Africa’s largest stock exchange is “exploring collaboration opportunities” with data vendors in southeast Asia, Fourie says. Information services contributed about 15% of the JSE’s revenue in the last financial year and “continues to be an area of focus for the exchange,” she adds.
The JSE agreed with China Investment Information Services Limited (CIIS), a subsidiary of the Shanghai Stock Exchange, to provide JSE market data access to local distributors in mainland China in November 2020. In the first six months of this year, the JSE’s revenue excluding currency changes from information services showed growth of 9%, while equity and bond market revenue declined.
The exchange is seeking to develop new products and diversify its sources of revenue as a weak South African economy restricts the pipeline of new issues. There has been a long-term decline in the number of companies listed on the exchange, from 776 to 330 in the past 30 years. A further 21 companies delisted this year to September.
- The JSE in August launched multi-asset indices with FTSE Russell, which allow clients to combine local and international fixed income, property and equity indices into a single benchmark.
- In November 2020, the JSE bought a stake in UK fintech Globacap to create a private placement platform for Africa infrastructure projects. As yet there is no timeline when the platform will be ready.
- The exchange this year also finalised the buyout of minority shareholders of JSE Investor Services (JIS), and concluded a deal with Investec Share Plans Services to acquire their share registry business.
- Further acquisitions may be in the pipeline. “Inorganic growth is very much a part of our group strategy,” Fourie says.
The exchange also faces new competition in the shape of the Cape Town Stock Exchange, launched in October to target smaller companies. Fourie says she welcomes the new competition.
The JSE has launched a sustainability segment which offers debt securities for ESG-focused projects. To date, these have been oversubscribed by between three and four times, indicating healthy demand, Fourie says.
- The exchange is expanding the segment and hopes to include a new subset of bonds, “Transition Bonds, which will support investment in the Just Transition,” says Fourie, who is co-chair of the United Nations Global Investors for Sustainable Development Alliance.
Fourie is cautiously optimistic that the government’s economic management and energy sector reforms can provide a tailwind. The medium-term policy budget statement (MTBPS) this month contained “important positive signals” including greater discipline in long-term spending commitments and a lower debt trajectory over the medium term, she says. “This reinforces the government’s commitment to fiscal consolidation,” she says.
- “The JSE welcomes reforms to diversify energy generation to alleviate electricity supply shortages and other steps being taken towards a more competitive energy market.”
- “Further reforms related to a spectrum auction and tourism as well as a commitment to a green transition will be positive for an economic recovery,” she adds.
The JSE is betting that Asian investors will want to diversify and buy into African growth potential.
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