Trustco enjoying listing on JSE Africa Board

TRUSTCO’S daily performance on the Johannesburg Stock Exchange (JSE) since listing on the JSE’s Africa Board in February has exceeded its daily performance on the Namibia Stock Exchange (NSX) for that period more than tenfold.

According to Tamsin Freemantle, Research Analyst for the Africa Board, Trustco’s performance on the Board has been ‘very positive’, though the performance of stocks in general have been depressed globally.
‘In this market, Trustco has traded an average of 8 392 shares per day since listing on 19 February this year. They have traded 715 shares per day for the same period on the NSX,’ she says.
Trustco is currently the only company listed on the JSE’s Africa Board, was launched in February to promote the growth of capital markets on the African continent. Companies trading on the Africa board are dual listed on their home exchange and on the JSE.
This dual-listing model has, however, been criticised for by the Nigerian and Nairobi stock exchanges who worry that this model would threaten the livelihood of their own stock exchanges with the ‘serious danger of our markets disappearing overnight’. The head of strategy and new products at the Nigerian exchange, Farooq Oreagba, said the idea of creating a pan-African board based on the JSE proposal would ‘never work politically’ and would benefit only the JSE.
But Freemantle says the Africa Board is ‘happy’ with Trustco’s performance. ‘They have positioned themselves nicely to take advantage of increased confidence in investor sentiment.’
Trustco MD Quinton van Rooyen says: ‘The dual listing on the JSE Africa Board enables Trustco to maintain its inherently Namibian character and identity while venturing into the African Market and beyond.’
Within the time that Trustco has been trading on the JSE, the share price has fluctuated between 71 and 76 cents, and a total of 268 570 Trustco shares have been traded at a total value of N$195 863.
Van Rooyen himself describes the Group’s performance on the JSE Africa Board as successful, saying ‘the company sought the Africa Board listing primarily for purposes of exposing its equity to a market which would be conducive to price fluctuations.’
Trustco has yet to raise any capital on the JSE, but Van Rooyen reasons that ‘Trustco did not approach the market for purposes of a capital raising exercise but rather in view of exposing our shares to a liquid market.’
The Group, which currently has a market capitalisation of about N$523 million, is undergoing an ambitious drive titled the ‘the five over five concept’, in which it plans to increase its market capitalisation to N$5 billion over the next five years.
‘The Africa board listing is the pivotal step in reaching our goal of acquiring a market capitalisation of N$5 billion within the next five years. Merger and acquisition activities are set to follow, we intend to raise capital in the form of equity and debt as the projects materialise,’ Van Rooyen says.
Of the Africa Board’s own growth, Freemantle says it has been exploring different areas of interest, and is pursuing further listings.
Asked whether the Board had achieved its own performance objectives to date, she noted that prior to the launch, the JSE Africa Board had said that the ‘strategy this year was to consolidate and build on what we have done thus far. It is an exploratory phase for us. We are looking to have further listings in the next 18 months. We are comfortable with the progress we have made in this regard.’
Trustco, which recently received a N$15 million loan from the Development Bank, has already announced to shareholders on the JSE that it expects an increase in earnings of between 15 and 35 per cent with headline earnings increasing by between 40 and 60 per cent. To shareholders on the NSX, the Group announced that it expects material earnings of between 10 and 30 per cent, with headline earnings expected to exceed 30 per cent. Overall revenue is expected to have increased by 65 to 75 per cent compared to the previous financial period.
nangula@namibian.com.na