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FIFI PETERS: The JSE got here out with its numbers at the moment [August 2, 2023] for the primary half of the yr, the six months to June. Revenue is up 10% even though the financial system was strained.
We’ve got Leila Fourie, the CEO of the JSE, with us for extra on the numbers. Leila, thanks a lot on your time. It has been fairly an eventful yr if we take a look at what has occurred up to now six months – the continuation of the Russia-Ukraine struggle; in March, we had the allegations round Woman R that made the rand blow out as we’re seeing at the moment; and naturally, the truth that South Africa’s financial system primarily continues to simply limp alongside.
How has the interval underneath evaluate been for you?
LEILA FOURIE: Fifi, however the complexity within the world and native macroeconomic and political setting, we’re more than happy to have reported a strong set of financials. Our headline earnings per share had been up 12%, and our internet revenue after tax was up 10%. I’m significantly happy with the standard of those earnings.
We had a subdued fairness market and, regardless of a 6% contraction in that fairness market, we managed to report income progress of 5%.
That was actually off the again of diversified new enterprise, and we’ve very deliberately grown that diversification of income.
FIFI PETERS: Earlier than we discuss that new enterprise – as a result of I can see the sturdy enhance on that facet – I need to discuss in regards to the previous enterprise, since you take a look at the JSE and one factor that folks know the JSE for is attracting new corporations on its platform to record and rising its income in that regard.
I used to be talking with the CEO of the Botswana Inventory Change the opposite day, and he was speaking about the truth that the financial system was nonetheless robust. Consequently, what he was discovering over at his finish is that a number of corporations [have] introduced sizeable alternatives for private-equity gamers, and it has been very engaging for them to purchase these corporations out, resulting in delistings on the [BSE]. I need to discuss to you about that towards the backdrop of the South African financial system. Listings – what are these trying like? And are you frightened about delistings proper now?
LEILA FOURIE: Fifi, delistings have largely been a operate of both consolidation or takeouts, company motion, and lots of of these corporations nonetheless stay on the JSE as a part of a broader group.
The opposite delistings that we’ve seen have largely been within the small and mid-caps. In case you have a take a look at our market cap, that has grown yr so far by 11%, indicating that there’s the next worth to commerce than was the case final yr. And there are a few essential indicators and examples out there.
Final yr BHP Billiton did a share consolidation – beforehand listed on the London Inventory Change, the JSE and the Australian Inventory Change, they selected to record their consolidated organisation on the ASX, the Australian Inventory Change, and the JSE in favour of the London Inventory Change. I believe it is a crucial sign of the liquidity and the depth of the market in South Africa.
That doesn’t ignore the advanced and troublesome headwinds that we face within the macro setting. And naturally listings which might be probably within the pipeline will likely be ready for extra certainty and for constructive macroeconomic sentiment and usually substantiated numbers.
FIFI PETERS: Is that what’s taking place? Leila, if we take a look at possibly your expectations for brand new listings firstly of the yr in comparison with the place issues stand proper now, are corporations placing their debut on the JSE on maintain, simply ready for the solar to shine once more?
LEILA FOURIE: We’re actually seeing that whereas there’s a rising kind of pipeline within the background, corporations are ready for macroeconomic and political certainty.
However what now we have additionally seen is that response cycles are a lot tighter. There are faster reactions, and shifts are even quicker, so actually I believe [these are] massive essential dynamics regarding inflation and recessionary fears – the US significantly. However the UK and EU may even play an essential position in emerging-market investor urge for food flows into South Africa.
After which regionally, the political uncertainty round any election yr is at all times an essential aspect, and the flexibility of the nation to handle by the facility scenario is one other dynamic that actually requires a degree of certainty and confidence. So all of those elements work collectively in an organization’s willingness or need to lift capital.
Fifi, it’s essential to notice that non-public fairness can are usually cyclical too, and beforehand it was less expensive to lift debt than fairness. That’s all altering now.
We do are likely to see this pendulum shifting over the financial cycles.
FIFI PETERS: Let’s discuss in regards to the new facet of the enterprise then, the place you reported double-digit progress in your data companies enterprise, or the JSE Investor Providers platform and the personal placement platform, I consider. I do know that it’s been a yr or two because the JSE began to focus much more on serving to smaller corporations, simply connecting with capital and facilitating their progress.
As you discuss in regards to the new enterprise strains, Leila, and the plans there, I’d additionally wish to know what is occurring with the platform that was targeted on smaller to medium companies.
LEILA FOURIE: Fifi, now we have grown our markets by various progressive new marketplaces and companies.
The primary one you talked about is our personal placements market. That is infrastructure that allows; it’s much like a personal fairness capital-raise setting, simply barely extra standardised. We’ve managed to develop that platform tremendously. We now have 29 corporations trying to increase capital on that platform, and we’ve grown the investor capital dedicated by potential traders from R12 billion on the finish of final yr to R18 billion at the moment. So we’re very delighted and more than happy with the success of that.
As well as, we’ve launched different progressive options. An change world first in our hyperlink up which we introduced final week with ‘massive xyt’ delivers a really distinctive and bespoke market-trading knowledge device. So merchants are in a position to monitor their efficiency, their liquidity, their market share at sure instances within the day or all through the day in sure shares. This offers them crucial data of their buying and selling methods. Both they feed that in by algorithms in the event that they commerce that approach, or they use them to redefine and modify their buying and selling methods.
We’re additionally trying right into a carbon market, a voluntary carbon market and renewable power certificates. I believe this is a crucial new resolution that we might look to develop into the continent and throughout Africa. So we’re actually tackling innovation and progress throughout various crucial new market alternatives.
FIFI PETERS: That’s fairly attention-grabbing – the carbon market that you just’re taking a look at probably rising. Is that much like what Zimbabwe is at present doing and what I believe Zambia can also be taking a look at probably beginning?
LEILA FOURIE: Plenty of totally different international locations need to begin that. What we consider is basically essential within the carbon market is a community impact. Africa has many carbon sinks, and we’re in a position to permit our international locations to monetise that. To be able to successfully monetise it, they must be priced on a world market. If we collaborate and we work collectively we’ll present and create a way more highly effective resolution to the remainder of the world.
So our imaginative and prescient is basically to work with different African international locations in constructing a carbon market.
We’re additionally taking a look at creating, for instance, carbon futures on the South African market. It’s a multifaceted resolution that we’re investigating and we’ll actually come to market as quickly as we’re able to make any formal bulletins.
FIFI PETERS: Leila, in parting, a query on the outlook of South Africa’s financial system particularly, which in the end does have an effect on the JSE to the diploma that it influences the selections of corporations to come back to markets or not. We’re listening to fairly various CEOs are signatories of a pledge to assist the federal government in key areas – power, logistics, safety – to try to repair the nation and develop it extra. Your tackle that? Are you a kind of signatories which have pledged to assist repair SA?
LEILA FOURIE: I’m actually a part of that group and just about endorse all the things that non-public and public-sector partnerships are looking for to attain. All of that’s underpinned by a piece stream on narrative and ensuring that South Africa is ready to current a balanced view of the place the nation is at.
We’ve had nice reception from the president and his ministers, and I’ve been actually inspired by the very constructive ‘can do’ perspective of the personal sector, and the willingness to step in and do what’s required. We expect that a lot must be achieved to harness the private and non-private sector collaboration in resolving a few of these challenges that we’ve been dealing with.
FIFI PETERS: Leila, we’ll go away it there, ma’am. Thanks a lot on your time. Nice to catch up as at all times. Leila Fourie is the CEO of the Johannesburg Inventory Change.
LEILA FOURIE: Thanks.