IOL / COMPANIES / 26 NOVEMBER 2018 - 10:30 / ANA REPORTER
JOHANNESBURG - A newly formed company has pledged to help increase the participation of black stockbrokers in the R9 trillion securities industry.
A group of professionals have acquired the majority shareholding in Genesis Securities, making the brokerage owner managed and renaming it Khumo Securities.
“We are excited about this acquisition. We believe that this will be a platform for showcasing black talent, training young professionals and achieving a more inclusive financial services industry,” new CEO Mzwakhe Nhlanhla said.
Association of Black Securities and Investment Professionals (ABSIP) president Sibongiseni Mbatha said the financial services sector should be committed to promoting a transformed, vibrant, and globally competitive industry reflecting the country's demographics and which "contributes to the establishment of an equitable society by providing accessible services to black people and directing investment into targeted economic sectors".
“We are pleased to see our rank and file participate in the mainstream economic activity. We are proud and supportive of this transformative transaction,” said Mbatha.
A report entitled "Transformation in the Stockbroking Industry" says black brokers’ market activity remains low as a percentage of domestic capital markets activity, while black individuals' presence in the research sector remains disproportionately low.
ABSIP says challenges still facing black broking firms include a lack of legislative support because broad-based black economic empowerment laws remain voluntary and only applicable to those who wish to comply.
It says institutions’ support for black brokers over the years has been "intermittent, short-term and inconsistent making it difficult for these firms to plan with any predictability".
Nhlanhla said the launch of Khumo Securities came at the right time, ahead of the January 2019 application of the amended Financial Sector Code which among other provisions requires procurement and transformation to be placed at the centre stage.
"The amended FSC requires investors to pay attention to their pace of transformation, beyond ownership and staff," Nhlanhla said. "So the timing of our launch of Khumo is intentional, to give talented black professionals who have the track record, experience and skills the opportunity to meet this growing need."
Khumo Securities is a member of the JSE as a stockbroker and trades for several asset managers and hedge funds.
Disclaimer - The views expressed here are not necessarily those of the BEE CHAMBER