Most African Capital Markets are too small to attract the attention of international investors, the Chief Executive Officer, Johannesburg Stock Exchange (JSE), Dr Leila Fourie has said.
To reverse the trend, Fourier has called for adequate liquidity through greater integration.
Fourier said: “Looking at the exchanges on the African continent collectively, our primary focus as market infrastructures is boosting liquidity through greater integration.
“Intra-Africa portfolio flows are limited and most African markets are too small to attract the attention of international investors.
“Addressing this is, therefore, critical to ensuring the viability of these markets.”
In an interview published in the current edition of WFE Magazine, Fourier said: “Looking at South Africa, and the JSE specifically, my prediction is that the market infrastructures that make up the JSE Group will both look very similar to market infrastructures in other parts of the world but with unique South African characteristics.
“We will have expanded into new products and services, some of which may be more associated with the idea of the exchange as a network, rather than a marketplace; the range of products that are cleared will have expanded; and “we will be using new technologies such as AI, and doing more things “in the cloud”. Data and data analytics will be an important part of our service offering. Rather than simply delivering solutions to clients, we will look to co-create them.
As a South African infrastructure provider, there will be a strong focus on financial inclusion, on promoting SME growth and on enabling sustainable development. This will be delivered by an empowered and transformed workforce that is representative of the demographics of the country. “Finally, the exchange will be an active participant in shaping the national agenda, working alongside government, civil society and the private sector to ensure South Africa delivers on its potential.
“With regards to African integration, the JSE is participating in the African Exchanges Linkage Project. This is an initiative led by the African Securities Exchanges Association and supported by the African Development Bank, which aims to enable cross-border trading and settlement of securities amongst participating exchanges. In total there are six exchanges (including the JSE) and one regional exchange grouping in the first phase of the project, covering every part of the continent.
“Closer to home, we’ve already begun to diversify our service offering with our pending acquisition of a share registry, custody and investor services business, Link SA. We are also investing in enhanced data analytics capability, and making our data available in the cloud. We continue to invest in our core technology with planned upgrades to our equities trading technology in the course of 2020. In the post-trade space we are exploring the introduction of an OTC-clearing solution and have commenced a project to enable the acceptance of non-cash collateral. In the realm of sustainability, we are expanding our green bond offering and will look to introduce social impact bonds in the coming year.
“Because our people are so important to achieving our objectives, we are investing significantly in training and development to make sure they have the skills to take us into the future.
“The incomparable Nelson Mandela (known, with great affection, as Madiba) said “there is no passion to be found in playing small, in living a life less than the life we are capable of living”. This really struck me and played no small part both in my decision to take up rock-climbing (perhaps later in life than one would expect!) and to return to South Africa to take up the role of CEO of the JSE. I think it is a privilege to run an organisation like the JSE in a country like South Africa, and it deserves my passionate engagement.
“Also implicit in Madiba’s words is the idea that life should not be static, but rather an ongoing journey of growth and development. This is not just about pursuing formal opportunities to learn, but also about learning from everyday interactions; about being open to learning and the avenues for learning that present themselves.
Which brings me to the perhaps the most significant thing I’ve learnt, which is about the importance of listening. As leaders we often talk about the importance of listening, but then we get caught up in a perceived need to have all the answers. I believe that you can’t lead if you don’t listen, whether that is listening to your employees or listening to external stakeholders. This is about inquiring, not always advocating.
“For me, these three ideas – be passionate, constantly look for opportunities to grow and develop, and listen – belong together, both in how I choose to lead and how I live my life.”.
