AltX: The exciting parallel market of the JSE

The Johannesburg Securities Exchange's Alternative Exchange, the AltX, is a thrilling parallel market which focuses on good quality, small and medium sized, high growth companies.The AltX is aimed to appeal at family-owned businesses, black economic empowerment companies, junior mining companies and fast-growing, young businesses including start-ups.

The purpose of the AltX is to enable a diverse range of companies to raise money without having to endure, and pay for, the arduous qualification process and subsequent regulatory requirements of a listing on the Main Johannesburg Board. The following table summarises the main differences in admission criteria for the Main Board and the AltX.

Corporate refugees, gold diggers and opportunists... they all find a home on the AltX!

The most important item in the table is that companies can come to the AltX with no trading record. Ideally, all AltX debutantes should be run by budding entrepreneurs, with all the ingredients for a successful business -except capital. Investors would provide that capital in return for the high potential reward of backing a new business.There are now 67 companies listed on the AltX, compared to only four listings in 2004 when it launched. And it's expected to continue to grow at this fast rate. The VCM (Venture Capital Market) and the DCM (Development Capital Market) are expected to be dissolved soon so many of these companies will most probably find themselves subsequently listed on the AltX. Numerous benefits exist for companies listed on the AltX. It enables access to long-term investment capital for development in the business, and access to a central trading facility, which thereby provides liquidity. It also improves the company's image amongst suppliers, customers, staff and other stakeholders owing to the prestige associated with being a listed entry.For you, the budding investor, it allows you the opportunity to diversify your share portfolio by investing in a wide range of high-growth, small and medium sized companies. You can have confidence in the AltX as it is strictly regulated by the JSE, which provides you with sound investor protection.The Red Hot Portfolio can only prosper with all these promising listings to pick fromThe AltX has performed impressively since its conception and is growing very nicely. It's allowed many companies to float themselves on the stock exchange and reap the associated benefits.It would do well to remember the following quote from Aaron Levenstein: "Statistics are like a bikini. What they reveal is suggestive, but what they conceal is vital." As for Red Hot Penny Shares, I will continue to recommend companies of real substance, and not paper kites.Best of all, you can TRY Red Hot Penny Shares for a whole month before you pay anything at all. Start your no obligation trial today!

The past is not a guide to future performance. Trades in stocks recommended by Red Hot Penny Shares are small company shares. By their nature, such investments can be relatively illiquid and, as a result, hard to trade. This makes such shares more risky than other investments. Please seek independent financial advice if necessary. Profits from share dealing are a form of income and subject to taxation. Levels and bases of, and reliefs from, taxation are subject to change, and depend on individual circumstances.