- Players: Geoff Cook, Etienne Nel (CEO), Graeme Wellsted
- Company: ZAR X
- Est: 2017
- Visit: www.zarx.co.za
An alternative stock exchange
ZAR X started operating in February 2017 and is an alternative stock exchange that seeks to compete with the country’s main board, run by the JSE. It was the first of four new exchanges launched in South Africa in 2017, in what is an audacious challenge to the JSE’s dominance.
At the beginning of 2018, the Public Investment Corporation (PIC), one of Africa’s largest asset managers, bought a 25% stake in ZAR X for an undisclosed amount. The founders have made it possible for the person in the street to trade, and their aim is to spread wealth among black South Africans particularly, to help address economic inequalities. Using disruptive fintech, the business model is built on the principles of simplicity, low-cost, transparency and agility.
The goal of all investors in the stock market is the same — to generate returns from their investment. ZAR X enables information transparency in its market by aggregating and distributing real-time information, and operating its exchange platform for companies to provide financial and other corporate disclosure for investors
“We were told that it’s impossible to settle transactions on the day of trade, but our model allows us to do just that,” says ZAR X’s CEO, Etienne Nel. “We settle in real-time (T+0) when everyone said it could not be done. It’s one of our critical differentiators, along with a platform that de-mystifies investment in the capital markets and facilitates financial inclusion for retail investors.”
ZAR X’s Etienne concurs. “Our goal was to make it possible for the ordinary person to buy and sell on a stock exchange, and to trade with as little as R1 000. Starting with a blank slate allowed us to imagine the ideal way to do that, rather than being constrained by working within the realms of what was already available.”
“Our goal was to make it possible for the ordinary person to buy and sell on a stock exchange, and to trade with as little as R1 000. Starting with a blank slate allowed us to imagine the ideal way to do that, rather than being constrained by working within the realms of what was already available.”
ZAR X’s Etienne Nel says challenging a monopoly that has had a 130-year hold on the market required the company to disseminate a lot of information. “We’ve democratised the process of investing. For example, we have published many opinion pieces to help guide investors, and to help them understand what we offer and how it works. Given that we have an enormous amount of experience between the three founders, this has been a key element in establishing trust in the market.”
But ZAR X has done one other thing that is truly compelling for inexperienced investors — leveraging the power of video communication to show what makes the company different. On its website, five-minute video presentations explain all its listed securities, as well as how the stock exchange works.
“Gone are the days when people want to read 100-page prospectuses on companies,” says Etienne. “We have made all the information our clients need to become knowledgeable investors available online for free.”
What’s next for ZAR X?
Etienne says the long-term goal is to build a pan-African stock exchange. “We want to use our advanced technology platform to broaden financial inclusion across the continent and make it much easier and more affordable for ordinary people everywhere to acquire a stake in the success of a business. Our dream is to give them access to investment opportunities that did not exist before.”
However we choose to describe digital disruption, one thing is clear: Its most immediate and tangible impact is the way it is radically transforming the customer experience through digital channels, technology, tools and initiatives. And if you own or manage an organisation, you are in the business of customer experience.
Adopting a customer experience mindset means giving customers what they really want. Companies that are able to do this will gain the ability to build new markets while stragglers are left behind.