The halving in the exchange’s share price over the past decade is driving increasingly strident calls for it to repurchase its own stock.
It’s not as though the JSE wouldn’t have liked to avoid some questions at its recent annual general meeting . As the first shareholder with his hand up was quick to point out, the exchange is surely having a demoralising time.
The JSE makes R1m a day, so that [the R200m-R300m] would be very quickly replenished … please let’s do something to get a rerating of our JSE shares“The JSE makes R1m a day, so that [the R200m-R300m] would be very quickly replenished … please let’s do something to get a rerating of our JSE shares.” “But I’m sure you also appreciate that if you have 10 people in a room and ask if they would support a buyback, you would get a split; there are good reasons and bad.”Nhleko has also cautioned that the company has a very small balance sheet and therefore limited room to operate. “It’s different from large corporations; they can afford to do big buybacks and if things go wrong, they can sustain that. The JSE does not have so much latitude.
Instead of using capital to enhance a company’s long-term productivity, profitability and employee welfare, buybacks reduce the size of the company, though they increase the value of shares for those investors who haven’t sold out.The potential conflicts are heightened by the generally poor levels of transparency about buybacks. Regular buyback Sens announcements by Prosus, Naspers, South32 and Glencore highlight the tougher requirements these dual-listed entities face.
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