often argued by smaller stock markets such as the Johannesburg Stock Exchange, Philippines Stock Exchange, or even larger markets like the Australian Stock Exchange, Toronto Stock Exchange, etc, that what is the use of having a public company if you can’t raise the capital. The reality is that the Frankfurt Stock Exchange is the third largest financial market in the world for a reason, the money is there… Its often the thinly traded market countries who become shy to list because of bad experiences on their own local markets of bearing the overwhelming costs of listing and then falling short on their expectations of financing. The monthly, quarterly, and yearly costs encumber the assets of the company and debt piles up with broken promises and lost opportunity. That is the world of the small cap markets in the illiquid market you are faced with locally. The reality is, that even the largest markets in the world, such as the US, UK (London), and Asia all list aggressively in Europe to increase the retail market for their companies stock and or for financing businesses.
The only reason why a business would not list on the Frankfurt Stock Exchange would be truly the lack of experience in global markets and finance. It is a well known fact by the largest companies in your market that there is capital available in Europe. The fears of not raising capital are not real when compared to the success of others from other markets who manage to raise millions of euro in Europe in the exact same businesses that exist in your market.
The reality is that there is still a huge market for South African, Australian, and Asian companies who don’t have a standard to compare their volume of investment to in their own Countries (Accept for India).
If you are a South African, Australian, New Zealand, Philippines, Vietnam, China, Japan, Korea, Malaysia, Thailand, Brazilian, or any other company in the Southern Region, Africa, or Asia regions of the World, than you have local markets that are mature enough to give your business the professional financial experts locally, but now you need to expand to the European Market, and the third largest global market in the world. Every business and region has its differences, but the general box that is provided to you includes:
Initial Frankfurt Stock Exchange Listing Package includes:
• Initial consultation and application for the Frankfurt Stock Listing
• Press release announcing your company’s Frankfurt Stock Exchange approval
• Specialist setup & maintaining of the electronic Order Book on your company’s shares
• Issuance of an ISIN number.
• Routing and processing of bid and ask orders
• Clearing and tracking of the electronic register
• Real-time quotes with Worldwide access from all European financial portals (in Java)
• Monitoring of new threads of leading Financial Community Message Boards in Europe including
Comdirect.de, Wallstreet-online.de, CortalConsors.de, financial.de, etc. Once your company is approved for trading it will enable you to increase investor awareness across the EU resulting in the ability to raise additional funds through equity sales.
Next Steps: Fill-in the attached documentation Click Here
Begin raising 1 – 100 million euro for your business! info@fselistings.com