The listing of Telkom would have been a nightmare had the market still been relying on the posting of share certificates to investors applying for Telkom shares, says Strate CEO Monica Singer.
She was speaking in Sandton last night at Gleason Publications' DealMakers annual banquet, which was co-sponsored by Strate and Telkom.
Telkom is scheduled to list on the New York and Johannesburg stock exchanges next Tuesday.
Singer said Strate, an electronic settlement system and the central securities depository for equities in SA, was an essential element in government's privatisation initiative.
"For new listings, those investors who hold their electronic records through a broker or CSDP [central securities depository participant] will have their money moved out of their bank account on the day the shares are allocated; not a day earlier."
Although those who disliked change and were scared of technology had been critical of Strate, Strate was a success story.
"Until the first quarter of 2002, SA was among the worst of emerging markets in terms of settlement and operational risk. At the end of 2002, SA is in fifth position in terms of settlement risk and third in terms of operational risk. All trades on the JSE Securities Exchange settle on time every time."
Audience members were disappointed when Telkom CEO Sizwe Nxasana said legal restrictions prevented him from disclosing any new details about the upcoming Telkom listing.
Investors had until the close of business last Monday to apply for shares. The allocation of shares and the initial public offer price are to be announced on the listing day.
Gleason Publications publisher David Gleason said merger and acquisition activity in SA more than halved in 2002 compared with the previous year. He said 504 deals valued at R205.6 billion were executed compared with 538 deals with a value of R476.8 billion in 2001.
This underlines the extent to which "big ticket" transactions were hampered by a pervasive lack of confidence, much of that generated in the early part of the year by the extraordinary collapse in the value of the rand.
The decline was offset to some degree by increased general corporate finance work. This rose 18% to R70.6 billion compared with 2001's R59.7 billion. General corporate finance activity embraces work such as joint ventures/alliances, company restructuring, unbundlings and bond issues.
The deal of the year, selected by a team from the Wits University Business School, was Nedcor's R8 billion takeover of BoE to create the country's largest banking group with assets in excess of R240 billion.
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