JSE works on market for micro businesses

The JSE planned to launch a sub-AltX retail market to help small entrepreneurs, such as spaza shops, raise capital and to attract more retail investors, said CEO Nicky Newton-King.

The new market, Umnotho, had been in development for three years and was partly a response to Gauteng Premier David Makhura’s challenge to mobilise finance for township entrepreneurs, she said.

Umnotho would help entrepreneurs with investor-relations documentation, she said. “We’ve completely rethought the way we ask people to build their own documentation for listing.”

Newton-King was speaking on the release of the JSE’s financial results for the year to endDecember 2016.

Less buoyant market activity than the previous year led to a decrease in profit from operating activities of 4.9%, while aftertax earnings rose just 2% (to R920m).

Operating revenue grew 10% to R2.3bn.

“Costs grew slightly faster than revenue, which was a consequence of technology investments,” she said.

The JSE spent R283m on technology costs, a 20% increase from a year earlier. There were 18 new stock market listings in 2016, and two additions, both exchange-traded funds, so far in 2017.

Premier Foods will list on Thursday, while asset manager BlackRock is looking to list its European fund. The JSE was also in talks with an “African listing”, Newton-King said.

“Stressed economic conditions will mean issuers think carefully before listing.”

Priorities for 2017 included replacing the derivatives trading engine and listing government bond exchange-traded funds.

As trading fees fell, strategic focus would be on posttrade services and monetising information services, she said.