Nicky New­ton-King: ‘In­vestors see a lot of op­por­tu­nity in SA’

Finweek English Edition - - SPOTLIGHT - BY JANA MARAIS

For the past five years, the JSE has ranked as the top reg­u­lated ex­change in the world. Its rules and reg­u­la­tions, com­bined with its cut­ting-edge tech­nol­ogy, has also con­trib­uted to the coun­try’s rank­ing in the top f ive glob­ally for the abil­ity to raise fi­nance through the lo­cal eq­uity mar­ket, the ef­fec­tive­ness of cor­po­rate boards, and pro­tect­ing t he r i ghts of mi­norit y share­hold­ers, ac­cord­ing to the World Eco­nomic Fo­rum.

Nicky New­ton-King, who has served on the JSE’s ex­ec­u­tive com­mit­tee since 1997 and took over as CEO in Jan­uary 2012, has over­seen a num­ber of records dur­ing her time at the helm: a record num­ber of list­ings since 2007 (24 in 2014), record num­ber of trades ex­e­cuted in a day (359 969, with a value of just over R24.6bn), eq­uity cap­i­tal raised of R153.4bn, and in­vestors would hope soon also the long­est bull run in JSE his­tory.

She spoke to Finweek about in­vestor sen­ti­ment, keep­ing the JSE at­tuned to global de­vel­op­ments, and op­por­tu­ni­ties on the rest of the con­ti­nent. WHAT IN­DI­CA­TIONS ARE YOU GET­TING ABOUT IN­VESTOR SEN­TI­MENT IN THE COUN­TRY? I would say there are clearly chal­lenges and we, as a coun­try, need to face up to them hon­estly and ad­dress them. In par­tic­u­lar, we need to tackle the is­sues of ser­vice de­liv­ery and the gulf be­tween the haves and the have-nots. But at the same time, when we com­pare our­selves, and the op­por­tu­ni­ties that are present in this coun­try, we must com­pare our­selves to places like Brazil and Rus­sia.

When in­vestors do that with a broader land­scape than we do, they see a lot of op­por­tu­nity. Not op­por­tu­nity with­out chal­lenge, but what we need to do as South Africans, is to look at those op­por­tu­ni­ties and tackle the chal­lenges hon­estly. DO YOU THINK BUSI­NESS IS DO­ING ENOUGH TO AD­DRESS TH­ESE CHAL­LENGES? We at the JSE have ex­tremely frank con­ver­sa­tions with all the pol­i­cy­mak­ers and reg­u­la­tors when that is nec­es­sary. We have a ro­bust en­gage­ment as is ap­pro­pri­ate if you are try­ing to tackle the big is­sues of the day. I think though that there is a long way to go in build­ing trust at the re­quired depth be­tween busi­ness and gov­ern­ment.

That said, there is much will­ing­ness on both sides to build that level of trust. As busi­ness we need to be there to help; that doesn’t mean that one is un­crit­i­cal about the things that need to change. It means one is re­al­is­tic about the chal­lenges and that one ad­dresses them re­spect­fully, but fully with the peo­ple that count. There’s a way to go but it’s start­ing. I can cer­tainly see doors be­ing more open than they have per­haps been be­fore. HOW DO YOU DEAL WITH LOAD-SHED­DING? For years we have had ex­tremely deep con­tin­gency plans on en­ergy; in fact en­ergy is a sig­nif­i­cant con­straint to our busi­ness. As an ex­am­ple, when we launched our co-lo­ca­tion en­vi­ron­ment, which is a big data cen­tre in the JSE build­ing in which our clients can put their trad­ing ap­pli­ca­tions, we had to limit how many we could make avail­able to peo­ple be­cause there is just not enough power com­ing into the area.

But we have backup; this is a sig­nif­i­cant in­vest­ment and we’ve had that for years. We see the JSE as an im­por­tant part of the touch­stone of peo­ple’s con­fi­dence in the coun­try. So we feel strongly that we need to do what­ever we can to be up and avail­able when­ever peo­ple need to trade. TO WHAT EX­TENT WILL YOUR IN­VEST­MENTS IN IT IN­FRA­STRUC­TURE CON­TINUE? You’re never go­ing to stop; the bleed­ing edge of trad­ing tech­nol­ogy con­tin­ues to de­velop at speed. The point of in­vest­ing in tech­nol­ogy is to in­vest wisely and in the right se­quence. We’ve in­vested a lot in eq­ui­ties, which is where the cut­ting edge of trad­ing tech­nol­ogy has been, but the cut­ting edge of prod­uct de­sign to­day is in the de­riv­a­tives and bond mar­kets and in risk man­age­ment. So we’re busy in­vest­ing in those tech­nolo­gies now. That’s go­ing to be a story of ev­ery ex­change that wants to be part of the global cap­i­tal flows.

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