The startup said in an announcement that Absa has become the first major South African bank to invest in the stock exchange which was founded in 2014 and began trading in 2017. Absa, which has a presence in 12 countries in Africa, participated in the capital raise launched by A2X towards the end of 2019.
A2X is owned by a small group of founding shareholders, management and staff. In addition, African Rainbow Capital holds a 20% stake and broad-based empowerment company Nala a 10% stake.
SA startup and stock exchange A2X Markets was founded in 2014 and includes African Rainbow Capital as a key shareholder.
“The team at Absa CIB are always looking for innovative ways to save money for our clients and support the industry in which we operate. As a broker, we believe in an efficient and progressive marketplace and our investment in A2X shows our support for this,” Absa head of equities Quintus Kilbourn, said in the statement.
A2X CEO Kevin Brady called Absa’s investment in A2X a “vote of confidence”. “Effective competition in an industry drives market efficiency and this benefits all users, including individual investors and pensioners. By offering lower costs, we are able to create a better market to grow the overall industry,” said Brady.
Many of South Africa’s top companies are already listed on A2X including eight Top40 constituents, three Absa precious metal exchange-traded funds (ETFs) and two Investec exchange-traded notes (ETNs).
The A2X exchange has listings from many key sectors, including mining, media, banking, retail, FMCG, financial services, insurance, healthcare and telecommunications, and is a licensed stock exchange that provides a secondary listing venue for companies.
Despite current market conditions, the pipeline of issuers remains healthy and trade is growing steadily, it noted.