From the CEO

For the first time in history, we are united in a war against a common enemy – an invisible virus that is threatening the lives of our people.

From the CEO

The coronavirus pandemic is a humanitarian catastrophe that’s pulsing across the globe. With 80% of the world in lockdown, these are extraordinarily uncertain times. For the first time in history, we are united in a war against a common enemy – an invisible virus that is threatening the lives of our people. Our only defence is to stay away from one another so we can be close to each other in time. The worldwide quarantine has created an unavoidable economic meltdown, but the central issue is how this crisis is affecting our people. We are seeing leaders rise up in the midst of this calamity, leading with decisiveness – resolute in their purpose and their vision. We are finding strength we never knew we had, and we’re tapping into our ingenuity, resourcefulness and innovative thinking, to manage our businesses, our communities, our families and our lives in a new way. It is now that we see the best in our humanity emerging, and this newfound perseverance will see us grow in the crisis and beyond.

We at the JSE appreciate fully that we are an essential service at this time of national and global disaster. The pandemic has created massive challenges we’ve had to overcome. Economic growth conditions for SA were close to 0% before coronavirus. Now we are almost certainly looking at a much greater contraction and some economists are expecting recovery in 2022 or later. This uncertainty has stoked enormous volatility in trading across all sectors of the market, with equity market cap being sliced by 18% during the first quarter. As infection rates grew rapidly across the world, we saw some of the largest single-day drops on the ALSI in our history. Trillions were wiped off global exchange market values. The market remains under stress and is creating a compounding effect as one crisis leads to another. We had to consider closing the market or reducing trading hours and what this would mean for financial-market stability. At the same time, some companies also wanted to change their dividend declarations because of the stress on their share price. One of the more topical challenges we’ve faced is the question of short selling. The JSE is regarded as an emerging market with very deep and liquid markets, and it is often seen as a destination for short selling of dual-listed stocks. Without the protective mechanisms that we have in place, this could have very damaging consequences, eroding even more value from our market.

All of these factors, plus the daily uncertainty, have led to tremendous market complexity that has not entirely subsided. Managing this successfully was no easy task, and I am very proud of our team who ensured no disruptions to our trading, clearing or settlements, despite extreme market volatility and unprecedented volumes. We have maintained market liquidity throughout, ensured price transparency and, crucially, always provided fair trading in a free and equitable environment. Many of our employees have been working very long hours from home to do this. The JSE has a relative advantage at this time of global lockdown as, unlike other bourses, some 90% of our employees have worked remotely for some time now. This has meant we were able to ensure business continuity and ensure the health and well-being of our workforce. I must commend the entire JSE team who played their part in keeping us fully operational and finding pioneering ways to solve problems.

At this time we’re pledging to support our suppliers and, in doing so, ensuring a broader ecosystem continues to keep the exchange open and facilitates trading. One of our top priorities is to find ways to help our partners in the SME space, many of whom are vulnerable to this economic downturn. In our efforts to make a difference, we partnered with Business Leadership South Africa in the distribution of health and hygiene hampers to communities in need across Gauteng.

One of our most important social-impact initiatives was #Trade4Solidarity. On 15 and 16 April, we pledged trading fees earned across all our asset classes to the president’s Solidarity Fund. We invited market participants to join in, and I’m grateful to report that we received a really strong show of support, generating R34.4 million in pledges. We went one step further, and the board and I pledged 30% or more of our emoluments/salaries to the fund. Executives also contributed to the fund and we appealed to all JSE employees to contribute in their personal capacity. I must applaud all my colleagues who gave so generously, and without reservation. This is a true testament to the JSE way. #Trade4Solidarity was a huge success, so thank you one and all for contributing so magnanimously – all monies raised will assist in the fight against COVID-19.

In closing, I want to thank the regulators, my board, leadership team and employees for their resilience and steadfastness to help us through this extremely difficult time. I cannot express enough how proud and grateful I am to you all. Now, more than ever before, we must find ways to strengthen our solidarity across all of society. Let us remember to have compassion for one another. We will rise up, and we will survive this crisis. But we cannot do it alone – nor should we try.

Leila Fourie
Group Chief Executive Officer
April 2020