Reality bites for the JSE

The JSE says it expects a big drop in earnings for the six months ending June 2019, citing the state of the current economy in South Africa.

The country’s largest trading bourse advised that it expects headline earnings per share (HEPS) to be between 490.95 cents and 425.49 cents – 25% and 35% lower than the 654.6 cents reported in 2018.

Earnings per share (EPS) is expected to be between 491.03 cents and 425.56 cents. This is between 25% and 35% lower than the 654.7 cents reported for the comparative period.

The JSE said that HEPS and EPS have been impacted by several factors, including:

  • A decline in the key activity drivers in the main asset classes traded on the JSE and, in particular, lower value traded in the equities market which has seen more than R28 billion net foreign sales and muted local investor activity during H1 2019. This has translated into lower revenues. This revenue performance has been exacerbated by the high base effect in H1 2018;
  • The impact of the new tiered billing model for equities trading, which reduced the cost of trading for our clients. This model was introduced in August 2018 and was applicable for H2 2018 but not in the comparative period;
  • The impact of the income tax credit of R31 million reported in H1 2018 which adds to the high base effect (as there was no tax credit in H1 2019);
  • Management actions to fill vacancies so as to reach planned headcount levels (compared to the low base headcount throughout H1 2018), in order to deliver on the JSE’s extensive strategic initiatives; and
  • Incremental technology and depreciation expenditures in the period following the implementation of the Integrated Trading and Clearing system.

“The JSE’s cash and capital remain healthy and position the JSE well to execute on its various strategic initiatives,” it said.

“Although it is disappointing to reflect these expected results, the JSE revenue performance largely reflects the reality of the difficult economic environment in South Africa which, in turn, impacts investor appetite.

“This notwithstanding, we are committed to resourcing our business and making the investments we need to ensure the long-term sustainability of the JSE as a critical component of the South African economic ecosystem,” the group said.

The JSE said it expects to publish its results on 30 July 2019.


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Reality bites for the JSE