The Johannesburg Stock Exchange (JSE) said yesterday that despite an uncertain environment, as its largest market experienced lower trading activity amid continued macroeconomic volatility, it posted a 10% rise in interim profit.
In its unreviewed interim results for the six months ended June 30, 2023, the bourse said group profit increased by 10.4% year on year to R492.8 million.
Headline earnings per share increased by 11.9% to 607.2c. However, earnings before interest, tax, depreciation, and amortisation were down 3.7% to R604m.
Total revenue was up 5% to R1.45 billion, supported by double-digit growth in Information Services and JSE Investor Services (JIS) revenue.
“We also saw an uptick in trading activity across our derivative markets. The JSE increased the proportion of its revenue derived from non-trading activity by 2 percentage points year on year to 36%,” it said.
Revenue performance in the capital markets saw the primary market up 1% at R83m; equity trading (down 5% to R261 m); equity derivatives trading ( up 1% to R59m); bond and Interest rate trading (up 27% to R46m), currency derivatives trading (up 33% to R18m) and Commodity Derivatives Trading (up 8% to R37m).
JSE group CEO Leila Fourie said: “The group's performance was supported by our ongoing focus on diversifying earnings through new business lines and growth in net finance income.
“The contribution of non-trading revenue now represents 36% of operating revenue (H1 2022: 34%), with double-digit growth in Information Services and JIS.
“We also maintained operational resilience with outstanding uptime across our markets of 99.98%, while the business continues to be cash generative alongside a robust balance sheet,” Fourie said.
She said the JSE remained focused on continuing to deliver its strategic objectives of protecting the core while growing the non-trading segment further to limit the impact of fluctuations in trading activity.
The JSE maintained a robust balance sheet and cash of R1.9bn on June 30, 2023, excluding bond investment of R195m.
Rising interest rates supported higher net finance income which increased 53% year on year to R135m.
Capital expenditure of R33m remained focused on protecting the core business as well as growing new business lines, with an expected pickup in capital expenditure activity in the second half of the year.
The bourse said it delivered resilient growth in an uncertain environment despite macroeconomic and political headwinds such as Financial Action Task Force grey listing, negative South African investment sentiment and diplomatic tensions.
“Our long-term strategic objectives are to grow and diversify revenue streams, invest in operational resilience, and further entrench sustainability in the business,” it said.
New market developments of the JSE included:
– Developing a South African Voluntary Carbon Market and Renewable Energy Certificates (RECs) market to improve transparency and liquidity.
- Accelerating potential funding solutions for carbon credit and REC projects and introducing carbon credit futures to enable forward pricing and unlock funding.
– Continued small and medium-sized enterprise focus including a pilot project with the Western Cape government, which supports capital matching and start-ups in the region.
- Investigating feasibility of alternative digital offerings.
- Developed a proof of concept with the South African Reserve Bank , for a tokenised securities platform that explores the benefits and risks of trading and settling tokenised securities in South African capital markets.
Looking ahead, the JSE said in the second half of 2022, its priorities include investing in the core business to sustain operations, continuing diversification of revenue including inorganic growth, progressing its growth strategy for Information Services, formulated on a five‑year horizon, and accelerating growth in new business lines.
BUSINESS REPORT