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RGT and Wilderness are two of the new listings with both having had less than a full months trading in their shares to date. There are numerous differences between the businesses, in fact, there are more differences than there are similarities...yet both business decided to list in the current environment. Wilderness listed on both the JSE (Africa Board) and the Botswana Stock Exchange and currently has a market cap of around R1,3 billion. This is sharply up from where it listed at, as late last week the Group released cautionary as one of its associated companies has entered into negotiations. More than likely these negotiations relate to an acquisition as one of the Group's reasons for listing was to "...provide access for Wilderness Holdings to a future source of equity capital as required to take advantage of future growth opportunities." The market reacted well this announcement and the WIL share price on the JSE jumped 14.77% on Friday to 575c. This is just below its all-time high of 600c. On the other hand, RGT carried a lot of criticism for it small and expensive listing (market cap is around R56 million). Around a quarter of the money it raised went to footing expenses incurred in the listing. Either some people thoroughly disagreed with this general consensus or had a point to prove, but shortly after listing the RGT share price was pushed up to a high of 34c on light trade. 34c is over three times the listing price of 10c per share and implies that just by listing the business it tripled in value. Somehow I don't think so.
This light volume supporting a tripling in RGT's market cap has subsided (as light volumes tend to) and the share price has slowly been settling down closer and closer to the listing price. Just after RGT listed the Group released a BEE deal cautionary. Now, all the Group's talk of raising future funds and future growth aside, just the BEE deal may create a strong arguement for the Group's listing: if a significantly improved price is obtained for the equity issued for the BEE deal after listing than before the listing, then the difference could well outweight the minor R1,6 million paid to list... But this point has strangely not been raised. Either way you look at it, it is an interesting barrometer of market sentiment to look at the current trades going through these two listings.
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