JSE full-year revenue increases 6.2%

The Johannesburg Stock Exchange (JSE) recently announced a hike in dividend amid double-digit profit growth for the full-year results. With headline earnings up by 12.2% and revenue increasing by 6.2%, the exchange showcased a resilient operating revenue profile. CNBC Africa spoke with Leila Fourie, CEO of the JSE, to delve into the factors driving this performance and the outlook for the market. Fourie highlighted that despite a 9.5% decrease in equity trading volumes, the JSE's diversified asset classes and business units helped boost revenues. The exchange saw growth in non-equity trading environments like the bond and commodities markets, along with increased revenue from information services and index base services. While challenges such as the impact of regulatory changes and liquidity vacuum persisted, Fourie commended management for effectively navigating controllable factors and growing non-trading revenue to mitigate trading fluctuations. Discussing the impact of central bank activities on the JSE's net finance income, Fourie mentioned countervailing factors in the interest rate environment. A potential easing of monetary policy could lower net finance income, but a risk-on appetite fueled by lower interest rates may drive trading activity in the equity market, balancing out revenue streams. Fourie also emphasized the interconnectedness of global interest rate movements, citing the potential for increased investment opportunities as emerging market investors shift funds from safe havens to markets like South Africa. Looking ahead, Fourie expressed cautious optimism regarding the listing pipeline for the JSE. She highlighted upcoming listings in the resources and mining sectors, including unbundlings and dual-listed counters. The CEO mentioned the collaboration for dual listings with the New York Stock Exchange, noting that market conditions and uncertainties like high interest rates and political landscapes impact listing decisions. Despite the challenging market environment, Fourie remained positive about the potential for new listings and the outlook for the JSE. In terms of market outlook, Fourie discussed the importance of local and global elements in shaping investor sentiment. With international investors adopting a 'wait and see' approach ahead of the South African elections, she anticipated potential inflows post-elections. Key factors for investor confidence included delivering on economic plans and addressing issues like unemployment and infrastructure development. Fourie underscored the need for South Africa to position itself as an attractive investment destination amidst global competition from other emerging markets. Lastly, Fourie addressed the issue of insider trading concerning Brait's technology, emphasizing the JSE's cooperation with the Financial Sector Conduct Authority (FSCA) in investigating such matters. She reiterated the seriousness with which the FSCA treats insider trading allegations and the exchange's commitment to providing necessary information for investigations. Despite challenges, the JSE remains focused on maintaining market integrity and fostering investor confidence. Overall, the JSE's robust performance and strategic initiatives position it well for future growth amid a dynamic and challenging market landscape.