AltX, the JSE Securities Exchange's market for smaller firms that are ineligible for a main board listing, last year established itself as a viable alternative to the venture capital market (VCM) and development capital market (DCM). It also matched the two as being no place for the risk averse.
From a small start in January, following the transfer of two main board listings - soap and cosmetics firm Beige and Insurance Outsourcing Managers (Insure) - AltX ended 2004 with 10 listings and a total capitalisation of just more than R1bn, which eclipsed the VCM's and DCM's sectors' combined R885m.
Despite much hype, the debut listings went on to disappoint. In their first 15 months as AltX listings, Beige slumped 50% and Insure, which is to be delisted, provided extreme price volatility and little else.
Initial hopes that more companies would migrate to AltX were also dashed in July, when the JSE announced that it had reversed a decision to terminate the VCM and DCM. This followed objections from many VCM and DCM companies.
But a milestone was reached in August when IT firm Xantium Technology became the first listing not originating from a transfer. By year-end a further four companies had followed Xantium as first-time listings. The largest black-owned investment firm, Arch Equity, listed in December, with an initial capitalisation of R258m. Though first-time listings added R674m to AltX's capitalisation, no new capital was raised by way of public offers of shares.
For most AltX listings, price volatility has been the order of the day. Top marks, however, went to ice-cream manufacturer Milkworx, which listed in September and went on to plummet 50% in the first six months before rebounding by 75%.
Investors in empowerment group Yomhlaba Resources had an even more unpleasant ride. Yomhlaba gained 37% within three days of its listing at 100c/share in late-November, before starting a one-way slide that ended in its suspension at 50c/share in March amid a dispute between itself and BHP Billiton's Ingwe Coal.
Even heavyweight Arch Equity has provided volatility, with its price ranging from 210c/share to 305c/share in the first four months of 2005. But at least AltX produced one winner in its third listing, home finance firm African Dawn Capital, which gained 300% in the 12 months subsequent to its transfer from the main board in May 2004.
