The end of an era dawned when SABMiller delisted from the JSE after 119 years as one of the most visible and liquid stocks on the JSE. SABMiller was an important component of our benchmark indices and regularly among the most traded stocks every day. At the JSE, as we welcome AB InBev and its executive team, we will miss not only the activity but also the engagement with the larger-than-life executives that SABMiller seemed to produce.

However, global brewing giant AB InBev’s $104 billion takeover of SABMiller is also testament to how the company has managed to evolve and adapt in order to remain competitive in the fast-paced, globally integrated world in which businesses have to operate and compete today. In a world like this, ‘eras’ simply do not exist anymore. Everything changes too quickly.

This constant state of flux is particularly visible in the global financial market system in which the JSE operates. New technology and new regulations – from distributed ledgers to twin peaks – are but two of the factors to which players in the financial sector continuously need to adapt in order to survive.

How the JSE responds to this changing environment has a direct influence on the ability of many other participants in SA’s financial markets to adapt their own services and operations. We are therefore very conscious of our responsibility to a broad range of stakeholders: from our listed companies to the sell and buy side; from our shareholders to our staff; from policymakers to ordinary South Africans.

That wide perspective impacts how we run our business and how we invest our resources. Every business aims to provide its clients with products and services that they want and need. What makes the lives of our stakeholders easier and more efficient is also good for the JSE. And so it has been with the delivery of our two large technology projects this year – T+3 and Phase 1a of our integrated trading and clearing project.

In July, after a massive effort across all our clients on the buy and sell side – for which we are very grateful – we implemented the transition to a shorter three-day settlement cycle, referred to as T+3. This move aligns SA with international best practice settlement standards. In what we think is an unprecedented achievement globally, we have had no rolled or failed trades – a real achievement for the entire industry. This change significantly reduces the potential risks and losses between trading parties, thus enhancing investor protection.

We are well on the path to replacing our derivatives trading and clearing platform so that all derivatives will trade on the same robust platform as our equity market. The first step was to upgrade our equity market platform, which we completed on 26 September, again with great client collaboration. As part of this upgrade, we introduced new functionality to allow large trades to match anonymously within the best bid and offer, with minimal market impact. This functionality has been well received by clients.

Moving forward, we see the increasing importance of our market data and index business as well as our post-trade services business. We will be making important investments in these areas in future.

I write this having just returned from the 4th annual SA Tomorrow Investor Conference in New York during which business leaders, the Minister of Finance, Governor of the Reserve Bank and labour representatives addressed global investors in a more unified voice than ever before. This conference formed part of the hard work representatives from both government and the business world have been doing over the past few months to ensure that SA maintains the confidence it has managed to build in the minds of international investors.

That said, like you, we enter the last quarter in an environment of relatively low growth, great uncertainty and much political noise. This makes it a tricky space for all our stakeholders. At the JSE, we will continue to make sure we offer issuers and investors the best possible products and services, and to work hard to do our bit to build on the business case for our country.

Nicky Newton-King
Chief Executive Officer, JSE

October 2016
Image: Ricardo Lategan