Major international company exits South Africa
Online trading provider, IG Group is shutting down its operations in South Africa—but local customers will still be able get service.
The IG Group is a London-based online trading provider which focuses mainly on the complex world of spread betting and CFD trading.
These services allow customers to bet on the direction of assets, such as bonds and equities, without holding the underlying assets.
Established in 1974, the company is worth £3.9 billion (roughly R95 billion), listed on the London Stock Exchange, and is a constituent of the FTSE 250 Index.
The group expanded into South Africa in 2010 following the establishment of IG Markets South Africa. The local subsidiary has been regulated by the FSCA, and has a dual purpose.
Firstly, it is designed to give South African traders access to thousands of financial markets. Secondly, it is to serve as an operational hub that provides services to the wider IG Group.
Based in Sandton, the board and senior management of the local subsidiary mainly consists of South African clients.
The company prided itself on meeting the needs of clients in the country and received numerous awards in recognition of this.
However, according to FinanceMagnates.com and renowned finance journalist Simon Brown, the company stopped clients under its South African unit from opening new positions in late May.
The company will also close all open positions on 28 July. That said, South Africa, with accounts under the group’s offshore entities, can retain their accounts.
In an email sent to clients, the group said it discontinued its domestic trading accounts denominated in rands. The company thus provided a notice of termination.
“This decision wasn’t made lightly, and our priority is supporting you through a smooth transition,” the email said.
“We have decided to offer an extended notice period of 60 days to provide you with additional flexibility in determining when you want to close out your open positions.”
BusinessTech attempted to contact the IG Group’s South African representative for comment, but received no response.
International companies closing shop
The IG Group has joined a growing list of companies that have either quit South Africa or reduced their presence in the country.
French-based BNP Paribas ceased to operate as a bank in South Africa at the start of 2024. This formed part of the world’s sixth-largest bank’s plan to scale back in Africa to focus on Europe and Asia.
UK-based bank HSBC also announced that it would transfer the business of its South African branch to FNB-owner FirstRand.
Oil giant Shell also announced its plan to sell its downstream business, which includes its petrol stations across the country.
Bloomberg reported that Abu Dhabi National Oil Co. and Swiss commodities trading firm Gunvor are the front-runners to take over the downstream business of Shell.
However, Shell will not completely exit South Africa, with the group keeping its upstream business.
Popular household container brand Tupperware is also exiting the country after its parent company in the USA filed for bankruptcy.
Another popular household name in streaming service Britbox, which the BBC and ITV operate, also pulled out of South Africa in August 2024. Most of this content is, however, still available on DStv.
Jumia Technologies, which operated Zando in South Africa, also exited the country amid competition following the arrival of discount Chinese brands. The Foschini Group’s Bash bought Zando’s domain.
The UK-based leading online tyre store, Blackcircles, stopped operating in South Africa in September 2024.
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