JSE Posts Better Interim Results Performance
August 17, 2011
JOHANNESBURG, 16 AUGUST 2011. A 7% increase in revenue
combined with controlled operating costs led the JSE Limited, the company that
operates the local bourse, to report a 22% increase in net profit after tax to
R253.8 million (H1: R207.6 million). The Group declared a special dividend of
“All divisions of the JSE reported an increase in revenue in
the first half of 2011, with particularly strong performances from the cash
equities, commodity derivatives and currency derivatives markets. This revenue
growth, combined with lower operating expenses, indicates a better performance.
We also retained the focus on our major strategies,” says Russell Loubser, CEO
of the JSE.
The Group’s revenue for the period is derived from diverse
• Issuer services – Revenue in the JSE’s
Issuer Services division, which handles company and debt listings, increased 6%
to R48.8 million (H1 2010: R45.8m). “Though there is a listings pipeline,
potential issuers remain hesitant about the current economic environment. This
is in line with the experience of other World Federation of Exchanges members,”
says Loubser. During the first six months of 2011, five companies listed on the
exchange compared to six in the first half of 2010.
market – The number of trades climbed 5% and value traded increase 4%
in the first half of 2011. In total, equities revenue rose by 8% to R371.7
million (H1 2010: R344.5 million).
• Equity derivatives market – Equity derivative revenue rose
5% to R55.9 million (H1 2010: R53.3 million) as a 4% dip in the number of
contracts traded was countered by a 12% rise in value traded. “This year, the
equities derivatives team has worked hard to encourage trading of single stock
futures on the central order book, which we believe is key in unlocking larger
volumes and attracting international players,” says Loubser. The division also
saw strong growth in index derivatives and bespoke products traded
• Currency derivatives market – Currency derivatives revenue
climbed 44% to R7.2 million during the first half of 2011. This growth is
attributed to a change in the billing model to stimulate trade; an increase in
the range of instruments traded and the introduction of bespoke, on-market
products. Currency derivatives are a small but growing portion of group revenue.
• Commodity derivatives – Revenue grew by 15% to R23.6
million (H1 2010: R20.6) largely due to increased trade. “Local maize and wheat
contracts continue to make up most of the trade in this market, but the trade of
foreign-referenced instruments under licence from the CME Group continues to
rise,” says Loubser.
• Interest rate market - Strong
secondary trade figures resulted in a 16% revenue growth to R19 million (H1
2010: R16.4 million).
• Information product sales – Despite a contraction in data
sales to existing clients both locally and internationally, revenue grew 4% to
R61.1 million as the team continues to grow its base of international clients.
The JSE sets aside cash to
fund operations, guarantee central order book equities trades, maintain
infrastructure and meet capital needs for expansion. “Testing of the new
equities back office system is progressing well and the new system is set to be
implemented in 2012. As the capital expenditure for this project comes to an end
and the exchange has sufficient cash reserves for its current needs, the
Directors have declared a Special Dividend of 210 cents per share. The dividend
will be paid out on 12 September 2011,” says Loubser.
The JSE continues to focus on growing
all markets, diversifying revenue streams and implementing strategic goals. In
the first six months, the JSE has:
• Completed the integration of the
interest rate market trading platforms so that there is now a single platform
for the trading of interest rate products
• Delivered the first phase of the
remote disaster recovery site
• Made good progress in implementing the new
state-of-the-art data centre which is scheduled to be completed before year end.
“Market uncertainty and concerns regarding global sovereign debt have
cast a shadow on the first months of 2011. Yet, despite these conditions, we
have still managed to perform better than the first half of 2010. We will
continue to focus on growing all our markets, diversifying our revenue streams
as well as delivering value to issuers and investors through the strength of
regulation and quality of service,” concludes Loubser.
information, please visit www.jse.co.za
About JSE Limited
As South Africa’s
only full service securities exchange, the JSE connects buyers and sellers in
four different financial markets, namely equities, equity derivatives,
agricultural derivatives and interest rate instruments. The JSE Ltd offers the
investor a truly first world trading environment, with world class technology,
surveillance and settlement in an emerging market context. It is amongst the top
20 largest equities exchanges in terms of market capitalisation in the world.
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