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Wednesday, August 10, 2022

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JSE generates strong revenue growth from market volatility

The largest bourse on the continent, which has faced criticism from the market of late for the growing number of de-listings and high cost of being listed, lifted headline earnings per share by 29 percent to 542.7 cents in the six months to June 30.

The largest bourse on the continent, which has faced criticism from the market of late for the growing number of de-listings and high cost of being listed, lifted headline earnings per share by 29 percent to 542.7 cents in the six months to June 30.

Published Aug 3, 2022

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The JSE delivered a strong first half performance driven by global market volatility, a business model that diversifies earnings through new business lines and revenue growth, chief executive Dr Leila Fourie said yesterday.

The largest bourse on the continent, which has faced criticism from the market of late for the growing number of de-listings and high cost of being listed, lifted headline earnings per share by 29 percent to 542.7 cents in the six months to June 30, after total revenue increased 11 percent to R1.38 billion.

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“Throughout this period, uncertainty in the markets manifested in volatility and higher trade activity. The depth of the JSE’s operational capabilities has ensured resilience during this volatile period,” Fourie said at the release of the interim results yesterday.

She said initiatives “to protect and grow core business” in the period included the introduction of Transition and Sustainability Linked Bonds, the launch of Actively Managed Certificates, listing requirements reform, and the maintenance of a 99.7 percent market share of the local equity market in terms of value traded.

JSE Private Placements was launched with 11 issuances year-to-date and R10bn in investor capital on-boarded.

Other initiatives included the launch of JSE Trade Explorer to provide equity market trade analytics.

JSE Investor Services’ market share grew from 20 percent at acquisition to 27 percent by the end of the interim period.

Additionally the Sustainability and Climate Change Disclosure Guidance was recently published.

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On the financial results, she said they were also pleased with the contribution of annuity revenue from business uncorrelated to trading activity, and cost management.

“These steady improvements create positive momentum and together underpin the quality of earnings,” she said.

Operating revenue grew 10 percent to R1.36bn, reflecting the impact of global macro-economic events on markets as well as 15 percent revenue growth in information services. JSE Investor Services lifted revenue 46 percent.

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There had been strong revenue growth across all segments, Fourie said.

The focus for the second half would be to invest in core business to sustain operations while progressing the growth strategy for information services, formulated on a five-year horizon.

The long-term strategy was to grow and diversify revenue streams, invest in operational robustness and entrench sustainability in the business.

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“Our role as a market infrastructure is to balance the needs of our diverse range of stakeholders, and to ensure the investments we make today position the group for a sustainable and prosperous future,” she said.

During the first half capital expenditure of R51m was focused on operational resilience initiatives. The group was highly cash-generative, sitting with net cash from operations of R534m (2021: R472m) at the end of the period, from taxed profit of R447m (R348m).

Rising interest rates and growth in margin deposits supported higher net finance income, which increased 30 percent year-on-year to R89m.

Operating expenditure was up 3 percent to R880m. While some costs were subject to timing differences, operating expenditures had been well contained, she said.

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