Exodus from the Johannesburg Stock Exchange: a qualitative exploration of the rationales for de-listing

Purpose The amount of listed companies on the Johannesburg Stock Exchange has fallen drastically since the 1990s. Prior international studies had identified consolidation and listing requirements as the primary drivers of delisting activity across a variety of exchanges; however, the evidence regarding the Johannesburg Stock Exchange is sparse and much of the literature considers financial determinants or only voluntary types of delistings. This study aims to fill this gap in the literature and to improve our understanding of why companies delist from the exchange. Design/methodology/approach The last stock exchange announcements by delisting companies often contain a detailed rationale for the decision. In this study, a content analysis design was applied to these announcements to determine why companies were delisted from the exchange, with a descriptive regression analysis conducted to ensure the robustness of the findings. Findings A substantial sample of 300 announcements was analysed to find that consolidation accounted for more than half of all delisting activity from 1999 to 2022, while the bulk of delistings took place in the early 2000s. Listing requirements, primarily related to the cost/benefit relationship of maintaining a listing, was found to be the second most common reason for delisting, while liquidations were the third most common. Originality/value This study added to the literature by providing a holistic overview of all types of delistings across a large sample over a substantial period. Interestingly, motives for delisting captured in few or no other studies were observed in the study, namely, moving to an exchange meant for smaller companies or to change the name and sector affiliation of a company, among others, which were both found to account for 2% of overall delisting activity.