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
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