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We take a look at the Rand value (expressed in 2015 prices) of share capital raised by companies listed on the Johannesburg Stock Exchange since 1992. Since 1992 to January 2016 companies have raised around R2.798trillion (roughly the value of South Africa's economy which is around R3trillion (expressed in 2010 prices).
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Have you recently felt that companies you own shares in have asked for more capital more regularly via rights issues, private placements and the likes. Or got the sence that more companies are listing on the JSE in order to raise money? Think Trellidor, Waco, Balwin for example that recently listed.
The graphic to the right shows the Rand value of share capital raised per year since 1992. Note values are expressed in 2015 prices. As can be seen from the graphic, 2015 was the year that registered the most money raised via share capital on record (records were kept from 1992). It amounted to R247billion. The second biggest capital raising was in 1998 which saw R227,6billion raised (based on 2015 prices). No doubt dotcom bubble enterprised contributing to the large number in 1998. The third highest value raised came in 2007 with R202billion raised (this was largely due to construction and infrastructure groups listing on the JSE to take advantage of South Africa's construction and infrastructure spending boom before the 2010 World Cup). |
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Some of the listings in 2007 include:
Some of the listings in 2015:
- Raubex
- Stefanutti & Bressan
- TWP Holdings
- ARB Holdings
- Erbacon Investment Holdings
- Hardware Warehouse
Some of the listings in 2015:
- Novus Holdings
- New Frontier Properties
- Loadstone REIT
- Waco
- Balwin
While there has been many new listings on the JSE, a large number of listed firms came to the market to raise capital over the last couple of years. Whether firms are coming to the markets to raise money, because it's cheaper to do so than borrow from the banks is unclear. But the reasons why they raising money should be of a bigger concern to investors. Are they raising money to get themselves out of trouble, or are they raising money to ensure they well placed for future growth. We dont have answers to these questions, but we do now that 2015 was an absolutely bumper year for firms looking to raise money on the JSE.