INCE|Connect News

Corporate finance activity of the week. Etion issues shares for cash

The company issued 70,000,000 shares at R0.39 per share raising an amount of R27,3 million. The issue was implemented at a 3.8% discount to the 30 day VWAP. The shares were issued to Conexus Capital Growth Fund Trust.

Results of Equites Property Fund scrip distribution alternative

The company has issued 3,987,954 new shares in terms of its scrip distribution alternative retaining R79,77 million in the company. The shares were issued at R20.00 per share.

Renergen proposes fully underwritten rights offer

In terms of the Rights offer, the company will offer 16,666,667 shares to Renergen shareholders at a subscription price of R7.50 per share to raise R125 million.

Bowler Metcalf announces special dividend

The company has announced a special cash dividend of 305 cents per share to be distributed from the proceeds arising from the disposal of the company's share in SoftBev.

Choppies Enterprises suspended on the JSE

The company, with a primary listing on the Botswana Stock Exchange, has been suspended due to failure to submit its audited financial statements for the year ended 30 June 2018. The company's securities have as a result been suspended with immediate effect from the BSE and the JSE.

Blue Label repurchases shares

The company repurchased 32,853,168 shares for an undisclosed amount. The shares, representing 3.47% of the issued share capital of the company were acquired as part of a general repurchase in terms of the general authority to repurchase approved by shareholders at the AGM in January 2018. The shares have been cancelled and delisted.

Novus repurchase shares

The company repurchased 22,611,673 shares at an average price per share of R4,47 totalling R101 million, representing 6.5% to the total issued share capital of the company.

South32 repurchases shares

The company this week repurchased a further 2,919,212 shares for A$10,57 million (R107,81 million).

Hammerson plc repurchases shares

This week the company repurchased 1,128,506 shares at a cost of 5,02 million (R92,48 million) as part of a share buyback programme for its ordinary shares to return realised disposal proceeds to shareholders over the next 12 months. The maximum aggregate consideration under the programme will be "300 million up to a maximum of 79,422,719 ordinary shares.

Glencore repurchase shares

This week the company repurchased a further 10,750,000 shares at a cost of 34,67 million (R639,22 million) in terms of its buy-back programme.

Ecsponent issues additional preference shares

Ecsponent has, under its R5 billion preference share programme, issued additional preference shares valued at R41,82 million.

Standard Bank and Avis list on A2X

The Standard Bank Group and AVIS, both with primary listings on the JSE have taken secondary listings on A2X. They will list on the secondary exchange on November 15, 2018.

BHP Billiton to change its name

The company will trade on the JSE under its new name BHP with effect from November 21, 2018.

Two companies issued a profit warning announcement

The following companies issued profit warnings this week: Union Atlantic Minerals and New Frontier Properties.

Nine companies either issued, renewed or withdrew cautionaries

The following companies advised shareholders: ELB Group, Randgold & Exploration, Spear REIT, Group Five, Orion Real Estate, ARB Holdings, Global Asset Management, South Ocean and New Frontier Properties.

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Who’s doing what in the South African M&A space? Exchange Listed Companies

Master Plastics has announced it has received a firm intention offer to acquire the company by private equity funds Metier Capital Growth Fund II and MCGF II Investments. The offer to acquire 104,93 million shares excludes the 10.72% stake held by the current CEO. The cash offer price of R2.00 per share values the deal at R209 million. The company listed on AltX in May 2017 with a market capitalisation of R104 million.

Ethos' private equity Fund VII, has made a R700 million investment into Channel VAS, a global Fintech provider based in Dubai. Channel VAS is a provider of Mobile Financial Services, Big Data analytics and Airtime Credit Service to mobile subscribers in over 30 countries across Africa, the Middle East, Asia, Latin America and Europe.

Interwaste has announced it has received a firm offer by Sch SA to acquire the entire issued share capital of the company for a cash consideration of R1.20 per share. Sch Environment is a leading French player in the recovery and treatment of all types of waste from both industry and local communities. The transaction is valued at R542 million. Following the implementation of the scheme Interwaste will be delisted from the main board of the JSE.

Master Drilling and Italian construction company Ghella, have announced a joint venture (49%:51%) which will operate under a newly registered company TunnelPro. The joint venture will pursue tunnel boring projects in the smaller scope civil construction and broader mining industries while also offering select product supply and professional services to industry third parties.

Adapt IT has entered into a purchase agreement with Jed Holdings to acquire the businesses of Conor Solutions which operates in the ICT sector focused on mobile technologies providing turnkey solutions to mobile operators, financial institutions, enterprises and SMMEs in Africa and South America. The total purchase consideration is R80 million.

Mettle Investments has acquired Imali Medical Claims from the trustees of the Andia Trust and the Viola Trust, for the 49% indirect stake in Christopher Finance (CF) for R17,7 million. CF is a niche financial services company providing working capital finance to selected firms of attorneys which is secured by claims for costs the attorneys have against reputable third parties. Mettle will also internalise the management of CF for a maximum amount of R15 million.

BHP Billiton has been successful in its bid to acquire a 100% participating interest in, and operatorship of, two exploration licences for blocks 8 and 12 in the offshore Orphan Basin in Eastern Canada. The bid amount of $625 million covers the drilling and seismic work required.

Orion Real Estate has acquired two properties, the Royal Palms Lodge and the Dakota Business Park, both located in Germiston Gauteng. The sellers, J Landman and Osborn Property will receive R13,5 million for the Royal Palms property and R32 million for the Business Park.

Unlisted Companies

Epiroc, a Stockholm-based developer and producer of innovative drill rigs, rock excavation and construction equipment, is to acquire New Concept Mining, a local manufacturer of rock reinforcement products for underground mining. New Concept Mining also has facilities in Peru, Zambia and Canada.

Partner Tech Corporation , a subsidiary of Taiwanese-listed Qisda Group, has acquired specialist ICT Distributor Corex. The financial details of the transaction were undisclosed.

Silversoft, a provider of enterprise software and information solutions for project-based and professional services firms and Deltek Platinum Partner, have acquired Magnetic, an agency management software firm based in Cape Town.

Centurion Law Group, a pan-African legal and business advisory group with experience in oil and gas law, has acquired IMANI-Africa Lawyers on Demand. Imani is an agile and flexible legal service solutions designed for short and long term legal projects for corporations and public institutions in Africa. Both companies are based in Johannesburg.

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DealMakers M&A Results Q1-Q3 2018. Merger and acquisition activity, as monitored by DealMakers, softened in the nine months to end-September when compared with the same period in 2017. The number of deals (excluding foreign deals of which there were 62 - deals by foreign domiciled companies with secondary listings on one of the local exchanges) fell to 316 deals against 336 deals in 2017.

Willem Jacobs, Director - Corporate and Commercial at Cliffe Dekker Hofmeyr, says while H1 saw good deal flow he has seen a tapering off since July. Initially, he says, clients were waiting for the ANC's December Conference, now investors are skittish, holding out for the general elections next year for a clearer picture. Investec Corporate Finance Head Eldad Friedman concurs with the view that the fall in M&A activity was most pronounced over the months July to end-September. This, he says, was felt especially in the equity capital market where introspection by institutions saw a decrease in appetite.

Friedman says there is no problem in seeing the deals but the decision by rating agencies looms large, the lack of investor confidence and the decline in corporate earnings all add to the noise which, he says, makes closing deals exceptionally challenging. Lower earnings by corporates make traditional evaluations of earnings potential difficult.

Deal flow, he says, has been buoyed by pockets of activity. For example, property funds have seen healthy deal flow as they divest of non-core assets. A further example is the sell- off by international companies of local assets. The types of deals are very different from that found during a bull market.

Corporate finance activity, especially in the last three months, gives some insight to the challenges being faced. The total value of corporate finance activity in the months July to end-September (Q3) 2018 was R39bn compared with R250bn in the 2017 period. If the R95bn NEPI Rockcastle listing is excluded, the value of R155bn in 2017 still shows a significant decline. In addition the type of activity by exchange-listed companies is telling, reflecting a focus on restructuring of businesses and debt, the unbundling of assets and repurchasing of stock on the open market. The value of share issues declined from R43bn to R9bn, the number of transactions involving share repurchases increased more than two-fold valued at R24bn, while the number of unbundlings more than doubled to 22 when compared with the same period in 2017.

What is interesting is the dearth of listings in Q3 this year of which there were just four compared with 13 over the same period in 2017. This feeds into Friedman's point that institutions currently lack appetite in equity capital markets.

Jacobs adds that the uncertainty, created by failed listing such as Consol, has resulted in listings being postponed until such time as there is more certainty in the ability to raise funds.

He says that unlike M&A, activity in the private equity space is still healthy. As for the reason, he points to the different time lines of the private equity funds - sitting on cash that has to be invested. The JSE downturn has broadened the pickings for these funds from private transactions to the possible inclusion of small-cap exchange-listed firms. A recent example of this is the announcement this week by private equity funds Metier Capital Growth Fund II and MCGF Investment of the acquisition and delisting from the JSE of Master Plastics.

Nhlanganiso Mkwanazi, Co-founder and Director at Medu Capital says there has definitely been an increase in the level of activity but long-term issues with the macro economy remain, putting pressure on industries exposed to commodities, capital expenditure projects and more recently the consumer environment. This, he says, has made valuations tricky with pressure on earnings and growth outlook. As valuations start moderating, becoming more aligned and in sync with the trading environment so activity will increase. There are, he says, pockets of activity in the private equity space at the moment; one such sector is telecoms which is seeing a major shift in the landscape particularly with regard to investment in infrastructure layers such as towers, fibre rollout, spectrum and data centres.

Mkwanazi says political changes and the focus on corporate governance has been positive for confidence levels as has the move by business leaders to step up and play a role. While this different narrative is positive it will take time to effect change. The levels of strong private equity activity last seen 2006/2007 are, he says, still some years away.

Analysis and rankings by DealMakers of M&A activity of each South African advisory firm (in relation to exchange-listed companies) is reflected below. The results are in respect of the first nine months of 2018 and show only the leading firms.

Advisory firm rankings in activities of general corporate finance for the first nine months of 2018 (reflecting only the leading firm) are as follows:

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Thorts - African mergers still face regulatory hurdles. One of the most significant hurdles for acquisitions in Africa remains regulatory clearances and, in particular, the need to gain approval from competition authorities.

Africa is home to a number of established and well-resourced competition authorities with jurisdiction to review proposed mergers and acquisitions, including in South Africa (where the Competition Commission has been in operation since 1999); Zambia (where the Competition and Consumer Protection Commission, previously the Zambia Competition Commission, was established in 1997) and Tanzania (where the Fair Competition Commission of Tanzania was established in 2003). Mergers are actively monitored and reviewed by competition regulators in Kenya, Botswana, Namibia and Mauritius. Competition authorities in Swaziland, Zimbabwe, Madagascar, Malawi, Egypt, Morocco, Tunisia and Algeria are increasingly active. New authorities are due to commence merger reviews in Angola and Mozambique, and amended competition legislation is in the pipeline in Botswana and Nigeria.

Regional bodies like the COMESA Competition Commission (CCC) also conduct merger reviews. The CCC, which commenced operation in January 2013, is constituted by a treaty between the Comesa states (Burundi, Comoros, The Democratic Republic of Congo, Djibouti, Egypt, Eritrea, Ethiopia, Kenya, Libya, Madagascar, Malawi, Mauritius, Rwanda, Seychelles, Somalia, Sudan, Swaziland, Tunisia, Uganda, Zambia and Zimbabwe). It has jurisdiction to review mergers that affect two or more states in the Common Market and which meet certain financial thresholds. This body was intended to create a "one-stop-shop" - like the European Commission - for investigation and clearance of mergers with a regional impact. However, some of its member states, including Zambia, Swaziland, Zimbabwe, Kenya, Mauritius and Egypt, already have their own established competition authorities in terms of national legislation. They were slow to give effect to the COMESA treaty in their local law, with the result that some local regulators insisted on separate merger filings (and additional merger filing fees) in addition to a filing in COMESA. This is still happening in Kenya, despite vociferous objections from merging parties. It remains a significant challenge from a timing and cost perspective, especially since so many COMESA merger transactions have a significant Kenyan dimension.

More regional competition law authorities have been established, including in the East African Community (EAC) (which includes the Republic of Burundi, Kenya, Rwanda, United Republic of Tanzania, and the Republic of Uganda) and the Economic Community of West African states (ECOWAS) (it has fifteen member countries, located in the Western African region). There has been significant confusion about whether these authorities have begun active enforcement, and clear communication to the business community and their lawyers about what the rules are, has been lacking. As they begin actively enforcing their powers, the cost of compliance will only increase.

Overlapping merger jurisdiction also creates challenges from a deal timetable perspective. For example, merging parties are not required to wait for a COMESA clearance before implementing their merger but the local competition laws of several member states - including in Kenya and Tanzania - make it an offense punishable by a substantial fine to implement a merger before it is cleared.

On the other hand, there is no regional merger review body in the Southern African region despite substantial amounts of regional trade and integration. Consequently, it is not uncommon for merging parties to be forced to prepare and lodge different merger filings, using different sets of merger forms, in South Africa, Namibia, Swaziland and Botswana - even if the merger raises no competition law concerns at all. There are no formal procedures for African authorities to share confidential information or to standardise their analysis, although this does happen to some extent on a bilateral basis. The South African Commission has attempted to facilitate greater regional co-operation through concluding memoranda of understanding with the Swaziland Competition Commission, the Competition Commission of Mauritius, the Competition Authority of Kenya and the Namibian Competition Commission but it is unclear whether these MOUs are contributing to more efficient merger reviews.

Many countries in Africa require that merger transactions be assessed to determine whether they impact on the "public interest", as well as competition in relevant markets. Conditions addressing merger related impacts - like job losses, a foreign acquisition of a national champion, an impact on national security (or other matters of national interest like preserving an iconic brand or preserving media plurality) - are now relatively common in South Africa, Namibia and Kenya, and increasingly also feature in Zambia, Tanzania and COMESA. Traditional economic analysis of whether a merger will have horizontal or vertical effects is relatively predictable. However, public interest objections to mergers may be hard to predict and scope ahead of lodging a merger filing, and are sometimes raised by third parties, like government departments or trade unions, well after a merger has been filed. Trade unions in particular are quick to participate in merger investigations if they think they can secure advantages like improved wages and working conditions, even though these issues may not be merger specific, and sometimes ought rather be the subject of collective bargaining or dispute in the labour courts, or enforcement by other government departments.

For example, in the recent Sibanye-Stillwater/Lonmin Plc merger, the Commission accepted that the merging parties had low market shares in the relevant international markets and the merger did not give rise to any competition concerns. However, the Commission recommended a condition that Sibanye embark on three short-term mining projects to avoid retrenchments and implement an Agri-Industrial Community Development Programme in the Rustenburg area. The Commission also recommended that Sibanye continue to honour the existing arrangements with the BEE Bapo ba Mogale Community, give effect to contracts with Lonmin's existing historically disadvantaged suppliers, and procure from new historically disadvantaged suppliers.

Debate about public interest conditions with regulators and third parties - including government departments - not only increases the cost of doing the deal but can significantly hold up transactions. Long delays spook shareholders and staff (a good example is the Vodacom/Neotel transaction, which collapsed before clearances from the competition authorities and the telecommunications regulator, ICASA, could be obtained). This has led some merging parties to actively engage with government and regulators at an early stage of planning their transactions, in order to agree on public interest conditions - but even so, it took global brewing giant Anheuser-Busch InBev nearly seven months to gain clearance from the competition authorities in South Africa for its acquisition of iconic South African brewer SAB. More recently, two separate bids to acquire the Chevron business in South Africa by Sinopec and a B-BBEE consortium were recommended for approval by the Tribunal after the parties negotiated a framework agreement with the Economic Development Department (EDD) to address public interest concerns like preservation of jobs after the merger; the continuation with CSA retirees' medical aid subsidy; the establishment of a development fund focused on, amongst other things, the development of small businesses and black-owned businesses; maintenance of B-BBEE shareholding post-merger; and a commitment to a significant investment in refinery capacity.

Many African leaders, including most recently, President Ramaphosa, have stepped up their efforts to attract investment in order to increase growth and stimulate jobs and development. These efforts should be supported by the simplification and streamlining of the merger review process, both at a national and a regional level. National and regional authorities should simplify their procedures and strive for efficient and transparent merger reviews. Wherever possible, transactions which raise no competition law concerns should be fast-tracked for approval. Investigations of public interest concerns should be limited to those which are merger-specific, and should be dealt with in a predictable fashion that does not unduly delay transactions.

Swift and predictable merger clearance processes are essential if Africa wants to be seen as a more attractive destination for investment.

Irvine is a Partner with Falcon & Hume.

This article first appeared in without prejudice, DealMaker's sister publication

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Who’s doing what in the African M&A space? DealMakers AFRICA

Panoro Energy, an independent exploration and production company based in the UK and listed on the Oslo Stock Exchange, which holds production, exploration and development assets in Africa, has reached an agreement with OMV Exploration & Production to acquire OMV Tunisia for a cash consideration of $65 million. The target holds a 49% interest in five oil producing concessions in Tunisia which are located onshore and shallow water offshore near to the city of Sfax and adjacent to Panoro's operated Sfax Offshore Exploration Permit.

Caledonia Mining is an exploration and development company focused on Southern Africa has agreed to buy back a 15% stake in the Zimbabwean Blanket gold mine from Fremiro Investments in a deal valued at $16,6 million. The acquisition will increase Caledonia's shareholding to 64%. The sale to Fremiro in 2012 was in line with the indigenization programme implemented by government.

XSML, a fund manager active in Central and East Africa, has announced its third investment via its African Rivers Fund in Ecopharm Uganda to finance further expansion of its outlets and acquire a pharmaceutical wholesaler. Ecopharm has a network of 12 pharmacies in Kampala selling branded pharmaceuticals, branded generic medicines as well as locally produced pharmaceuticals.

Petrobras, the semi-public Brazilian multinational corporation in the petroleum industry, is to sell its 50% stake in its Nigerian oil and gas exploration venture to a consortium led by Vitol for $1,53 billion. The other members of the consortium are Africa Oil Corp and Delonex Energy.

Enko Capital Managers, managers of the Enko Africa Private Equity Fund (EAPEF), a private equity investor targeting mid-cap growth companies across Africa has completed an investment to provide expansion capital to Imperial Homes Mortgage Bank, a Nigeria-headquartered mortgage lender.

HSBC, and UBS, have closed their offices in Nigeria.

MRG Metals, a mineral exploration company that listed on the ASX has reached a new sales agreement with the vendors of three heavy mineral sands projects in Moazambique.

KenolKobil is a pan African downstream oil company with operations spanning seven countries across Eastern, Central and Southern Africa, is to acquire up to 33 retail outlets from each of Delta Petroleum Uganda and Delta Petroleum Rwanda .

Africa Banking Corporation of Botswana, a subsidiary of Atlas Mara, has launched an IPO on the Botswana Stock Exchange prior to the company's listing on the exchange on December 10. 2018.

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Stefanutti supported by mining work. With limited public-sector infrastructure work available, the construction group has done well from increased mining sector work.

A recovery in mining activity has helped prop up Stefanutti Stocks in a tight market. The construction group says the number of tender enquiries and awards received from the mining sector has increased, while limited infrastructure work has been secured from the public sector.

Reporting interim results yesterday, Stefanutti said revenue from its Construction & Mining division rose 17% to R2.8 billion in the six months to end-August and now accounts for more than half of group revenue. That helped counter a 26% decline in Building revenue to R1.7 billion, while revenue from its Mechanical & Engineering division improved by 7.4% to R581 million.

Group revenue declined 1.1% to R5.1 billion and earnings before interest, tax, depreciation and amortisation (EBITDA) rose 20% to R241 million. Attributable earnings more than doubled to R223 million while diluted headline earnings per share increased by 43% to 53.97c per share. Earnings were boosted by a R38 million contribution from its business in the United Arab Emirates, up from R16 million. Like last year, it hasn't declared an interim dividend.

Its order book declined by 10.5% to R12.8 billion.

The group said short-term opportunities in the local market included surface mining related services, selected open pit mining contracts, urban developments, petrochemical tank farms, smaller oil and gas projects, pipelines, water and sanitation treatment plants as well as warehouses and some design and construct opportunities in the building sector.

As has already been widely reported, the South African construction market remains at a historic low," Stefanutti said. "Uncertainty exists with respect to the recently announced Government Stimulus Package. Depending on the detail relating to its implementation, this could create opportunities for various divisions within the group."

Its shares closed 7% higher at R3.20.

Discovery launches bookbuild to fund bank stake. The Competition Tribunal approved the transfer of FirstRand's stake in the Discovery card joint venture to Discovery Bank on Wednesday.

Discovery Holdings has opened an accelerated bookbuild to raise the R1.85 billion it needs to buy FirstRand's 25.01% stake in Discovery Bank. This was a requirement of the Registrar of Banks when it granted Discovery a banking licence last year. As part of the transaction, the Discovery card book and related assets will be migrated across to the new bank.

Discovery said the transaction will see it take over FirstRand Investment Holding's effective interest in the soon-to-be-launched bank, as well as its economic interest in their Discovery credit card joint venture. The share placement is being made to qualifying investors only and isn't open to the public.

Since the acquisition constitutes a new initiative and presents an important opportunity for Discovery, the board has decided that the acquisition should be funded by way of an equity issuance limited to the acquisition consideration," Discovery said.

Already, Rand Merchant Insurance Holdings, which owns 25% of Discovery's ordinary shares, has said it will apply for up to R464 million worth of the placement shares at the clearing price of the bookbuild, while Discovery directors including Adrian Gore, Barry Swartzberg and Herschel Mayers, who own 13% of Discovery between them, have committed to subscribe for R240 million of shares.

The Competition Commission recommended the deal to the Competition Tribunal, which approved it without conditions this week. The launch of Discovery Bank was delayed pending the transaction with FirstRand.

Discovery's shares ended 2.1% lower yesterday. It announced the bookbuild after the close of trade.

Outcome of Discovery Bank transaction and other Tribunal hearings -

-- Competition Tribunal (@comptrib) November 7, 2018

TFG credits diversification for resilient performance. The retailer has expanded its operations in the UK and Australia and has also seen a good take-up of online sales.

The Foschini Group (TFG) says it's had a difficult first half to its financial year in its three main geographies: SA, the UK and Australia. Still, it's managed to grow turnover strongly, thanks to acquisitions over the past year and a half. It says its diversification strategy in the UK and Australia has made it more resilient, as has its focus on controlling costs and investing in digital transformation.

That's paid off with a 15% rise in online buying in the six months to end-September after it added two additional TFG Africa brands to its online channel, including Donna and The FIX. Online turnover through 22 of its 28 brands now contributes 7.9% of group turnover.

Group retail turnover rose 28.6% to R15.9 billion in the six months to end-September, boosted by last year's acquisition of upmarket women's chain Hobbs in the UK and Australian menswear retailer Retail Apparel Group. Its gross margin improved to 53.6% from 51%. Headline earnings increased by 14.3% to a record R1.2 billion. Excluding the cost of acquisitions incurred in the prior period, headline earnings grew by 9.1%. Headline earnings per share came in at 5.6c, after the issue of 17.2 million additional shares last year diluted growth to 8.3%. It's declared an interim dividend of 330c per share, up 1.5%.

TFG expects trading conditions to remain challenging in all territories as consumer spending and business confidence remain under pressure.

The second half of the Group's financial year, as always, remains heavily dependent on Black Friday, Cyber Monday and Christmas trade," TFG said. "Retail trade performance for the first four weeks of our second half is at similar levels to the first half across TFG Africa, TFG London and TFG Australia."

TFG's shares closed 2.7% higher at R170.95 yesterday.

A2X gains scale as Standard Bank and AVI list. When the two companies start trading on the exchange next Thursday, it will have 13 listings with a combined market cap of more than R520 billion.

Standard Bank and AVI have joined the growing number of companies taking a secondary listing on the nascent A2X stock exchange, with both companies approved for inclusion from next Thursday.

A2X began trading just over a year ago and has now has 13 listed companies and nine leading brokers using its platform. The inclusion of Standard Bank and AVI raises the market capitalisation of companies listed on the exchange to over R520 billion.

Standard Bank will become the first bank to list on the exchange, which is aimed specifically at secondary listings, while AVI will become the first fast-moving consumer goods company. Standard Bank has a market cap of more than R283 billion while AVI is worth almost R40 billion and has a portfolio of more than 50 brands.

The A2X listings don't affect the companies primary listings or their issued share capital on the JSE. Standard Bank said the move was complementary.

We have listened to our institutional investors, who have called for this secondary listing, which will offer enhanced choice to investors to trade through A2X's platform and which demonstrates our support for the deepening and broadening of financial markets," financial director Arno Daehnke said.

Other companies listed on A2X include Anchor Group, Afrimat, African Rainbow Capital, Ascendis Health, Coronation Fund Managers, Growthpoint Properties, Huge Group, Peregrine, Sandown Capital, Sanlam and Sygnia.

Our pipeline of issuers remains healthy and trade on our platform is growing sharply as the industry adapts to have a lower cost alternative platform for trade," A2X CEO Kevin Brady said.

Standard Bank closed 3.4% lower on the JSE yesterday at R175.01, while the Banks Index closed 2% down. AVI gained 0.2% to R107.07.

Glad @A2X_Markets is doing well it's good news all around.

-- Greg Davies (@the_gregdavies) November 8, 2018

Bill Gates Aims to Save $233 Billion by Reinventing the Toilet. The billionaire philanthropist, whose Bill & Melinda Gates Foundation spent $200 million over seven years funding sanitation research, showcased some 20 novel toilet and sludge-processing designs that eliminate harmful pathogens and convert bodily waste into clean water and fertilizer.

"The technologies you'll see here are the most significant advances in sanitation in nearly 200 years," Gates, 63, told the Reinvented Toilet Expo in Beijing on Tuesday.

Holding a beaker of human excreta that, Gates said, contained as many as 200 trillion rotavirus cells, 20 billion Shigella bacteria, and 100,000 parasitic worm eggs, the Microsoft Corp. co-founder explained to a 400-strong crowd that new approaches for sterilizing human waste may help end almost 500,000 infant deaths and save $233 billion annually in costs linked to diarrhea, cholera and other diseases caused by poor water, sanitation and hygiene.

One approach from the California Institute of Technology that Gates said he finds "super interesting" integrates an electrochemical reactor to break down water and human waste into fertilizer and hydrogen, which can be stored in hydrogen fuel cells as energy.

'Substantial Market'

Without cost-effective alternatives to sewers and waste-treatment facilities, urbanization and population growth will add to the burden. In some cities, more than half the volume of human waste escapes into the environment untreated. Every dollar invested in sanitation yields about $5.50 in global economic returns, according to the World Health Organization.

"Human waste that is properly handled can be a very economically attractive investment due to the health benefits," said Guy Hutton, a senior adviser for water, sanitation and hygiene with Unicef in New York, in an interview. "Given the unmet need of 2.3 billion people still without basic sanitation, there is a potentially very substantial market and economic gain to be had."

The reinvented toilet market, which has attracted companies including Japan's LIXIL Group, could generate $6 billion a year worldwide by 2030, according to Gates.

'Golden Opportunity'

"Innovative companies have a golden opportunity to do well by doing good," LIXIL President Kinya Seto said in a statement. "We can help jump-start a new era of safe sanitation for the 21st century by developing solutions that can leapfrog today's existing infrastructure, functioning anywhere and everywhere."

Companies displaying their sanitation technologies included China's Clear, CRRC Corp. and EcoSan; Sedron Technologies LLC from the U.S.; SCG Chemicals, a unit of Thailand's Siam Cement Pcl; and India's Eram Scientific Solutions Pvt, Ankur Scientific Energy Technologies Pvt, and Tide Technocrats Pvt, the Gates Foundation said in an emailed statement.

The initial demand for the reinvented toilet will be in places like schools, apartment buildings, and community bathroom facilities. As adoption of these multi-unit toilets increases, and costs decline, a new category of reinvented household toilets will become available, the Gates Foundation said.

"Our goal is to be at 5 cents a day of cost," Gates said in a telephone interview before the exhibition. Small-scale waste treatment plants, called omni-processors, may be suited for uses beyond human waste management -- such as for managing effluent from intensive livestock production -- because of its low marginal running costs relative to the value of the fertilizer and clean water it produces, he said.

"The value of those outputs exceeds the operating cost," Gates said. "So you'll actually be looking for sources of biomass that keep it fully busy."

Gates, who with wife Melinda has given more than $35.8 billion to the foundation since 1994, said he became interested in sanitation about a decade ago after he stopped working full time at Microsoft.

"I never imagined that I'd know so much about poop," Gates said in remarks prepared for the Beijing event. "And I definitely never thought that Melinda would have to tell me to stop talking about toilets and fecal sludge at the dinner table." DM