Stock Exchanges to Back Entrepreneurs Approved by South Africaby
First ‘township’ exchange will trade stocks in local business
Aim of bourse is to help entrepreneurs generate funding
South Africa will next month open its first stock exchange devoted to helping small-business operators in parts of major cities that were neglected during white-minority rule.
The exchanges will be set up in Gauteng province, which includes Johannesburg and the capital, Pretoria, focusing on satellite residential areas known as townships, set up to segregate racial groups during apartheid and housing mostly black South Africans. Residents will be able to trade shares in local businesses, providing an alternative to the 129-year-old Johannesburg Stock Exchange, with less stringent listing rules and lower costs, under plans announced by Gauteng Premier David Makhura.
“It will be run by like a proper business, which must still make business sense for the investors and those who are running the stock exchange,” Lebogang Maile, an official in Gauteng’s Economic Development department, said from Johannesburg Wednesday. “The only difference is that it will relax the requirements so that it becomes easier and cheaper for township-based entrepreneurs.”
The exchanges will seek to make the most of money already circulating in the communities and promote economic development, according to Maile. South Africa’s Financial Services Board has granted a company a license to set up the exchanges, Maile said.
The FSB didn’t immediately respond to an e-mailed request for comment.