READY FOR ALL COM­ERS — BUT WHERE ARE THEY?

Amid a listings boom, volatile mar­kets and the im­mi­nent dis­ap­pear­ance of the ven­er­a­ble SAB code from its tick­ers, the JSE has found it­self the tar­get in the EFF’s anti-white-cap­i­tal cru­sade, writes Gi­uli­etta Talevi

Financial Mail - Investors Monthly - - Opening Bell - Nicky New­ton-King CEO of the Johannesburg Stock Ex­change

QWhen

Julius Malema’s EFF marched to the JSE, you said you’d be happy to en­gage with them. How can you do this when they seem to have a de­ter­minedly ide­o­log­i­cal stand­point? A I think the first thing to con­sider is that whether it’s the EFF or the stu­dents’ protest, all th­ese demon­stra­tions are in fact high­light­ing in­creas­ing im­pa­tience with the progress we’ve made since democ­racy.

We have in­vited the lead­er­ship of the EFF to en­gage with us so that we can bet­ter understand their expectations and share our per­spec­tives on what is doable. I’m hop­ing we can have that meet­ing in short or­der but that will be up to them. Se­condly, we have cir­cu­lated the memo to the listed com­pa­nies and our mem­ber firms be­cause it raises the broader so­cioe­co­nomic is­sues and the im­pa­tience. It’s im­por­tant that we make this mo­ment count. And it’s not just an EFF thing. QAre

you dis­ap­pointed that there aren’t more black-owned com­pa­nies that have used the JSE as the means to raise cap­i­tal? A I don’t know if that is a fact. The JSE as a cap­i­tal mar­ket is about 23% owned by blacks and 22% owned by whites [the rest be­ing for­eign own­er­ship] and it’s there­fore quite di­verse. We’re at­tract­ing listings from all sorts of play­ers and the more we can at­tract the more it en­ables the dis­tri­bu­tion of own­er­ship. QWhat

about making share own­er­ship a house­hold fea­ture in SA? It seems to have been a JSE wish for many years, but has it grown as you would have liked, es­pe­cially bench­marked against coun­tries like Aus­tralia? A We haven’t made that much progress in direct share own­er­ship. But we have a rel­a­tively low sav­ings rate; most sav­ings are con­trac­tual sav­ings through peo­ple’s pen­sion funds and that’s the rea­son why, when you look at the own­er­ship of com­pa­nies on the JSE, you need to take into ac­count pen­sion fund own­er­ship — be­cause that's how peo­ple in this coun­try save.

In Aus­tralia they have a com­pletely dif­fer­ent struc­ture for na­tional sav­ings; they have su­per-an­nu­a­tion funds that in­di­vid­u­als con­trol them­selves, a bit like in the US. And they have tax in­cen­tives to do that.

So there is a lot of work still to do in that re­gard. QVery

few African com­pa­nies have listed on the ex­change, de­spite a big push by the JSE to cre­ate an Africa board. Why? A We spent an enor­mous amount of time talk­ing to our col­leagues on the con­ti­nent, to po­ten­tially listed com­pa­nies. I think there are a couple of things to con­sider here: first, it takes time for com­pa­nies to move from be­ing in­ter­ested in listing to ac­tu­ally get­ting to be listed. Se­condly, we have in fact had quite suc­cess­ful African listings — Chop­pies ear­lier this year, and in­ter­est­ingly enough TrustCo, which listed five years ago, came sec­ond in the Sun­day Times Top 100 com­pany awards . . . but we haven’t yet at­tracted the enor­mous African brands that we be­lieve would do very well on the JSE. And yes, I am dis­ap­pointed that we haven’t yet achieved that. QSo

what has been the hold-up? A Some of them have their own busi­ness is­sues . . . it took us six years to get Chop­pies. Peo­ple have their own busi­ness cy­cles and their own busi­ness is­sues they’re try­ing to re­solve and we are com­pet­ing with the likes of Lon­don. But if you were to look at the JSE on its mer­its . . . we are ex­tremely com­pet­i­tive. QThe

JSE seems to have three com­peti­tors about to launch. Are you steel­ing your­selves for new ri­vals? A The launch of an­other ex­change is al­ways a pos­si­bil­ity. The re­al­ity is that in all our prod­uct lines, we al­ready have com­pe­ti­tion — but not in bricks-and-mor­tar un­der a li­cence. So we al­ready feel that there is quite a sig­nif­i­cant com­peti­tor space around us. But that said, we’re not wait­ing for any­body to open up next door and cherry-pick our lunch. We’re ready for com­pe­ti­tion: we understand where our com­pet­i­tive strengths are, we understand our op­por­tu­ni­ties to strengthen, with more ur­gency, ar­eas where we’ve al­ways wanted to re­spond but per­haps had to pri­ori­tise other things. QWhich

things have you had to fo­cus on, ahead of oth­ers? A We’re mov­ing our set­tle­ment pe­riod to T+5 to T+3. That’s

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