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