The Johannesburg Stock Exchange (JSE), Africa’s largest stock exchange, has struck a deal with Globacap, a specialist in automating private capital markets, to launch a private placement platform for billions of dollars worth of infrastructure projects across Africa.
The Johannesburg Stock Exchange (JSE), Africa’s largest stock exchange, has struck a deal with Globacap, a specialist in automating private capital markets, to launch a private placement platform for billions of dollars worth of infrastructure projects across Africa. The agreement will also see the launch of an SME funding market in South Africa.
The agreement and investment brings together JSE, which has operated as a marketplace for the trading of financial products for 130 years and is one of the top 20 exchanges in the world by market capitalistation, and Globacap, a regulated private placement and capital management platform that digitally administrates over GBP1 billion of private shares and debt instruments for 60 companies and over 8,000 shareholders worldwide.
Approximately USD100 billion of annual investment goes into infrastructure in Africa each year. The platform will facilitate this more easily and efficiently, utilising Globacap’s private placement technology which automates the world’s private capital markets.
Africa has a severe shortage of infrastructure, with financial annual requirement estimates ranging from around USD130 to USD170 billion, creating a shortfall of between USD53 and USD93 billion per year. With approximately 600 million people in Africa still without an electricity connection, and 80% of roads unpaved, infrastructure development is critical for human development and economic output.
Facilitating easier access to and greater efficiency of infrastructure investment in Africa will help unlock large gains in African factor productivity as well as aiding a labour force that is growing and urbanising faster than that of any other region.
The JSE will also use Globacap’s innovative technology and expertise to launch a SME funding platform in South Africa which will help stimulate investment into Africa’s SME community and assist overall economic growth.
Globacap will provide and operate both platforms for the JSE.
As part of the agreement, and the JSE’s own growth strategy, JSE will also be investing GBP4 million into Globacap as part of a Series A funding round.
Leila Fourie, Group CEO of JSE, says: “The deal with Globacap will support a critical growth node across the continent in the infrastructure and SME sectors. The JSE will use Globacap’s innovative technology and expertise to progress infrastructure finance and SME private funding markets. The deal will help stimulate investment into those markets and support job creation and economic growth. The transaction is part of our ongoing strategy to sustainably grow and diversify our revenue. Working with a leading capital markets fintech player positions the JSE well in our efforts to innovate a digital capital raise process in private placements.”
Myles Milston, CEO of Globacap, says: “This is an incredible project in a vast and growing market. We are excited to be part of it, to launch both platforms with the Johannesburg Stock Exchange, and for the JSE’s investment into Globacap, representing a milestone in our progress. The deployment of our technology with such an established public market as the JSE moves us one step closer to realising our goal of the digitisation of the world’s private capital markets.”