https://www.engineeringnews.co.za

JSE weathers political, economic storms

29th February 2016

By: Megan van Wyngaardt

Creamer Media Contributing Editor Online

  

Font size: - +

The JSE on Monday posted strong results for the year ended December 31, notching up a 20% increase in operating revenue to R2-billion and a 16% increase in net cash flow to R888-million.

This translated to a 42% increase in earnings a share to R10.51 apiece, as well as a 40% increase in headline earnings a share to R10.26 apiece.

CEO Nicky Newton-King said the JSE had worked “really hard to diversify its equity streams” and that 2015 was an exceptional year.

The strong growth was recorded despite the economic turmoil the country was facing, including the reshuffle in the Finance Ministry during the fourth quarter, which resulted in the rand plummeting and the JSE handling unprecedented trading volumes, driving its market capitalisation down by R170-billion.

The results also came on the back of strong performance in the JSE’s capital markets, with the primary market, which contributed 8% to total revenue, climbing 20% to R151-million, owing to healthy listings activity.

The JSE’s equity market, contributing 26% of revenue, climbed 35% to R501-million, while bonds and financial derivatives also saw a 21% increase to R257-million. Commodity derivatives, currently only contributing 4% of revenue, climbed 33% to R74-million.

Newton-King noted that the JSE would, this year, focus on introducing deliverables on white maize, wheat and soybeans, while exploring ways to provide financial participants with access to a South African commodity index.

FACING COMPETITION
On the issue of possible competition from new stock exchanges opening in South Africa, Newton-King highlighted that the JSE had been the sole stock exchange provider for 128 years.

“However, we don’t take the fact that we operate this market as the only licensed exchange for granted. We have worked extremely hard to ensure that we have products that are diverse enough for our customers, paired with a price that is continually trending down,” she pointed out.

Last year, two companies – The 4 Africa Exchange and ZAR X submitted applications to the Financial Services Board for stock exchange licences.

The two licence applications were largely aimed at accommodating over-the-counter-traded companies, such as black economic-empowerment schemes and agricultural cooperatives. If successful, this could diversify the operation of stock exchanges in South Africa beyond the JSE.

Newton-King quipped that “even the talk of competition has really energised the staff”.

Asked whether the introduction of competition would have a great impact on the JSE’s equity trading fees, Newton-King said it would all depend on the pricing the competition came in at.

OUTLOOK
Newton-King further highlighted that the year ahead would not be any less challenging than 2015, adding that capital market activity, which regularly saw the index at record highs, would be unsustainable.

“This requires all of us to think about how we can add to the growth story in the real economy. This means that our policy-makers are facing difficult choices while trying to achieve stable macroeconomic conditions.

“Those choices require swift, targeted action that builds inclusive growth, fiscal prudence and investor sentiment,” she noted.

Edited by Chanel de Bruyn
Creamer Media Senior Deputy Editor Online

Comments

Showroom

Weir Minerals Africa and Middle East
Weir Minerals Africa and Middle East

Weir Minerals Europe, Middle East and Africa is a global supplier of excellent minerals solutions, including pumps, valves, hydrocyclones,...

VISIT SHOWROOM 
John Thompson
John Thompson

John Thompson, the leader in energy and environmental solutions through value engineering and innovation, provides the following: design, engineer,...

VISIT SHOWROOM 

Latest Multimedia

sponsored by

Option 1 (equivalent of R125 a month):

Receive a weekly copy of Creamer Media's Engineering News & Mining Weekly magazine
(print copy for those in South Africa and e-magazine for those outside of South Africa)
Receive daily email newsletters
Access to full search results
Access archive of magazine back copies
Access to Projects in Progress
Access to ONE Research Report of your choice in PDF format

Option 2 (equivalent of R375 a month):

All benefits from Option 1
PLUS
Access to Creamer Media's Research Channel Africa for ALL Research Reports, in PDF format, on various industrial and mining sectors including Electricity; Water; Energy Transition; Hydrogen; Roads, Rail and Ports; Coal; Gold; Platinum; Battery Metals; etc.

Already a subscriber?

Forgotten your password?

MAGAZINE & ONLINE

SUBSCRIBE

RESEARCH CHANNEL AFRICA

SUBSCRIBE

CORPORATE PACKAGES

CLICK FOR A QUOTATION







sq:0.084 0.138s - 174pq - 2rq
Subscribe Now