Her comments came after a tumultuous trading week in which jitters over Greece and a sell-off in general mining shares dragged down the all-share index.
“The world is moving and we have to move with it,” said Newton-King. “I think there are a number of forces of which we are very cognisant and which influence how we are strategically repositioning the JSE today.”
Political uncertainty, the current crisis of capitalism, social unrest and inequality, and technological advancements notwithstanding, Newton-King was pragmatic about the task ahead, reflecting on the significant changes she’d seen unfold in her 16 years at the JSE. Looking to the future, she said the importance of leveraging off the JSE’s place in Africa and as part of the broader BRICS and emerging market economies, presented a unique opportunity.
While stressing the JSE’s positioning as the 20th largest exchange in the world – and its acknowledgement, for the second year running, as the best regulated financial market in the world – Newton-King put the global situation into context by highlighting that the New York Stock Exchange (NYSE) is 18 times larger than the JSE and the London Stock Exchange (LSE) is about six times the size of the local bourse. With about 400 listed companies on the JSE, compared with the Bombay Stock Exchange’s 5 000-odd companies, Africa’s largest exchange is, by global standards, still relatively small.
That said, it still costs about R700 million to run the JSE each year, just to keep a foothold in this highly-competitive global market. With this in mind, said Newton-King, where does that position the rest of Africa, where of the continent’s 24 exchanges only four (the JSE, Mauritius, Egypt and Casablanca) are members of the World Federation of Exchanges?
We need to find a way to partner each other, said Newton-King. “International investors want to invest in size. The average day’s trade on the JSE is more than the annual trade on Kenya and Mauritius taken together. So for an investor of any size to want to do a transaction of any size, they simply can’t do it in their home market.”
There are incredibly successful companies on the continent and a global hunger for emerging market products, stressed Newton-King. So tapping into this currently unserviced market represented a huge opportunity both for South Africa and the continent as a whole. “This is the space in which we think we have a role to play… Our strategy is to become the place of preference for the trading of African securities,” she said.
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