The Johannesburg Stock Exchange Limited (JSE) delivered a strong performance in the six months to 30 June 2013, with operating revenue increasing 16 percent to R794 million (H1 2012: R683 million) as a result of increased trading activity in the equity, financial derivatives, interest rate and currency markets as well as continued robust performance from the JSE’s post trade services and market data divisions.
The Johannesburg Stock Exchange Limited (JSE) delivered a strong performance in the six months to 30 June 2013, with operating revenue increasing 16 percent to R794 million (H1 2012: R683 million) as a result of increased trading activity in the equity, financial derivatives, interest rate and currency markets as well as continued robust performance from the JSE’s post trade services and market data divisions.
These results are significant, reflecting the impact of strong trade volumes as well as our investment in initiatives that grow the business, says chief executive officer, Nicky Newton-King.
“We are now realising benefits from the new equity market trading and information platforms, for example.
“The JSE will continue to invest in those areas of our business which will build long-term sustainability.”
Group earnings increased 191 percent to R293 million (2012: R101 million) and Group headline earnings were up 35 percent to R285 million (2012: R211 million) driven by the Group operating revenue performance and the effect of the impairment in the comparable reporting period (H1 2012: R72.6 million).
The strong growth in trade volumes in the equity market enabled the JSE Ltd to provide approximately R60 million in rebates to equity market members in H1 2013.
Trade volumes increased by 58 percent in the period and value traded increased by 22 percent in the same period.
While the equity market remains the JSE’s biggest revenue generator, above-average H1 2013 revenue growth from most of the business units has contributed to the company’s H1 2013 revenue mix remaining in line with that of H1 2012.
Group operating expenditure was down 3 percent at R488 million (2012: R504 million).
The board did not declare an interim dividend in line with its previously stated preference for a single annual dividend based on a full year’s results.
The JSE’s dividend policy is to maintain dividend cover between 2.5x and 1.5x after-tax profits.
The board announces that Michael Jordaan, who retires as chief executive officer of First National Bank in December this year, will join the JSE Board as a non-executive director with effect from 1 January 2014.
Strategic and operating focus
“We are focused on growing all our business areas, none of which we regard as mature.
Nicky Newton-King, chief excutive officer of the Johannesburg Stock Exchange, says these results are significant, reflecting the impact of strong trade volumes as well as their investment in initiatives that grow the business.
“Most projects are designed to strengthen our delivery of products and services and introduce new lines of revenue,” says Newton-King.
In this period we have successfully implemented Phase I of our move to T+3. Phase 2 of the T+3 implementation will take place in H2 2014 with Phase 3 as soon as possible after that, she explains.
“We have also rolled out a new web-based portal through which JSE market data clients can report their monthly usage direct to the JSE.
“This reduces administration and complexity, enabling our sales teams to focus on building the market data client base and revenue.”
Newton-King says the JSE is commissioning an initial colocation data centre with space for 35 client racks at a capex cost of approximately R50 million, of which they expect to spend approximately R38 million this year and the remainder in 2014.
Colocation will introduce a new revenue line and increase speed of access to and liquidity across all our markets, she says.
“Subject to confirmation on costs and functional fit, we will also be migrating our equity derivatives market to the same trading engine as our equity market and to a new clearing engine.
“This move will both internationalise this market and increase speed liquidity on the market as well and this is planned for mid-2015.”
She says their work with National Treasury and industry participants to implement an electronic trading platform (ETP) for the South African Government bond market is gaining momentum.
“We are excited by the opportunities ahead of us as we continue to make good progress towards delivering our 2017 strategic objectives,” she adds.
