First, at a time when domestic and inbound mergers & acquisitions (M&A) continue to fuel de-listing activity and we’ve seen a few companies leave the JSE in recent years, the listing of the acquirers of these assets not only helps lessen the impact of these de-listings by replacing the target with the listing of the new parent, but also broadens the exposure offered on the local market, providing investors with direct access to larger, often more geographically-diversified acquirers. 

Through CANAL+, investors now have access to a media giant that operates in more than 70 countries and serves over 42 million subscribers globally, with a strong footprint across both Europe and Africa. 

Second, with initial public offering (IPO) deal flow remaining sporadic, any new listing activity, including inward listings by introduction, is to be welcomed. 

Since 2018, only four IPOs that have raised R1bn or more of primary or secondary capital have come to market. Whilst the pipeline of potential JSE IPOs for the next two to three years is looking increasingly healthy, there is every chance of some volatility. In this context, listings by introduction at least manage to present investors with new domestic investment opportunities that offer a vital source of sectoral and geographic diversification in an increasingly concentrated market. 

Third, the listing of another issuer with truly pan-African exposure, coming little more than six months after Optasia’s JSE IPO, provides a further reminder that the JSE is a viable and attractive location for the listing of corporates operating across the continent. 

As listing activity across the globe slows and the competition to attract listings intensifies, the emergence of the JSE as an attractive hub for African issuers, and an alternative to its international competitors in Europe and the United States, is a positive development. 
The CANAL+ listing acts as another helpful case study of what the JSE can offer, in terms of investor access and profile.

Although no concurrent capital raising was undertaken alongside the listing, CANAL+’s local debut also demonstrates two often overlooked benefits that secondary listings on the JSE can offer issuers. 

The first of these is an improvement in underlying stock liquidity which, importantly, is not limited to new liquidity formation on the JSE, but also extends to increased liquidity on the company’s primary listing venue. To illustrate this point, in the first month since listing on the JSE, global trading volumes in CANAL+ shares have increased by over 70% relative to the one month prior to listing; this includes a 50% increase in volumes traded on the LSE, the company’s primary listing location. Increased liquidity arises in response to the overall increase in access to fundamental buyers that the JSE listing facilitates, and the increased opportunity that exists for arbitrage investors to take advantage of price differentials that emerge between two lines of stock that trade in different currencies.

 
The second benefit of the listing is the broadening of the CANAL + shareholder register and the entry of a number of long-term, blue-chip institutional investors that have the potential to form the bedrock of the company’s register over the long-term. 

Shareholder diversification not only contributes to heightened levels of liquidity, but also helps to bring greater diversity to the register, thereby contributing towards a lowering of overall stock volatility.                                    

Standard Bank is proud to have acted as joint financial advisor and transaction sponsor to CANAL + on its secondary inward listing, a transaction that demonstrates the bank’s ability to partner with leading international corporates on strategic transactions that deepen African markets, enhance investor access, and support the continued development of the continent’s capital markets ecosystem.