Independent stock exchange Equity Express, which recently expanded to include bonds and debt notes, has rebranded to I-Ex – The Integrated Exchange – to reflect its offerings better. This interview with founder Anthony Wilmot explores how the independent stock markets have impacted the JSE, formerly a monopoly. It looks at how the specialist offerings provide a route to the capital markets for SA’s entrepreneurial class.
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Relevant timestamps from the interview
00:00 – Introduction
01:31 – Concern about too many licenses being issued
03:58 – What EESE has to offer
07:31 – Where did the name EESE come from?
09:38 – Senseless charges from banks
13:36 – Expanding outside the BEE space
17:09 – What are the volumes like at the integrated exchange?
20:07 – Conclusion
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Edited transcript of the interview
Alec Hogg: Anthony Wilmot, founder of the Independent Equity Express Stock Exchange and CEO of Singular Systems, a key supporter of BizNews. Anthony, I’m truly grateful for the early sponsorship you provided to BizNews. It meant a lot to us during our early months, and your support was invaluable.
Looking back at our last conversation in 2017, our focus was on Equity Express receiving its license as a 53% black-owned OTC platform, challenging the JSE monopoly. Since then, the landscape has seen the emergence of new players, some thriving and others fading away. A2X stands out, successfully dual-listing JSE companies and competing on price.
Your insights on the challenges faced by non-top 40 stocks are noteworthy, especially in light of the current trend of South African investors moving funds offshore. The political landscape and potential changes through an upcoming election could be a positive catalyst.
Anthony Wilmot: Certainly, Alec. It’s true that Zorix, the first to receive a license after the JSE, didn’t survive. A2X, now the Cape Town Stock Exchange, has rebranded successfully and gained traction, particularly in dual-listing JSE companies.
Alec Hogg: Shifting to Equity Express, tell us about your evolution and the reasons behind your recent rebranding.
Anthony Wilmot: Indeed, Alec. Equity Express began as a BE exchange, managing successful schemes like MultiChoice P2Minati. Despite our BE focus, we obtained a bonds and notes license last year and collaborated with Strait, integrating their unlisted bond trading platform into ours. This move has been exciting, with a successful bond issuance and growing interest in the bond space.
On the equity front, we now have the most listings ever, with nine companies and five hosted counters. Our unique proposition lies in facilitating investments in JSE-listed counters without the need for additional stockbroker accounts, thanks to our integration with Strait and other exchanges. Hence, the rebranding to the Integrated Exchange.
Alec Hogg: Tech-wise, you’ve always been ahead, Anthony. Singular Systems, your tech company, has played a crucial role. What’s your take on the financial industry’s tendency to charge for technology that’s already been created?
Anthony Wilmot: You’ve hit the nail on the head, Alec. Technology creation incurs costs, but the industry often sees it as an opportunity to levy charges. At the Integrated Exchange, we’ve been fortunate to maintain stable, cost-effective technology, preventing us from charging our investors for account maintenance.
Alec Hogg: Expanding beyond BEE listings seems like a natural progression. How does the Integrated Exchange handle restrictions on shareholding for privately listed companies?
Anthony Wilmot: We’ve implemented restrictions for clients like MultiChoice’s Phuthuma Nathi, ensuring no shareholder holds more than 10%. Our system pre-vets transactions, preventing rule violations. We also support confidential listings, allowing companies to limit access to sensitive information.
Alec Hogg: Given South Africa’s economic climate, there seems to be an opportunity for smaller businesses to list. What’s the current volume at the Integrated Exchange?
Anthony Wilmot: Our volumes have remained steady, and we can facilitate block trades. While the number of trades has decreased, we’ve seen significant trades, like Brimstone’s 100 million rands with Phuthuma shares. This year, we’re targeting around 450 million rands in trades.
Alec Hogg: It’s clear that smaller caps are often overlooked. How has the Integrated Exchange supported smaller companies like Venani?
Anthony Wilmot: Venani’s experience on our exchange is a testament to our impact on smaller companies. We’ve tripled their shareholder base, indicating the potential for growth in this sector.
Alec Hogg: The potential returns in the South African market are compelling. Thank you, Anthony Wilmot, for shedding light on the evolution and future of the Integrated Exchange.
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