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1/n What a stat!
... Here’s another. In 1996, more than 7,400 companies were listed on U.S. stock exchanges; today, that figure is less than half...So what does that mean?...Well... https://twitter.com/andile_khumalo/status/1285229145497260036
... Here’s another. In 1996, more than 7,400 companies were listed on U.S. stock exchanges; today, that figure is less than half...So what does that mean?...Well... https://twitter.com/andile_khumalo/status/1285229145497260036
2/n: Small companies are also staying private longer, preferring to raise venture capital or other private money rather than having to abide by more stringent regulatory requirements of public companies.
3/n: Merger and acquisition activity continues to shrink the number of public companies, too.
Also some investors believe the dwindling number of publicly traded companies and shares outstanding has helped boost blue-chip indexes
Also some investors believe the dwindling number of publicly traded companies and shares outstanding has helped boost blue-chip indexes
4/n When demand for stocks rises but the supply of shares available shrinks, that helps push stock prices higher...
Some would argue that it makes capital markets more efficient.
Some would argue that it makes capital markets more efficient.
5/n vast majority of the stocks that have disappeared were small or microcap. They wouldn’t have had a major influence on the broader blue-chip indexes anyway, since most weight stocks by size rather than equally.
6/n The diminishing number of listed companies has affected the stock market in other ways.
E.g. The reliance on private capital has made it harder for stock investors to get exposure to younger companies that would have otherwise listed on an exchange quicker.
E.g. The reliance on private capital has made it harder for stock investors to get exposure to younger companies that would have otherwise listed on an exchange quicker.
7/n In part, this also reflects the changing fortunes of the sectors in the South African economy, but there are other factors at play here too...
These trends are instructive & speak to the changing nature of our economy and investment markets as well as...
These trends are instructive & speak to the changing nature of our economy and investment markets as well as...
8/n ...providing some insight into lost opportunities and offering some future lessons.
With investors & company management spooked by corruption & government policy post the 2009 Zuma administration election, they have looked to externalise their business & investment...
With investors & company management spooked by corruption & government policy post the 2009 Zuma administration election, they have looked to externalise their business & investment...
9/n South Africa’s economy de-industrialised. In 2006, manufacturing accounted for 16.3% of GDP. Today it accounts for just 12.5%. Increasingly the market no longer looks like the actual composition of the country’s economy.
10n over the past 10-15 years, the JSE has increasingly become an “externalised” exchange given the local political & economic environment.
This can be well seen in the nature of firms listed currently vs 1999.
This can be well seen in the nature of firms listed currently vs 1999.
