From the CEO - JSE MAGAZINE

From the CEO

The wave of innovation that has been the hallmark of the JSE since the imposition of SA’s state of disaster in March 2020 has continued apace ever since and, in particular, over the past six months

From the CEO

If we’re to properly rebuild, we have to radically transform the economy – and, indeed, ourselves. One of the greatest lessons of the global health pandemic, which has since morphed into economic and geopolitical contagion, has been the clarion call for all of us to build back better. This is particularly true in SA, where the seismic shock of COVID-19 brutally exposed our existing societal inequalities as well as unleashed smaller localised aftershocks that have shaken the edifice of the state.

We have to create a society that is sustainable. We have to build a society that is prosperous, provides jobs and opportunities, and supplies healthcare, shelter and water to all. This is becoming even more urgent in the light of our spiralling unemployment rate, but it’s vital that when we transition to this sustainable economy, we do so in a way that is equitable, strategic and just. The role of the JSE is primarily to enable the raising of capital to fund this. But there is more that we can do and, indeed, there is more that we are doing. One of the best ways to build the economy is to develop the SME sector, which we are doing through the creation of a trifecta of initiatives starting with the launch of the JSE Private Placement Market (JPP).

The JPP, which we launched in March as a collaboration with UK fintech Globacap after receiving our regulatory licence late last year, attracted more than R5 billion in potential investments in just three months. One of the recipients is an inspirational young entrepreneur named Mpho Khorombi who is building a 50-bed private hospital in Musina, in the very northern most part of our country. It’s a wonderful example of precisely what the JPP can achieve.

This month we graduated the first cohort of our cutting-edge JSE Enterprise Accelerator programme. We’ve now taken a total of 15 companies and fast-tracked their development using a blend of mentoring, masterclasses and webinars to help them access funding and scale their businesses.

The five companies that formed the pilot cohort, in which we tested and tweaked the programme before rolling it out last August, raised R800 million and increased their workforce by 40%. Now we are preparing to enrol the next cohort in August. Finally, we have created a companion incubator of incubators initiative to develop companies that would not qualify for the Enterprise Acceleration programme, which will be launched in due course.

These are green shoots, necessary in an economy that needs to develop and diversify as we help smaller businesses become bigger ones, with concomitant benefits for the exchequer, the job market and the SA community in general.

We continue to be very active in the field of the green economy. The JSE currently chairs National Treasury’s Sustainable Finance Working Group, and I am very grateful that our existing sustainability segment, which includes green bonds, will in all probability be the Treasury’s Green Finance Taxonomy benchmark, against which green claims can be measured. This means that the Green Finance Taxonomy can be implemented immediately by issuers on the JSE. The Green Finance Taxonomy allows all of us to participate, whether from a bourse perspective or that of an investor or issuer, finding opportunities and managing risk. Fundamental aspects of the green economy are transparency, accountability and, especially, credibility. This is something that resonates very strongly with us, given our unsurpassed 134 years of institutional integrity.

All of these are just some of the ways that the JSE is both contributing to the broader society we serve and fulfilling our primary mandate of assisting with capital formation. But they’re actually bigger than both because these initiatives are harnessing technology and market innovation to make us future fit in every possible way.

I have been very struck by the positive sentiments that I experienced during the recent roadshows that we have undertaken. These have been among the most positive receptions we have experienced in the past decade, because foreign investors are prioritising SA. One investor described SA as a safe haven for emergent markets. It’s a sentiment that we often might not think of ourselves as we become hyper-focused on local events to our own detriment. But the reality is that SA is performing well compared to the other partners in BRICS.

The capital flight arising from Russia’s diplomatic isolation and the incipient economic threat to it because of its invasion of Ukraine means SA is well positioned to turn the tide on net foreign disinvestment, while there is growing investor hesitancy around the uncertainty of the Brazilian general elections in November.

On an SA front, we have seen many positive indicators from the government – the initial long-awaited auction of spectrum and the tax windfall from the commodities surge. Coupled with the semi-privatisation of some state-owned enterprises and Moody’s April regrading of the country’s risk outlook, to stable from negative, you can see why many foreign investors are planning their own road trips to SA in the coming months.

We are continually being told that we are living in unprecedented times, but with that lies great opportunity too, especially for us in SA.

Dr Leila Fourie
Group Chief Executive Officer
April 2022