Absa, one of SA’s largest banks, has invested an undisclosed amount in alternate stock exchange startup A2X Markets, the exchange said on Wednesday.

The bank was invited by A2X to participate in its capital-raising initiative, which was launched at the end of 2019. Absa now owns a small stake in A2X. 

Absa head of equities Quintus Kilbourn said, “the team at Absa corporate and investment banking are always looking for innovative ways to save money for our clients and support the industry in which we operate. As a broker, we believe in an efficient and progressive marketplace and our investment in A2X shows our support for this.”

A2X Markets, which started trading in October 2017, is one of SA’s alternative stock markets and provides trading at reduced costs. It has 37 listed companies — inlcuding JSE heavyweight Naspers — across major sectors such as mining, media, banking retail and healthcare. Its market capitalisation is in excess of R2-trillion.

“Many of SA’s top companies are already listed on A2X, including eight top 40 constituents, three Absa precious metal exchange-traded funds (ETFs), and two Investec exchange-traded notes (ETNs),” A2X said in a statement.

A2X CEO Kevin Brady said that Absa’s investment in A2X is a vote of confidence in what the company is doing in SA.

“Effective competition in an industry drives market efficiency and this benefits all users, including individual investors and pensioners,” he said. “By offering lower costs, we are able to create a better market to grow the overall industry.”