JSE’s diversification strategy bear fruit
Africa’s largest stock exchange raised its ordinary dividend by 5.8 per cent in the year to December resulting in total distribution to shareholders of R715 million. The Johannesburg Stock Exchange said revenues across most its asset classes grew in the period helped by the positive market sentiment since the formation of the government of national unity in south Africa. Leila Fourie, CEO, Johannesburg Stock Exchange joins CNBC Africa for more.
Mon, 03 Mar 2025 15:59:08 GMT
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AI Generated Summary
- The JSE reported a 5.8 per cent increase in its ordinary dividend in the year to December, attributing the growth to positive market sentiment following the formation of the government of national unity in South Africa.
- The exchange has defied market expectations and outperformed global indices, with JSE indices showing an upward trend and average daily value traded surging by 45 per cent year to date.
- The JSE's diversification strategy, focusing on non-trading revenue and innovation, has proven successful, contributing around 38% to operating income and showcasing resilience across economic cycles.
The Johannesburg Stock Exchange (JSE) has reported a positive financial performance with a 5.8 per cent increase in its ordinary dividend in the year to December, resulting in a total distribution to shareholders of R715 million. Leila Fourie, the CEO of JSE, credits the growth to the positive market sentiment post the formation of the government of national unity in South Africa. Despite concerns over cracks in the GNU exemplified by the postponement of the budget in February, the JSE has defied expectations and fared well compared to global markets. As of the latest data, the JSE indices have been showing an upward trend, outperforming major global indices like Nasdaq and S&P. The average daily value traded in the JSE has surged by 45 per cent year to date, signifying increased market activity. Additionally, the bond market in JSE has shown positive growth by 24.5 billion Rand year to date, indicating investor confidence. Leila Fourie highlighted the importance of balancing quality non-trading revenue with innovation to modernize the exchange's tech infrastructure. The JSE's diversification strategy has proven successful, with non-trading revenue contributing around 38% to operating income, showcasing resilience across economic cycles. The exchange aims to continue growing its non-trading revenue and maintain a strong balance sheet. Leila Fourie mentioned ongoing efforts to enhance connectivity with international markets and improve technological capabilities through partnerships like AWS. Regarding listings, the JSE has revamped its requirements to attract more companies to the market, leading to positive responses from the corporate sector. The introduction of a new general segment has tailored listings requirements for smaller cap companies, resulting in 22 companies taking up the offering. Leila mentioned that listings are strongly influenced by the macroeconomic environment, emphasizing the need for economic growth and business confidence to drive listings. Despite challenges, the JSE saw eight successful listings last year and has a promising pipeline for the upcoming year, particularly in the sustainability segment. Sustainability bonds in the market grew by 133%, with 91 sustainable bonds now available. Leila expressed cautious optimism about future listings given the prevailing macroeconomic conditions. Overall, the JSE's performance reflects a resilient and diversified approach that has positioned the exchange for continued growth amidst market uncertainties.
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