JSE lifts capex for tech plans

JSE Ltd, which operates the Johannesburg Stock Exchange, on Tuesday (12 March), reported a marginal (1.1%) increase in revenue for the year ended December 2012 to R1.38 billion.

The group said it invested in a number of new technologies to improve its services, while additional investments remain under consideration by management.

Such potential investments, it said, would mean capex spend in 2013 projected at about R200 million.

Profit from operating activities was R405.57 million, from R380.07 million, while diluted earnings per share declined to 349.5 cents from 396.1cents in 2011.

The group’s board maintained a dividend of R2.50.

The JSE said that it made significant progress in achieving its long-term strategic objectives and providing a solid foundation for the year ahead.

The group said it implemented the new MillenniumIT trading system and replacement SENS solution for the equity market successfully, on time and within budget, while it also upgraded the commodities and derivatives market technology to handle increased volumes.

The group said that the net cash invested in the business (inclusive of financing activities) of R85.3 million, included the purchase of computer hardware for the MillenniumIT equity trading engine and computer software.

“Ongoing investment in the business remains crucial – looking forward into 2013, our capital expenditure programme for business as usual activities amounts to about R45 million. A series of other strategic and technology investments remain under consideration by executive management and the Board,” the JSE said.

“The capex spend in 2013 for all these other potential investments is projected at about R200 million,” it said.

The group also welcomed the appointment of Aarti Takoordeen as new chief financial officer, following the resignation of Freda Evans from that post in September 2012.

The JSE noted that the number of new company listings on the JSE declined to 12, from 16 in 2011.

Information Technology

The JSE said its drive to upgrade and replace its trading systems and back-office technology, over the past decade, has been accompanied by trade volume growth and is a factor in the Exchanges global recognition as a strong market operator and regulator.

“The Exchange continues this drive in a bid to serve clients and maintain growth. With this in view, the JSE upgraded the commodities and derivatives market technology to handle the increased volumes and is planning to replace the Equity Derivatives trading engine completely in 2014,” it said.

The MillenniumIT trading system offers world-class trading technology, which along with its relocation to the JSE in Johannesburg, from London, “significantly reduces latency and transaction execution times”.

“This also reduces reliance on international links, which enhances the systems operational stability,” the group said.

The JSE said it will retain the BDA (broker dealer accounting) system until at least December 2015 while evolving the Equity Market Business Model. 

“Should any change to the Equity Market Business Model be decided on (which is by no means certain), that change will require extensive consultation with a wide and large number of stakeholders,” it said.

The group also noted that the market will need time to develop any new systems or processes to accommodate any new model.

Looking ahead, the JSE said it also intends to offer co-location services in its existing primary data centre, “but will do so only if sufficient client demand exists to cover the cost of providing such services”.

“Technology is vital and we will continue to focus on it as we facilitate interaction with our clients across the value chain and enhance their access to us,” it said.

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JSE lifts capex for tech plans