Geoff Rothschild, former JSE Chairman and Head of Government and International Affairs, on his decades with the exchange, retirement and the future of African markets


Q: You have had an association with the JSE that goes back nearly 50 years. How did that come about?
After qualifying as a chartered accountant in 1970, I spent nearly 30 years in the stockbroking industry with Sasfin Frankel Pollak.

Initially I got involved directly with the JSE in 1986 in connection with upgrading the brokers’ accounting system. I was a member of the JSE board from 1991 to 2008 and served as vice-chairman and then chairman for two years.

I’ve been employed by the exchange since 2003 and served as Director of Marketing and Education, Director of the Issuer and Investor Division and Director of Government and International Affairs.

Since 2012, I have been a consultant with the exchange, heading the latter role, promoting the JSE internationally and working with SA ambassadors to ensure they are properly prepared for their roles around the world.

Q: What have been some of the standout moments of your time with the exchange?
There are many but it was definitely a privilege to have been chairman [2000 to 2001]. I met the Queen, Prince Philip, King Juan Carlos of Spain, had meetings with the Governor of the Bank of England and was introduced to many other dignitaries.

Also, overseeing the JSE’s move in 2000 from the city to Sandton, to a building that received an architectural award for its design, ahead of schedule, within budget. Working with Russell [Loubser, former CEO] and Nicky [Newton-King, current CEO], has been a highlight too.

Through everything, the people have been the most important to me. ‘Find people with the right skills and let them grow’ is a mantra. It’s been an incredible journey and I hope I have made a contribution to the JSE’s development.

Q: Looking back, what have been the main changes to the JSE and broking world since you first started in the industry?
In the ’70s, you could know everything. It was just equities, really. Today it’s all very specialised. Bonds, equities, derivatives… they’re very different. Back then, you could compare the industry to school. There was initiation, for example.

Skills once sought after, such as script clerks, don’t exist anymore. But there was camaraderie. Everyone knew everyone. That’s all gone. Now most brokers spend their day looking at a computer screen.

But I would say the greatest change has been technology. When we moved from the open outcry system in 1996 to electronic trading, if there were 3 000 deals a day, the brokers almost imploded. Now the JSE does 250 000 deals a day and no one blinks.

‘There has been a giant leap in sophistication and many African exchanges are conforming to world standards’

Q: How has business changed?
The risk environment for one. Things are a lot more short term now. Profits, for example. We need to ask ourselves, is business sustainable? Do we live in a sustainable society? What is ethical? Is it maximising profits? Companies that cut and cut staff… is that sustainable? I don’t think so.

Q: You’ve worked a lot with African exchanges, both as the JSE’s represent-ative on the SADC Stock Exchanges committee and on the executive committee of the African Securities Exchanges Association. What is your impression of the development of the continent’s markets?
African markets are maturing. There has been a giant leap in sophistication and many exchanges are conforming to world standards. A few years ago only the JSE was a member of the World Federation of Exchanges – now there are five African members.

Q: Nicky Newton-King has called for more regional exchanges in Africa. Do you agree?
I do. There are some exchanges operating that one would question. Should they be there at all? At the basis of everything is the business plan. Is there a business case for a smaller exchange that is illiquid; that has a handful of companies listed that barely trade?

Systems cost a lot to set up and maintain. I think many smaller countries battle with costs and those exchanges are not sustainable.

Q: What would you recommend?
Bilateral arrangements firstly, and then over time morph those into regional groupings. There is some incredible potential but the biggest lesson that I have learnt is you’re only as strong as your neighbour. Countries need to work together.

One country might have 50 million people but put a region together and there are 250 million people. That’s a big market.

Q: Where does the potential lie in Africa?
There is massive urbanisation but for the foreseeable future, many jobs will still be in agriculture. Investors and countries need to look at agribusiness.

This is critically important. Africa is the continent with the biggest untapped arable land resources. There are many challenges – among them sorting out the water situation – but the potential is there. Sub-Saharan Africa can be a breadbasket and the Congo river, a [hydroelectric] powerhouse.

Q: And the problems?
Infrastructure, or rather the lack of it. The biggest challenge for every African country is to renew infrastructure. Road, rail… you name it.

I still believe rail holds a big opportunity for Africa. Sort that out and it can impact hugely on enhancing cross-border trade.

Q: What are your personal plans after retirement from the JSE?
I’ll still be involved with the Nepad Business Foundation, the Nelson Mandela Children’s Hospital, Brand SA, the Grootbos Foundation and Education Africa – among other things – and certain consultancies. Let me put it this way: I’m definitely, definitely, definitely not going to give up working. But I am looking forward to spending more time with my wife, Barbara, and family.

By Patrick Farrell
Image: Gallo/GettyImages