JSE, which operates Africa’s biggest stock and bond exchanges, is looking to expand its private placement and carbon offset platforms across the continent.

The JSE Private Placements platform, which allows companies to raise money from select investors through the sale of equity or issuing of debt, has been operational since 2021 with over 70 deals executed so far. The JSE Ventures Voluntary Carbon Market was launched in 2023 and while it’s yet to see the issuance of any carbon offsets, it’s expected to commence trade by the end of the year, slower than initially expected.

“Where we are seeing potential is in the private market,” Leila Fourie, the JSE’s chief executive officer, said in an interview last week. “We are looking to create a network across Africa where we provide access to any company seeking capital.”

NO LIQUIDITY
The push by the JSE to expand across Africa comes after an attempt by the JSE’s Johannesburg Stock Exchange to attract listed companies from other African nations in 2009 failed to gain traction.

The lack of liquidity in many African stocks that might want to list in Johannesburg makes it difficult for institutional investors to buy them, Fourie said.

She said there is a lot of interest in the private placement platform, which currently operates in South Africa.

“We have R30-billion worth of investor capital, which is effectively dry powder and available for investment,” Fourie said. “The capital ask is anywhere between R15-billion and R20-billion” from interested companies, she said.

While the company is also keen to expand its carbon trading business on the continent there are regulatory hurdles including whether carbon credits are classified as securities, commodities or assets in different countries, said Fourie. South Africa’s National Treasury has said it will make proposals on their classification in October.

A credit represents a ton of carbon dioxide or its equivalent either permanently removed from the atmosphere or prevented from reaching it in the first place through projects such as reforestation programs. They are bought by companies to offset their own emissions.