SG Warburg buys into leading SA stockbroker

SG Warburg, the UK investment bank, is buying half of the South African stockbroker Ivor Jones, Roy in a deal which will give Warburg exclusive rights to distribute IJR's research on South African companies internationally.

The link-up follows similar deals by Smith New Court and Flemings as UK businesses return to South Africa.

Warburg has agreed in principle to buy 50 per cent of IJR. The deal will take some months to go through as it needs the formal agreement of the South African parliament and the Johannesburg stock exchange.

IJR is one of the leading brokers in South Africa with offices in Johannesburg and Cape Town. It concentrates on research, and is active in equities and fixed-interest securities on an agency basis.

Warburg said its leading position in international equity research and distribution would enable it to build a major international primary and secondary market business in South African securities.

The UK bank also wants to expand its international corporate finance services for private-sector South African companies, and will boost this by founding a new office in Johannesburg, separate to IJR.

Warburg declined to say how much the deal would cost but said it would not be material in the context of its net assets.

Smith New Court has said it is buying 30 per cent of Davis Borkum Hare, the South African stockbroker, and is setting up a joint office in New York to market South African equities to US pension funds.