JSE’s share price is up 25% in the past year. Someone is not paying attention.

By Alec Hogg

The father of disruption theory, Clayton Christensen, explained that those who successfully challenge the status quo start quietly, almost by stealth. No big launches or headline-grabbing predictions. Their teams stay focused, humble and work hard.

People walk near the reception at the Johannesburg Stock Exchange (JSE) in Sandton, on December 10, 2015. REUTERS/Siphiwe Sibeko

Those behind A2X, the first serious threat to the Johannesburg Stock Exchange in its 129 years of existence, appear to have read the disruptor’s handbook, Christensen’s classic The Innovator’s Dilemma. They’re following the Harvard Prof’s script rather closely.

A2X launched ten months ago with just three listings and little fanfare. Yesterday it announced that next week R80bn market cap Growthpoint Properties will become its tenth listing. Growthpoint CEO Norbert Sasse said although his group will retain its primary listing on the JSE, having a secondary listing on A2X gives shareholders the ability to trade at lower transaction costs.

This is classic disruption. By the time incumbents wake up to what was an easy to ignore competitor, it is usually too late. Ask hoteliers, newspaper proprietors and, as Christensen splendidly documents, the US steel industry. The JSE’s share price has risen 25% in the past 12 months. Someone is clearly not paying attention.