Aspen's secondary listing on A2X seen as 'mostly academic'
“We continually strive to identify ways to increase value for our shareholders, and the complementary A2X listing offers investors trading benefits while simultaneously providing the prospect of increasing our shareholder base,” Saad said. “We will retain our primary listing on the JSE, and our issued share capital will be unaffected by the secondary listing.”
The A2X is a licenced stock exchange that provides a secondary listing venue for companies. It is regulated by the Financial Sector Conduct Authority and the Prudential Authority in terms of the Financial Markets Act. A2X began trading in October 2017 and has nine approved brokers that account for about 50percent of market activity.
Winning over Aspen is another step forward for A2X.
But analysts warned that Aspen would not be raising any additional capital with the listing.
“It will give them more liquidity, more options. It will broaden the market base. It is actually more good for the A2X,” Vestact investment manager Brian Lotter said.
Aspen’s shares would be traded at the same price on the A2X as they were on the JSE.
Earlier in March the global pharmaceutical company’s shares plunged as much as 51 percent to R68.99 in just two hours after Aspen said in an earnings report that borrowings, net of cash, had increased by R6.7billion to R53.5bn.
Aspen’s shares, which have been rocked by debt concerns, were 0.1 percent up at R91.20 yesterday morning. Prior to releasing its results, Aspen’s shares were at R141.15.
A2X began trading in October 2017. Other companies with secondary listings on the exchange are Growthpoint Properties, Naspers and Standard Bank.
With Aspen on board, A2X will have 18 listings, with a combined market capitalisation of more than R2.1trillion.
Mergence Investment Managers senior investment analyst Izak van Niekerk said Aspen’s share price would unlikely be moved by the secondary listing. “Lower trading costs will make Aspen more accessible to investors. We will have to see by the volume of shares traded. Perhaps the total volumes in both exchanges will be more than there used to be on the JSE alone, which would mean that the group’s shares are more liquid,” he said.
But A2X chief executive Kevin Brady said Aspen would reap the benefits of a secondary listing.
Brady said the group would attract potential new investors through A2X’s lower-cost trading structure and broadening their shareholder base.
“A2X is thrilled to have South Africa’s largest pharmaceutical company on board,” Brady said.
Aspen shares closed 0.08 percent lower at R91.02 on the JSE yesterday.