Anheuser-Busch InBev Starts Trading on Johannesburg Stock Exchange

JOHANNESBURG—The world's biggest brewer, Anheuser-Busch InBev NV, began trading on the Johannesburg Stock Exchange Friday, the latest in a series of multinational heavyweights to complete a secondary listing in South Africa, strengthening the local bourse even as the broader economy continues to decelerate.

Mega-brewer AB InBev's listing is the most recent step in its more than $100 billion quest to acquire SABMiller PLC, which has its ancestral home in South Africa.

SABMiller is the exchange's second-largest company by market capitalization, and local investors had expressed concerns that an acquisition by AB InBev could mean losing access to both a major beer company as well as leave them with fewer options for tapping global growth through the JSE. The secondary listing is AB InBev's solution to that problem.

South African regulators allow pension funds to invest just a quarter of their assets offshore. The remaining three-quarters have to be invested in South African-listed companies, a designation for which AB InBev now qualifies. The secondary-listings of major multinationals on the JSE, including mining behemoth BHP Billiton Ltd, luxury goods giant Cie. Financiè re Richemont SA and British American Tobacco PLC, which sells one in eight cigarettes smoked world-wide, have boosted the exchange, and the fortunes of local investors, despite a declining domestic economy.

"Pensioners are a lot wealthier than what they would have been as a result of the structure of our stock market," said Rhynhardt Roodt, portfolio manager of the 9.3 billion South African rand ($562 million) Investec Equity Fund. "We were very fortunate. These global multinationals just seem to continue to do well despite a fragile local economy and the weakening rand."

Economists believe growth in South Africa could decelerate for the third consecutive year in 2016 to less than 1% annually, as demand for South Africa's minerals continues to fall and more of its factories succumb to rising labor costs and erratic electricity supplies. Meanwhile, the rand has been plumbing all-time lows against the U.S. dollar and other currencies.

SABMiller's precursor South African Breweries relocated from Johannesburg to the U.K. in 1999, amid a bout of corporate flight from South Africa, which at the time—as now—was suffering from a falling currency and limited access to international investors.

Still, AB InBev Chief Executive Carlos Brito said the listing of the company in Johannesburg was "a significant vote of confidence in South Africa as an investment destination."

Write to Alexandra Wexler at [e-mail]

(END) Dow Jones Newswires

January 15, 2016 05:35 ET (10:35 GMT)

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