Gauteng Business 2017-18 edition

OVERVIEW
A2X will offer secondary listings
platform for JSE-listed companies
and aims to cut costs for investors.
African Rainbow Capital (started
by Patrice Motsepe) is an investor
in A2X.
4 Africa Exchange (4AX) expects
to start trading in the second
half of the year. 4AX will focus on
companies with market capitalisation
of up to R8-billion. Agricultural
trading company NWK is a shareholder
in this venture.
The newcomers all promise
to use the latest technology to
make trading simpler, quicker
and cheaper.
Banks
No fewer than three new banks
are set to make their debuts
on the South African market.
On top of that, life insurer MMI
Holdings is entering a partnership
with African Bank to enable it to
start taking deposits and loaning
money. It intends to create a
R10-billion loan book.
All the new banks come
from state enterprises: Ithala,
Postbank and a Human
Settlements Development Bank.
The Ithala Development Finance
Corporation is an enterprise
funder in KwaZulu-Natal that has
applied for a banking licence.
In 2016 Postbank (part of the
South African Post Office, SAPO)
received a first-level licence.
Once a board of directors has
been appointed and a company
formed, the Reserve Bank is likely
to grant the full licence. The current
Postbank focusses on taking
deposits and savings accounts.
Postbank has secured a R3.7-billion loan to enable it to open its own
loan book.
Three state entities are merging to create the new Human
Settlements Development Bank: the National Housing Finance
Corporation, the Housing Loan Fund and the National Urban
Reconstruction and Housing Agency. The focus will be on financing
housing for poorer households and for large state-funded housing
projects. Part of the drive is to integrate cities better and to combat the
legacy of the spatial divide that apartheid left behind. Private sector
investment will be sought.
For many decades, South Africa had a retail banking Big Four –
Standard Bank, Nedbank, Absa/Barclays and First National Bank. All of
them have a strong presence in the province, but they have recently
been joined by Capitec Bank as a major player in the retail market.
Banks are working hard to offer products to the previously unbanked.
Nedbank has partnerships with shops such as Boxer Stores
and Pick n Pay where customers can have access to financial services
in previously unserviced areas and also on all days of the week such
as public holidays and Sundays.
Standard Bank’s community-banking initiative offers a low-cost
cellphone-banking service. Retailers can act as agents for the bank,
even in very remote rural areas. Shops such as Shoprite, Pep and Spar
are connected, as are certain spazas.
Merchant banking and investment banking are the most competitive
sectors with companies such as BoE Private Clients, Rand Merchant
Bank and Investec prominent. Investec, a company which engages with
capital markets, private banking and asset management, is dual-listed
in Johannesburg and London.
The insurance market has become more varied over time, with a
greater variety of products now available to more market segments,
including middle-income earners. A typical example of a specific product
that is responding to new realities is Old Mutual’s iWYZE medical
gap cover, designed to pay the difference between what a medical aid
scheme is willing to pay and what the hospital or doctor is charging.
CONTACT INFO
Auditor-General South Africa: www.agsa.co.za
Banking Association South Africa: www.banking.org.za
Financial Services Board: www.fsb.co.za
Insurance Institute of South Africa: www.iisa.co.za
Insurance South Africa: www.insurance.za.org
JSE Limited: www.jse.co.za
Post Bank: www.postbank.co.za
South African Institute for Chartered Accountants:
www.saica.co.za
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