JSE’s diversification strategy bolsters financial resilience and competitive position
 

Johannesburg, 18 March 2024: The Johannesburg Stock Exchange (JSE) delivered a strong revenue performance in 2023, in difficult market conditions.

Headline earnings per share (HEPS) increased by 12,2% year-on-year (YoY) to 1029.8 cents per share from 917.7 cents in 2022, while net profit after tax (NPAT) increased 11% to R831 million in the same period (2022: R749 million). These results demonstrate the JSE's robust operational performance and ability to innovate in response to market changes to deliver value to its stakeholders.

Return on equity rose by 19.4% up from 17.8% and in line with the organisation's long-term financial targets.

"The JSE has delivered a strong set of results by focusing on our strategy to diversify revenue streams while delivering a competitive proposition to the market. Despite global uncertainty and shifting asset allocations by domestic and international investors, we innovated to ensure we continue to offer a compelling set of trading and non-trading services that supported our revenue growth,” said JSE Group CEO Leila Fourie.

“The JSE delivered an excellent operational performance, with near 100% uptime despite several substantial market moving events. We continue to offer the market an unparalleled trading environment with robust investor protections and excellent risk management while consistently investing to provide world-class trading capabilities and products,” said Fourie.

Healthy cash flow from operations, which increased 13.6% to R1.1 billion YoY, enabled the JSE's Board to declare an ordinary dividend of 784 cents per share for 2023.

This impressive performance can be attributed to a strategic emphasis on continually diversifying business segments and asset classes across the JSE – which, this year, offset lower trading activity. Non-trading revenue now constitutes 36,8% (R954 million) of the JSE’s total operating revenue, up from 29% in 2019. This shift is underscored by significant growth in specific segments, with a 15.6% revenue increase in Information Services and a notable 20.2% growth in revenue from JSE Investor Services (JIS).

“We made strong progress with our strategic and operational priorities in 2023, making several enhancements to our service offerings and trading environment. We launched new partnerships to enable us to rapidly innovate in data services, private markets and carbon trading, which will ensure the JSE maintains its leading position among emerging market exchange operators,” continued Fourie.

Several innovations were introduced. JSE Clear enabled the use of new kinds of securities collateral for derivatives, blending ZAR cash with South African government bonds to meet initial margin requirements. This significant step alleviates liquidity pressures amid rising global and sovereign risks and is a first for the South African market.

Complementing this, the Securities Trading Technologies (STT) platform received an early and under-budget upgrade, all crucial equity and bond data was transferred to a cloud-based data lake, and cloud-based colocation services were introduced to markedly reduce data centre costs for participants. The JSE also launched big xyt ecosystems, introducing cutting-edge analytics-as-a-service to global exchanges.

There was also substantial growth in the JSE’s sustainability portfolio, with a 17% increase in sustainability bonds and a 91% increase in actively managed certificates (AMCs), adding 12 new bonds and 23 AMCs in a single year. The JSE continued on its journey of creating an enabling listing environment and delivered on enhanced listing requirements which have substantially simplified the requirements for listed companies. The bourse also launched a South African Voluntary Carbon Market (VCM) and Renewable Energy Certificates (RECs) market to improve transparency and liquidity.

The JSE's Private Placement Platform (JPP) onboarded 41 live deals by the end of 2023, mobilising R20 billion in investor capital, and reflecting the platform's growing significance in capital raising.

Revenue performance per segment:

Capital Markets

• Primary Market: +2.4% to R161 million.
• Equity Trading: -4.6% to R486 million. While value traded was down by 9.5%, equity trading revenue was boosted by colocation revenue, up 30% to R43 million.
• Equity Derivatives Trading: +2.2% to R117 million.
• Currency Derivatives Trading: +26.5% to R37 million.
• Bond and Interest Rate Trading: Revenue +12.8% to R92 million.
• Commodity Derivatives Trading: +10.7% to R80 million.

JSE Investor Services (JIS)

• JIS: +20.2% to R190 million.

Post-Trade Services

• Clearing and Settlement revenue: -6.0% to R411 million.
• Back-office services (BDA) revenue: +4.8% to R368 million.
• Funds under management revenue: +8.9% to R104 million.

JSE Clear

• JSE Clear: +15.5% to R112 million.

Information Services

• JIS: +15.6% to R448 million.

"In 2024, our aim is to continue to grow and diversify our revenue streams, bolster operational resilience, and embed sustainability deeper into our operations. We will deliver innovations in our core business, including a major modernisation and redevelopment of our broker-dealer accounting (BDA) system and further develop our Information Services offering, all while managing our cost base,” concluded Fourie.

ENDS

ABOUT THE JSE

The Johannesburg Stock Exchange (JSE) has a well-established history of 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 on 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 135 years. As a leading global exchange, the JSE co-creates unlocks value & makes real connections happen. www.jse.co.za 

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