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ZAR X debuts on Monday and settles first trade in 10 seconds

 

ZAR X made its debut on Monday and settled its first trade in 10 seconds — a buy order for 100 shares in agricultural group Senwes at R10.50 a share.

 

The trade was matched, settled and cleared in 10 seconds, demonstrating how well ZAR X’s platform worked, said CEO Etienne Nel.

 

In 2016, the JSE implemented a four-day settlement cycle known as T+3, making ZAR X’s real-time settlement the quickest in the domestic capital markets and in line with global best practice.

 

"This is the first time in 50 years that a company has listed on a [south African] exchange other than the JSE," Nel said.

 

"This is an exciting moment in our lives. ZAR X has brought new initiative to the market… transforming the competitive landscape in SA," said Francois Strydom, the CEO of 107-year-old Senwes.

 

While Nel did not expect a large volume of Senwes shares to be traded on Monday, he said ZAR X could not have asked for a better first listing, considering the calibre of Senwes.

 

The group, which has a market capitalisation of about R2bn and 25%-27% of its shares in free float, focuses on the supply of equipment, seed, storage facilities and financial services to the agricultural sector. Its 60 silo complexes allow storage of 25% of SA’s grain output.

 

A number of the group’s subsidiaries are in joint-venture agreements with companies such as WesBank, Imperial Logistics and Afgri.

 

Senwes has separately listed Senwesbel, the investment arm of the group, which holds 51.58% of group equity.

 

Jurgen Boyd, the registrar of securities services at the Financial Services Board (FSB), said it was exciting to introduce a new competitor, in the form of ZAR X, into the market.

 

"Competition is always good for any market," Boyd said on the sidelines of the Senwes listing.

 

The FSB had beefed up its staff complement to serve additional exchanges and would continue to uphold the same high standards it always had, he said.

 

ZAR X began its licence application process more than two years ago and was awarded a licence on August 31 2016. A recent appeal against the award of the licence, brought by the JSE and 4 Africa Exchange (4AX) against the registrar and ZAR X, was dismissed with costs by the FSB’s appeal board.

 

4AX, which was awarded a licence at the same time as ZAR X, said on Monday that it would challenge the decision of the appeal board.

 

Source: BD

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I didn't follow this so closely, what is 4AX's beef with ZarX?

 

I am not sure I think A2X and 4AX was battling for the 2nd spot. South Africa's second stock exchange in more than 100 years sounds a lot better than South Africa's 3rd stock exchange.

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ZAR X says it is in advanced discussions with five companies interested in listing on the fledgling exchange, which was launched on Monday and settled its first trade in 10 seconds.

 

The exchange is the first new entrant into a sector that has been dominated by the JSE for decades, and will compete with the incumbent for listings and investors.

 

ZAR X was also in talks with restricted share schemes, such as broad-based black economic empowerment schemes, said CEO, Etienne Nel.

 

The speed at which Monday’s sole trade — a buy order for 100 shares in agricultural group Senwes at R10.50 per share — was matched, settled and cleared demonstrated the effectiveness of ZAR X’s platform, Nel said. ZAR X used technology to create a more efficient financial market for investors and issuers, Nel said. "We are passionate about driving financial inclusion in SA’s capital markets."

 

The exchange offered free real-time share data, such as stock prices and trades.

 

The ZAR X publishing service (Zaps) the equivalent of the JSE’s stock exchange news service (Sens), was also freely available on its website. ZAR X’s real-time settlement is a first in SA.

 

The JSE moved its settlement cycle from six days to four days, known as T+3 (trade plus three days), in July 2016. It said at the time that this would attract more foreign flows, as a shorter settlement cycle reduced risk since fewer unsettled trades were being made at any point in time.

 

Petri Redelinghuys, founder of Herenya Capital Advisors, 

said the competition introduced by ZAR X would reduce share trading costs. It would also increase flows into financial markets and enable smaller companies to list.

 

Senwes, which had to move its shares from an over-the-counter trading platform to a regulated exchange, was proud to be associated with ZAR X, said CEO Francois Strydom.

 

For the six months to October 2016, Senwes delivered profit after tax of R91m, an 11.6% decrease on the previous period due to the drought.

 

Senwes was an inexpensive stock that would benefit from drought alleviation in large parts of SA, said Andrew Vintcent, a portfolio manager at ClucasGray Asset Management.

 

The 107-year-old group, with a market value of about R2bn — trading on a price:earnings multiple of seven — focuses on the supply of equipment, seed, storage and financial services to the agricultural sector. It stores 25% of SA’s grain output.

 

Senwes has separately listed its majority shareholder Senwesbel, a tightly held investment business. Investors could "expect action on the double listing" in future, Strydom said, suggesting a possible collapse of Senwesbel into Senwes.

 

Source: BD live

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And here I thought the question on everyone's mind would be "How do I trade on ZARX" ????

 

My question as well. I wonder if EE will be offering them?

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I checked EE's twitter this morning. They have been asked, and it seems they are working on it. So hopefully it happens soon.

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Amazed that it's taking so long, it's not like people didn't know about this years ago already :(

 

So I worked on one of the major banks' share trading platforms for a couple of years. They are written in such a way that they only cater/assume one exchange (well this one was and I suspect most of the older ones are the same) because we've only ever really had the JSE in the digital age.

 

Early on, before it even became public knowledge, they got wind of the fact that a second exchange is coming and from the technical side preparations (planning, high-level designs etc) started so that changes could be made to cater for multiple exchanges.

 

But what happened? Politics. The thing with corporates is that there is this ladder. The guys climbing the ladder basically shovel the **** thrown on them back down to the guy below them (colourful analogy, I know). They care more about the short-term performance of the systems in their portfolio so that they can "look good" in front of business, get promoted and make the existing issues the next guy's problem. Rinse and repeat.

 

In this specific case we had an extreme version of this. The guy deprioritised the work so many times and for so long that it never happened. I left, two more guys left, the dev lead/architect left (basically the core dev element left) and the guy was "promoted" sideways. So a major share trading platform is sitting with a new dev team with little domain knowledge on a very old codebase and their first priority will be to keep the system (with a huge backlog of issues) running.

 

And that's why ZarX is not supported. I'm not saying this is true for all of them as the above was a bit extreme, but if I had to take a gamble I'd reckon that EasyEquities will probably be one of the first to support ZarX because their system is new. ABSA might beat them to it because I think their system is an off-the-shelve product which they customised.

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I figured this might be the case Hamster, I mean, this is South Africa after all where 90% of business care more about their bottom line than their clients. Adding to that is the fact that more and more extremely incompetent people are getting hired to fill posted where they have absolutely no clue how to operate.

 

I'm so glad I have less than 15 years left of work, because in 25 years time our entire workforce will implode due to untrained incompetent individuals.

 

*sips coffee*

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Only saw this article today...they have been busy.

 

ZAR X, South Africa’s newest stock exchange, has signed four new brokers – with another five preparing to join in the coming weeks.

The new signings mean ZAR X now has 10 brokers, which include Afrifocus Securities, Anchor Securities Stockbrokers, Independent Securities, Saxo Capital Markets, and Senwes.

 

“We are processing a significant number of applications from additional brokers,” said ZAR X director Geoff Cook.

The ZAR X model slashes brokers’ capital and operating costs, where they can execute high-volume/high-value and low-volume/low-value transactions with equal ease and profitably.

ZAR X operates a T+0 pre-funded clearing and settlement model where trades settle in 10 seconds.

 

Brokers don’t need capital adequacy to cover settlement risk and there is no need for a specialist settlements officer. The exchange provides free live data and Avvento front-end, and ZBOS client administration applications at minimal cost. ZAR X is set to announce a series of new listings in the next several weeks. The market cap of the new issuers ranges from R300 million to R5 billion.

The new industries represented include agriculture, financial services, health, and investment entities.

 

https://mybroadband.co.za/news/business/212328-zar-x-signs-new-brokers.html

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Here is another update

 

ZAR X captures TWK listing as brokers sign up

ZAR X has signed up five stockbrokers and bagged another listing, saying on Thursday agribusiness TWK Investments would list on June 12.

TWK was the first in a series of listings, across many sectors, which would be announced in the coming weeks, said ZAR X CEO Etienne Nel.

TWK will join agricultural group Senwes and its holding company, Senwesbel, to become ZAR X’s third listing since the exchange launched in February.

ZAR X is one of three new stock exchanges, with 4 Africa Exchange and A2X Markets, to launch in SA in 2017 and challenge the JSE.

With a market capitalisation of about R450m, TWK would list about 35.1-million shares, said ZAR X director Graeme Wellsted. "The offer does not involve an issue of new securities… it is a migration from an over-the-counter platform to a licensed exchange environment," he said.

TWK Agricultural Holdings and its related entities held 69.77% of TWK, with the balance held by about 707 shareholders. The listing would increase TWK’s share liquidity, CEO André Myburgh said.

 

ZAR X also announced it had signed up five stockbrokers, with five more joining in coming weeks. These included Afrifocus Securities, Anchor Securities Stockbrokers, Independent Securities, Saxo Capital Markets and Senwes.

 

It cost virtually nothing to be a member of ZAR X, which enabled Anchor Securities to offer its clients companies that were not available on the JSE, CEO Rob Turner said.

"I hope other brokers will follow suit," he said.

 

ZAR X was "poised to disrupt the market with its technology and offering", said Travers Metherell, head of institutional sales and trading at Saxo Capital Markets SA.

 

ZAR X clears trades in real time by ensuring that both sides of the trade are prefunded, which means the cash and shares are in the stockbrokers’ accounts before the trade is matched. In line with most major exchanges, the JSE operates on a T+3 cycle, meaning it takes four days to clear a trade.Prefunded trades mitigated potential risk faced by brokers over the settlement period of a trade, Metherell said. "[it] also does away with the need to tie up large sums of money in the form of regulatory capital."

The prevailing environment was tough for brokers that did not have large balance sheets or many discretionary clients, said ZAR X director, Geoff Cook.

 

https://www.businesslive.co.za/bd/companies/financial-services/2017-06-02-zar-x-captures-twk-listing-as-brokers-sign-up/

 

Anybody have more info on TWK as a business ?

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Was about to post the same!

 

TWK Investments Ltd (TWK) will be ZAR X’s third listing since the exchange commenced trading in February 2017 and will be one of the pillars of the exchange’s planned agricultural index.

 

“TWK is the first of a series of listings we will be announcing in the next several weeks,” says ZAR X co-founder and CEO, Etienne Nel. “The other listings will cover a range of different industry sectors, but TWK is significant for us in that it joins Senwes and SenwesBel, our first issuers, in demonstrating the value of agriculture as an asset class.

 

https://www.fanews.co.za/article/company-news-results/1/general/1056/zar-x-lists-twk-investments/22322

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The average joe still don't have access to investing on their platform via normal brokers though?

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The average joe still don't have access to investing on their platform via normal brokers though?

 

According to the last article it seems you can trade using Afrifocus Securities, Anchor Securities Stockbrokers, Independent Securities, Saxo Capital Markets ....still no EasyEquities tho :-(

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According to the last article it seems you can trade using Afrifocus Securities, Anchor Securities Stockbrokers, Independent Securities, Saxo Capital Markets ....still no EasyEquities tho :-(

 

Yeah I got that part, thanks

 

By average joe I'm thinking more in the line of Absa,Nedbank, other banks, and of course EE

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ZARX will be looking at new listings. The stock exchange to keep your eye on is A2X who will be competing directly with the JSE by targeting high quality blue chips. This should bring prices for data down substantially.

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Listing on new exchange lifts TWK

 

TWK Investments’s share price jumped 5.26% to settle at R13 on Monday, as the 77-year old agricultural group made its debut on the new exchange, ZAR X.

TWK Investments CEO André Myburgh said he hoped the listing would improve interest and liquidity in the share, which was trading at a 50% discount to net asset value. Independent analyst Mark Ingham said the business was attractively valued and prudently managed. "It has also moved with the times and diversified," Ingham said.

TWK provides products and services to the agricultural community, from timber plantation management and grain storage to finance, insurance and motor vehicle sales.

It is the second agricultural co-operative to list on ZAR X, joining Senwes, which listed in February. Zeder’s Kaap Agri will be separately listed on the JSE in 2017.

These listings give investors the opportunity to gain exposure to primary agriculture as an asset class. In the case of Senwes and TWK, they also indicate the emergence of interesting opportunities as companies that traded over the counter migrate to regulated exchanges.

TWK’s listing was a migration from an over-the-counter platform to a licensed exchange and did not entail the issuing of new securities. With just more than 700 shareholders and 35.1-million shares in issue, TWK Investments is majority owned by TWK Agricultural Holdings.

The Vumbuka Trust, a broad-based black economic empowerment trust, holds 25% of TWK Agri, which houses the group’s main businesses, holding 75% of TWK Investments.

Just more than 18,000 shares changed hands on Monday across 17 deals, at a total value of R232,160.

With a market capitalisation of R456m, TWK is trading on a price:earnings multiple of four. Its net asset value at August 31 2016 was R874m.

The share was trading at a significant discount to its net asset value and it would cost a lot more than R900m to replace the business, Ingham said. "It is undervalued in relation to its replacement value."

Earnings per share for the year to August rose 45% on the previous period’s to 339c. Revenue grew 23% to R6.5bn, with profit before tax climbing 39% to R158.7m. The board declared a final dividend of 44c per share, which at Monday’s share price suggests a dividend yield of about 3.4%.

Growth in revenue and profit was likely to continue, said chief financial officer Eddie Fivaz.

The agricultural sector would grow in importance, Ingham said. While an uncertain political environment did pose risks, South African farmers’ best years could still lie ahead of them, he said.

TWK Investments would consider a capital raise to fund bolt-on acquisitions that complemented its existing businesses, Myburgh said.

ZAR X CEO Etienne Nel earlier said that the exchange would announce a number of listings in the coming weeks.

It had signed up five stockbrokers, with five more set to join, he said.

 

https://www.businesslive.co.za/bd/companies/land-and-agriculture/2017-06-13-listing-on-new-exchange-lifts-twk/

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When/where can we buy ZARX stocks?

 

What are the costs involved?

 

From what I've seen on their site you need to phone a specific broker like AfriFocus or Saxo

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From what I've seen on their site you need to phone a specific broker like AfriFocus or Saxo

 

I do not want to phone another human.

 

Can one do this online?

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