JPMorgan forecasts a significant increase in IPOs on the Johannesburg Stock Exchange as investor confidence returns and economic recovery gains momentum. Key listings from companies like Coca-Cola Africa and Anglo-American could drive this IPO surge in 2025.
Key Points
- JPMorgan expects a wave of IPOs on the Johannesburg Stock Exchange as economic optimism grows, sparking interest from major global companies.
- Companies like Pick n Pay’s Boxer, Anglo-American’s spinoff, and Coca-Cola’s Africa unit could lead the IPO boom, with some valuations hitting billions.
- After years of slow growth, South Africa’s economy is showing signs of recovery, with investor confidence rising and new opportunities on the horizon.
JPMorgan Predicts a Surge in South African IPOs Amid Economic Optimism
South Africa’s economy could soon see a flurry of new companies going public, according to JPMorgan Chase. The Johannesburg Stock Exchange (JSE) is gearing up for an increase in initial public offerings (IPOs) and fundraising, thanks to a growing sense that the country’s economy is bouncing back after years of slow growth.
This optimism follows the May 29 election, where the African National Congress (ANC) lost its parliamentary majority for the first time since 1994. The shift in political power sparked renewed confidence among multinational investors, leading to a stronger rand, bond rallies, and a 20% rise in the JSE benchmark stock index in dollar terms since June.
Edward Bell, managing director at JPMorgan in Johannesburg, said, “We would expect primary activity to pick up,” explaining that improving stock market performance and valuations are making IPOs a more attractive option for businesses.
Big Names Preparing to Go Public
The JSE could soon see several high-profile IPOs. One of the most anticipated listings is the Boxer unit from Pick n Pay Stores, expected by year-end. Anglo-American is also looking at spinning off its platinum and diamond divisions. Coca-Cola is reportedly preparing to list its African bottling business, aiming for a potential $8 billion valuation in 2025, according to Bloomberg.
The JSE is also stepping up efforts to attract more businesses with ties to Africa or sub-Saharan Africa, offering a platform for inward and secondary listings.
Confidence Grows in South Africa’s Economic Outlook
JPMorgan forecasts that South Africa’s economy will grow by 1% this year and 1.4% in 2025. After averaging less than 1% GDP growth over the last decade, this positive outlook is encouraging more focus on domestically oriented stocks. Banking giants like FirstRand, Standard Bank Group, and Capitec Bank Holdings have all seen their shares rise by over 25% since June.
Despite foreign investors selling a net $5.5 billion worth of South African stocks this year, interest in the local economy is beginning to turn a corner.
According to Bell, emerging market debt investors are also eyeing sub-Saharan Africa for its strong yields and relatively stable economic outlook.
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