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Adv. Fay Mukaddam : Making Financial Markets Inclusive For Africa

4AX Seeks To Broaden And Deepen Capital Markets In South Africa
Economies, the world over it seems, are in a state of serious and constant flux.

The ripple effects of the 2008/9 Western financial crisis continue to be felt worldwide, where in recent years we have seen a slowdown in countries that are key trade markets for economies across Africa; including China and several European countries. This, coupled with the influence of fragility in the world economy, policy uncertainty and geopolitical risks — as recently seen with the Brexit vote and the U.S election — leaves many emerging African states competing with developed and developing economies, alike, to attract and sustain foreign direct investment (FDI).

In South Africa, for instance, the economy has witnessed several downgrades from rating agencies and steadily declining growth rates over the last 24+ months and the subdued growth in the internal and world economy has had an impact on FDI into the country. This continues to place businesses operating in South Africa under immense pressure to balance costs versus profits in tougher economic times.

It is against this backdrop that both local and international businesses call for an exchange that will meet the unique needs of a world class African market.

This is exactly what 4 Africa Exchange (Pty) Ltd, a newly licenced, fully-fledged stock exchange (with a full license to trade in all security classes) seeks to provide.

At 4AX we seek to change market perceptions of stock exchanges and open the door for Africa’s best companies, leaders, innovators and entrepreneurs, as well as provide easier access into the financial market for more retail investors. We offer issuers, brokers and investors a wellregulated, cost efficient, simple alternative exchange to invest, trade and grow wealth.

For issuers…
We seek to attract listings from all qualifying issuers, focusing on those issuers with an anticipated market capitalisation of between R100 million and R8 billion, or issuers with restrictions on their securities, where 4AX’s centralised restricted security validation model accommodates those issuers.

Our model offers:
• Opportunities to raise capital
• Targeted investor base - especially if an issuer has or wants a large number of investors, or a retail investor base
• Share transferability and for restricted schemes we can ensure that the restrictions are honoured, for an issuer’s ownership objectives to be achieved
• Issuer’s life cycle, as our model is designed to help issuers achieve their monetization strategy even before they have a proven profitability track record
• Simple and transparent listing requirements
• Cost-effective listing process

For brokers…
We offer stock brokers and those wanting to offer brokerage services the opportunity to become 4AX authorised users. This would allow them access to 4AX’s exchange technology, investors and issuers.

Our model is well suited for:
• Existing and aspirant brokers and new businesses. Our admission requirements are in line with the current requirements for an existing broker, but simpler and without the need for excessive risk capital. We also allow new businesses to become brokers, and we hope to see the establishment of new brokers.
• Any technology system, as the 4AX platform is agnostic and does not prescribe specific systems for its authorised users – and our Registry does provide reports to brokers online and daily to facilitate effective accounting of client transactions.
• A retail focus: Our retail shareholders, many of whom do not have brokers, are an attractive market to existing brokers seeking to grow their client base or to entrants who have other connections to these clients.

For the investor…
We seek to offer investors the potential of a fully-fledged licenced exchange that is more affordable and accessible, and allowing for full participation as owners of listed companies.
At the same time, we seek to accommodate the needs of established institutional investors.

Our model does require investors to trade through an authorized user, though we’re also able to offer the following benefits to investors:
• Regulated investor protections through consistent and proactive surveillance and monitoring
• Simplified solutions that will meet the needs of all types of investors — including targeted restricted trading
• Transparent fee structures. There are 4AX fees, taxes (for buyers) and the fee negotiated with the broker. There are no additional or hidden costs and, importantly, by not having any minimum or monthly fees 4AX makes share ownership attractive to retail investors.
• Freely sharing information and driving public awareness on investment opportunities by making news and trading updates available online for free public access.

Despite economic and political challenges in the country; South Africa remains a vibrant, growing market with enormous potential.

There is strong appetite in the country for alternative listing and trading options; to further develop and deepen capital markets in support of economic transformation by creating access, and in keeping with growing economies around the world. At 4AX, our chief aim is to become a vehicle for access for all to financial markets – as a preferred alternative trade and investment partner, for change.

For more information contact us on:
Tel: +27 (0) 11 100 8352
Email: info@4ax.co.za
Website: www.4ax.co.za

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