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Chinese firms eye Africa's largest stock exchange

Reporter: Angelo Coppola 丨 CCTV.com

12-03-2015 10:38 BJT

Full coverage: Xi Attends Paris Climate Talks, Visits Zimbabwe, S. Africa

South Africa is gearing up to receive leaders from across the continent as well as delegations from China. We take a look at the Johannesburg Stock Exchange and explore the opportunities for Chinese companies to list on Africa's biggest stock exchange. 

As these delegations begin arriving, a JSE delegation has just returned from a business visit to Beijing, Shanghai and Hong Kong.

"We spoke to several Chinese companies that have businesses, not just in South Africa, but across Africa, that are very interested in our exchange to either exit portfolio investments that they've made like private equity, or to raise capital for acquisitions that they've made. And we believe that there's a lot of opportunity in that," said Donna Oosthuyse, director of Capital Markets, JSE.

There are many Chinese businesses and state-owned subsidiaries operating on the continent, and they have been here for several years already. And many of these businesses are ready to take the next step in their development.

"As their subsidiaries and their businesses in Africa have grown, they are looking to organized exchanges as a mechanism to raise capital or to monetize existing investments," Oosthuyse said. 

Like most investors Chinese investors are always on the look out for investment opportunities and the South African resources sector appears to be attracting some interest.

"They felt that they could weather this current low commodity cycle with other types of business until the cycle picks up again. And they felt there was good value for money in investing in some of our resource sectors. Which have been among our worst performing this past year," Oosthuyse said.

The fact is that Chinese state owned subsidiaries operating in africa haven't turned to the capital markets here for funding as their parent companies are capital rich. 

"I believe there's still a lot more that can be done, investment in securities, fixed income, and foreign exchange flows and I think that there's a great future for that," Oosthuyse said. 

Interest in S.African and African markets in terms of investment flows, in terms of listing entities is still at an early stage, there's not much happening in South Africa at the moment, but the signs are good that this is going to change in the near future. 

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