JSE welcomes clarity on listings

Johannesburg - The confirmation in Wednesday's budget speech that any change to the classification of foreign-listed companies on the JSE will not be retrospective is a welcome development, the bourse said.

"The JSE welcomes the confirmation in today's budget speech that any change in the classification of foreign companies listed on the JSE will be forward looking only and will not affect the current status of foreign companies listed on the JSE," it said.

Finance Minister Pravin Gordhan announced the move to finalise the prudential regulatory framework on foreign exposure in his budget speech to parliament.

The Treasury indicated it intended to hold consultations on how best to define foreign and local assets for the purposes of prudential regulation, the JSE said.

This shed light on the classification of the existing dual listed companies known as the “London Five”, which included some of the largest companies listed on the JSE.

"We are pleased that the ‘London Five' will continue to be treated as domestic listings,” said JSE CEO Russell Loubser.

Trade in these five companies – Anglo American [JSE:AGL], BHP Billiton [JSE:BIL], SABMiller [JSE:SAB], Old Mutual [JSE:OML] and Investec [JSE:INL] – made up 9% of all shares traded, 11% of the total number of trades and 24% of all value traded on the JSE in 2010.

The classification of listed companies as domestic or foreign is important as it determines how South African investors are able to invest in them, the JSE said.

“The exchange supports Treasury's gradual relaxation of exchange controls and recognises the significant steps taken in this regard over the past number of years," said Loubser.

“It is important that finality is reached, so that South Africa is able to attract more foreign listings ... so that the country can play a meaningful role as a gateway for investment into African markets.”