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Cape Town - The JSE is preparing to focus on meeting challenges head-on, Nicky Newton-King, CEO of the oldest stock exchange in Africa, said on Friday.
That is why the stock exchange aims to drive greater efficiencies within in its business. It plans, for instance, to reduce its technology operating expenditure by a minimum of R70m over a two-year period and to reduce the number of full-time staff by 14% (about 60 people) this year.
Once completed, the various initiatives are expected to result in annualised cost savings of nearly R170m, which will be fully realised from 2019 onwards. This is in addition to nearly R65m annualised savings already achieved to date through a combination of removing vacancies and reducing discretionary spending.
“On a macro-economic level, South Africa continues to be plagued with low economic growth, rating downgrades and a loss of business confidence. This has negatively impacted market activity," Newton-King said in a statement.
"The fast-moving nature of our business requires us to change the way in which we operate so that we are as nimble and as cost effective as possible. We cannot do so without significantly rethinking our cost base, our operating model and the way we are structured as a business.”
Cost effectiveness
The JSE aims to deliver cost effective solutions to its clients in an industry it describes as currently characterised by constant technological disruption and innovation.
According to Newton-King, globally securities exchanges and other players in the financial services industry are adjusting the way in which they operate in response to changing regulatory requirements and fast-paced technological developments.
The JSE is, therefore, refreshing its IT operating structure to align to best practice.
“Our large dependency on IT requires using technology in a more agile manner to support the execution of our business strategy,” said Newton-King.
“If we want to create a building block for future growth, we must take some early decisions and there are none tougher than those that involve our people. We looked at all avenues before considering this action. While we appreciate this will be a very difficult time for the affected employees, the newly aligned company will be in a strong position to serve its current and future clients more effectively.”
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