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Johannesburg - A dramatic slowdown in global equity markets and plummeting volumes in derivative contracts failed to cripple the JSE's financial performance, as it pursued growth by acquisition and product development.
The company responsible for managing South Africa's stock and futures exchanges - which recently added the Bond Exchange of South Africa (Besa) to its portfolio - reported headline earnings of R183m for the six months ended June 2009.
Personnel expenses for the six months rose 28% to R129m. The group attributed this to an increase in the number of employees, which went up as it brought its information technology systems in-house.
No interim dividend was declared, in line with its policy to only pay out annually.
In commentary accompanying the results, CEO Russel Loubser pointed out revenues for the exchanges are largely driven by trade volumes.
High levels of uncertainty have seen a number of retail and institutional investors fleeing the markets, with significantly lower trading volumes on exchanges around the world.
Equity trading fees contributed R145m in revenue, up from R121m in the previous year while equity derivatives fees slipped from R67m to R53m.
"New products planned for the second half in cash and derivatives markets should provide trading volume in the medium term," said Loubser.
The JSE completed its takeover of the loss-making Besa in June, which it aims to consolidate with its existing Yield-X product offering. At the time the transaction was acrimoniously viewed by some Besa shareholders, including Mark Barnes of Purple Capital, who felt that the exchange had not been given a chance to generate profits.
According to the JSE, had it consolidated Besa for the full six months it would have contributed about R30m in revenue but made an overall loss of R4m. The company pointed out that it would now be able to benefit from "economies of scale with the combined offering".
At the time Barnes also argued that competition in the exchange space could be hampered if all the major exchanges were controlled by a single entity.
Paul Theron of asset management firm Vestact described the results as "solid" and the firm as "well run".
The JSE Ltd share price was unchanged in late trade on Tuesday at 5 850c.
- Fin24.com
*The author holds shares in JSE Ltd.
