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JSE profits increase, despite Covid challenges

Total revenue increased by 22%.
The JSE is seeing a demand for green bonds in emerging markets. Image: Moneyweb

The Johannesburg Stock Exchange (JSE) reported a positive six months for the first half of its financial year – despite the macro-economic challenges caused by the global Covid-19 pandemic.

The owner and operator of Africa’s biggest and most liquid market for shares, bonds and derivatives, reported a 22% increase in net profit after tax to R485 million, while total revenue increased 22% to R1.32 billion.

JSE group CEO Leila Fourie said she’s pleased with the results, which were achieved amid a turbulent and volatile market, with record trading volumes amplified by the sovereign credit rating downgrade, South Africa’s exit from the World Government Bond Index, and rand volatility.

The JSE recognises the substantial impact of the pandemic on its clients. “We feel that it shows that we understand the dynamics of the crises that we geared for change. We do recognise a challenging backdrop in the macro economy. We think that it shows that the JSE is resilient and it generated quality earnings and showed that we maintained a strong cash generative position and that is obviously vital for investors in the current market,” Fourie said.

Its group earnings before interest and tax (EBIT) increased by 26% to R523 million, while earnings per share (EPS) rose by 22% to 569.1 and total headline earnings per share (HEPS) rose by 22% to 569 cents.

She explains that this is despite 14 delistings in 2019, because May and June were marked by an increase in activity in corporate actions.

“In a global market, we have seen a contraction in a number of companies that are listing for initial public offering (IPOs). We have seen an uptake in bond markets and much more capital raising there and also in structured products.

“We have had 19 companies issuing right issues since the crisis, as companies are either looking to buffer their balance sheets or to expand their markets at the back of [the] acquisition trail, that they are looking to invest in other companies,” Fourie said.

She also has noticed an increase in capital raised in the secondary market.

Fourie added that on the sustainability front, the JSE has seen a growing demand for green bonds in emerging markets, driven by private borrowers looking for investments in sustainable energy, cleaner water, transport and smart buildings.

Read: JSE profits plummet, expenditure increases

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The JSE has a conflicted business model. It’s part of the problem.

The JSE is the best stock exchange in the world. And Leila is one of the best CEOs in the country. You and your consistent sense of negativity are the problem. The world is made better with people who want to make it better and help others to become better. You sometimes make life sad because you criticize condemn and complaint. The complete opposite of Dale Carnegie.

You sound like a deployed cadre that is hired to applause the likes of Ace Magashule, when he is tasked to tell the SA public that the ANC deals with corruption and procurement properly. Like sending a pedophile to a kindergarten to teach kids about child molestation.

Tell your false positive story to the shareholders of the likes of Tongaat Hulett Ltd., EOH Holdings Ltd. or Steinhoff International Holdings Ltd.’s when the JSE clearly did not police their governance in the conduct of applicant issuers’ affairs and in the market as a whole.

No amount of Carnegie ra ra can overcome that. The better way to be part of the solution is to tell the truth about the situation so that we can course correct.

I’m sure Dale would agree.

This shows you how resilient and dynamic South Africans are! We need to make sure that South Africans keep reinvesting in our own economy and not dud economies like the UK and Oz. We must invest in ourselves and make sure we prosper first before anybody else! We are Brilliant. Dynamic and Resilient!

End of comments.

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