"Slowly but surely" sums up progress made last year by AltX, the JSE's market for smaller companies generally ineligible for a main-board listing. AltX ended its second full year of operation with its listed ranks having swelled from 10 at the end of 2004 to 15 (including one suspended company) and its total market capitalisation up from R1bn to R3bn.

Disappointingly, the number of new listings grew only marginally, from five in 2004 to six in 2005. All were by way of private placings with the initial capital introduced at listing totalling R596m.

But despite the modest growth, Noah Greenhill, AltX's business development manager, believes it is still early days. There are many unlisted companies suitable for listing on AltX but a number of factors are holding them back, says Greenhill. One is abundant, comparatively low-cost debt offered by banks.

Another is the "fear factor" which the JSE is addressing by being more proactive than ever in educating company managements on the benefits of listing. "The more we talk, the more attractive it becomes to them," says Greenhill.

He also believes AltX has demonstrated the benefits a listing on its boards can have. For example, Oasis cited cost-effectiveness as a factor in its decision to list its Oasis Crescent Property Fund on AltX in November 2005.

Another 2005 listing, Enaleni Pharmaceuticals, provided a vivid example of the advantages to be gained from the visibility a listing provides. Worth R114m when it listed in June, the BEE firm soon went on to bigger things following a strategic agreement with US pharmaceutical group Merck. A series of share-financed acquisitions followed; now main-board listed, Enaleni's market capitalisation has rocketed to R1,7bn.

AltX has also proved itself a valuable alternative market for investors, says Greenhill. Marketability in particular is a strong feature of AltX shares. For instance, he says the total value of trading in what were 17 AltX companies in the first quarter of 2006 equalled the total value of trading in the 78 main-board companies with market capitalisations of less than R100m. The AltX shares also achieved double the volume of the 78 main-board shares.

With four new listings in the first four months of 2006, Greenhill says confidently: "Given the current market we should see more new listings."