JSE lists single stock future on Facebook
Local investors can gain exposure to social network group Facebook, without using their foreign allowance allocation, the JSE said on Friday (18, May).
Investors can make use of today’s listing of Single Stock Future (SSF) contract on the JSE, which was timed with Facebook’s Nasdaq IPO, the group said.
Priced at $38 per share, Facebook’s initial public offering is expected to generate at least $16 billion. This makes it the third-largest IPO in US history and by the largest of any US internet company.
“Exposure to Facebook is through the suite of Single Stock Futures (SSFs) listed on the JSE that track performance of the selected international companies. Called International Derivatives or IDX, the range of products includes SSFs on companies such as Nokia, LVMH Moet Hennessy Louis Vuitton, Bank of America, Apple and Berkshire Hathaway,” the JSE said.
“These derivatives offer local investors the opportunity to gain exposure to international blue-chip companies without dealing with a foreign bank or broker,” added Magnus De Wet manager: derivatives specialist at the JSE.
The JSE further explained that the Facebook SSF can be purchased through any JSE-registered broker in the same way that one would purchase local derivatives products.
“While retail investors and corporate entities do not have any exchange control restrictions in trading the instrument, institutional investors do have to comply with foreign portfolio regulations. Contracts are priced and settled in Rands. If the Rand depreciates, then the local investor will benefit, allowing IDX products to be used as a rand hedge,” the group concluded.
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