Johannesburg, 11 May 2020: The Johannesburg Stock Exchange (JSE) has announced that it will provide relief measures to market participants to counter the impact of the Covid-19 pandemic on their businesses and to ensure business continuity.
The relief measures will be offered to businesses that are affected by the pandemic and in financial distress. The JSE will grant distressed companies extended payment terms of between three and six months, with no interest charged. The JSE will engage with companies and review requests on a case-by-case basis.
"The JSE is extending a helping hand to our valued clients and suppliers that are affected by the pandemic. We value our relationships with our market partners and we will endeavour to play our part in making sure they remain sustainable" says JSE Group CEO Leila Fourie.
Another stark reality has been the harsh impact that Covid-19 and the lockdown is having on small business. "The JSE recognises the strained situation facing small business and is taking further steps to encourage investors to support and encourage trading in small, mid cap and BEE companies listed on the exchange" says Fourie. The JSE today announced a 50% fee reduction for trading, clearing, and settlement in all companies listed on the JSE AltX and BEE Board for the remainder of 2020. "This measure is offered to help stimulate continued trading and liquidity in our AltX and BEE listed companies."
Fourie says "The depth and liquidity of capital markets ensures that the financial sector can support the real economy during times of crisis. The exchange plays an essential role in enabling price transparency, trading out of positions and providing access to capital. The JSE is reducing listing fees by 25% for those small cap and AltX companies looking to tap the market to raise secondary capital."
"The small cap counters are among the most vulnerable in strained markets. The discounts we are announcing for these market segments are aimed at stimulating liquidity and supporting this vital growth node of our economy," Fourie explained.
Valdene Reddy, Director of Capital Markets at the JSE said, "In order to ensure that the impact of Covid-19 is minimised, the JSE will continue paying its small and medium suppliers and service provider's monthly retainers for contracted suppliers. Non-contracted small and medium suppliers will be paid the average amounts those suppliers were billing the JSE prior to the national lockdown."
The JSE will also be increasing the amount of cash disbursements given back to small and medium stockbrokers that are on the JSE's Enterprise Development Programme. The cash disbursements in quarterly trading and connectivity fees will increase from 33% to 50% of the traded value by these stockbrokers. This temporary relief is applicable for the second quarter of 2020. The enterprise development programme was introduced by the JSE in 2016 to increase black participation in the exchange's value chain and ecosystem.
"These brokers are 51% black-owned and we believe that this temporary relief will insulate them from the negative impact of Covid-19. The Black Stock Broker Programme is a key part of our transformation strategy and with this targeted relief, we are ensuring that black representation within the financial markets is sustained," says Reddy.
ABOUT THE JSE
The Johannesburg Stock Exchange (JSE) has a well-established history operating as a marketplace for trading financial products. It is a pioneering, globally connected exchange group that enables inclusive economic growth through trusted, world class, socially responsible products and services for the investor of the future. It offers secure and efficient primary and secondary capital markets across a diverse range of securities, spanning equities, derivatives and debt markets. It prides itself as being the market of choice for local and international investors looking to gain exposure to leading capital markets on the African continent. The JSE is currently ranked in the Top 20 largest stock exchanges in the world by market capitalisation, and is the largest stock exchange in Africa, having been in operation for 130 years.
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