African Rainbow Capital has acquired a 49% interest in Sinayo Securities, a Johannesburg-based equities brokerage firm, to expand its institutional client base and broaden its brokerage services.

The company will in future operate under dual branding.

Babalwa Ngonyama, CEO of Sinayo Securities, said: “We believe that this partnership will unlock opportunities for our business. ARC will enhance our service offering as it brings a depth of financial services experience and industry relationships that will be of benefit to our business and its clients.”

The acquisition of Sinayo by ARC will significantly bolster Sinayo’s capital base, allowing it to execute large trades for clients and lift its daily trading capacity. 

Prior to the transaction, Sinayo’s limited capital base had restricted its ability to break into equity brokerage opportunities that entail extremely large lines of securities.

“Due to ARC’s significant investment in our brokerage firm, our capital adequacy is more robust than was the case before ARC became our equity partner. We are now in a position to facilitate and assist our clients when they trade large volumes and baskets of equities,” said Ngonyama.

“We are confident that our partnership with ARC will open doors for Sinayo to do business with large asset managers and financial institutions,” she added.

Sinayo Securities is a South African, independently owned and managed, broad-based BEE, Member of The Johannesburg Stock Exchange.

The firm specialises in South African listed company’s equity sales and trading.

Sinayo was established by two black women in May 2015, and ARC’s investment in Sinayo has been hailed as a boost for transformation in the securities industry which is dominated by white-owned firms.

“This transaction will have a ripple effect throughout the financial services industry as black women are beginning to take up leadership roles in our industry. As women become leaders in the financial services industry, they will create footprints for other women to follow. The deal could also be a catalyst for a culture of inclusion and transformation,” said Khumo Shongwe, chairwoman of Sinayo.

ARC, an investment management company chaired by successful businessman Patrice Motsepe, is confident that the injection of fresh capital will support Sinayo’s growth plans and ensure that the brokerage firm expands into new markets.

Johan van Zyl, CEO of ARC, said: “This transaction enables Sinayo Securities to expand the scope and capacity of its brokerage activities over the medium term to include a large number of portfolio trades, equity derivatives trading, and participation in an international equities trading platform with access to global equities research.”

“Progress on the international front will unlock opportunities for Sinayo to execute international equity trades on behalf of domestic and offshore clients,” he said.

While there will be no change in the management of Sinayo after the conclusion of the transaction, ARC’s senior executive team will be represented on the board of directors of Sinayo, where their strategic advice will assist in propelling the growth of the brokerage firm.

New resources will be recruited in the event that growth in the business necessitates employment of additional personnel.

The management team of Sinayo boasts top-rated traders with extensive experience gained from their previous roles as senior traders at global and top local brokerage firms, where they facilitated the distribution of extremely large lines of securities.

Sinayo’s transformation and community development initiatives aimed at boosting the number of black professionals in the securities caught the attention of ARC. 

The flagship of these initiatives is Project Funda, which is a financial markets training programme targeting black graduates, particularly women.

“On the community development and skills development front, ARC will provide Sinayo Securities with additional annual financial support. This will allow Project Funda specifically, to extend the employment placement assistance for graduates even further,” concluded Motsepe.