JSE benefits from increased activity

The JSE enjoyed the tailwinds of increased market activity during the first half of 2018 that, together with strong cost containment, allowed the bourse to deliver impressive earnings growth for the period. Headline earnings per share rose by 34% to R6.54.

JSE Ltd enjoyed the tailwinds of increased market activity during the first half of 2018, which together with strong cost containment allowed it to deliver impressive earnings growth for the period.

Headline earnings per share rose by 34% to R6.54 for the six months to the end of June.

Top line growth was less impressive, with revenue advancing 7% to R1.2bn.

Most of the exchange’s capital markets activity saw increases in revenue, most notably the cash equities market, which saw revenue rise by 12%.

“They are strong results, reflecting a strong first quarter and a more benign second quarter,” said Nicky NewtonKing, CEO of the JSE.

While she was happy with the results, cost control would remain a focus.

Expenses over the period were 5% lower owing largely to a reduction in headcount that has seen staff numbers at the end of the period fall by 92 to 362 when compared with a year ago. This was largely due to a retrenchment programme that began in 2017.

A reduction in technology costs was made possible through cost-optimisation initiatives. “We reviewed costs throughout the IT supply chain, and we were able to renegotiate some of our contracts, which contributed to the decline,” said Newton-King.

The JSE has plenty of money to meet its regulatory obligations as well as to continue funding its capital investment with cash of R2.4bn.

This includes completing the integrated trading and clearing project, which should provide clients with “robust” trading and clearing technology in equity derivatives and currency markets as well as providing improved risk management functionality.