JSE just misses out

The improved sentiment following the formation of the Government of National Unity (GNU) was too late to improve the Johannesburg Stock Exchange’s (JSE) latest financial results.

The formation of the GNU led to a massive boost in confidence in South African assets, with local investors betting big on equities. International investors are still waiting for the new government to deliver before rushing in.

However, the formation of the GNU only happened at the end of June, when the JSE’s reporting period ended.

“After a slow start to 2024, value traded in our equity market started to recover in the second quarter with the trend extending into July,” said JSE CEO Leila Fourie in the group’s interim results for the first six months of 2024 (H1 2024)

“Higher trading activity has been reflective of positive market sentiment stemming from the outcome of the National Elections and the formation of the Government of National Unity (GNU).”

Over the six-month period, the group declared a Net Profit After Tax of R493 million, which translated into headline earnings per share of 606 cents—a decline of 0.2% from H1 2023.

The group is still cash generative, with net cash generated from operations of R502.6 million (2023: R487.9 million), up 3%. 

The group said these results had been achieved despite a challenging macro-economic, political and trading environment, characterised by elevated inflation, 15-year high interest rates and widespread political uncertainty in the 29 May election.

The JSE’s 4.2% growth in operating income was due to diversified revenue streams.

The strong performance of the JSE’s diversified business segments and asset classes, whose year-on-year growth offset the 12% decline in equity value traded (the JSE’s most significant market).

JSE Investor Services (JIS) revenue grew by 28.9%, commodity derivatives revenue by 24.7%, and revenue from bonds and interest rate trading by 7.8%.

“These results reflect our segment and asset class diversification as well as strategic progress in growing non-trading income, which now represents 39% of total operating income,” said Fourie

“We are pleased with our progress as we continue to improve our performance over time through structural innovation and collaboration. The JSE continues to pursue innovation with an emphasis on data, sustainability and advances in technology.”

Over the period, the group increased its list of sustainability products, with eight new sustainability bonds listed, bringing the total to 76, and 100% growth in the number of Actively Managed Exchange Traded Funds.

The exchange is also on track to complete its core market data-to-the-cloud transition by the end of the year.

The JSE has also expanded its analytics-as-a-service capabilities to global exchanges and delivered Colo 2.0 – a cloud-based colocation service that offers brokers lower trading latency.

“We remain on track to deliver on our Group’s strategy to position the JSE as a diversified and sustainable exchange through next-generation technology, expanding our range of products and services, entering new markets, providing fair and transparent regulation, and strengthening our operational capabilities.”

The group’s financial results can be found below:

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