President Thabo Mbeki opened the JSE Securities Exchange on Friday morning, launching the bourse’s new equities market trading and information system.
Mbeki also used the opportunity to market the New Partnership for Africa’s Development (Nepad).
The systems, called JSESETS and InfoWiz, will better protect investors by making the stock market more transparent and by improving its liquidity.
After mouse clicking the market open, Mbeki said he had no doubts that the partnership between the JSE and the London Stock Exchange (LSE) that made the implementation of the systems possible would be of benefit to both parties and the continent as a whole.
”This is an important development and a critical partnership between our two stock exchanges,” Mbeki told an audience that included British deputy prime minister John Prescott.
”It is a partnership that I trust is of mutual benefit, and for us in South Africa will add the necessary impetus in our work of reconstructing and developing not only our country but the entire continent of Africa.
”Strategic partnerships with a number of globally prominent companies have had the simultaneous impact of exposing the South African capital markets sector to the rest of the world, bringing world-class services and infrastructure to the JSE and entrenching the JSE in the mind of the international investor as the gateway into the Africa market,” Mbeki said.
He added that stronger investment inflows would make funds available to support Nepad in eradicating poverty and underdevelopment, a major focus of his administration.
”The focus of all South Africans, and indeed all Africans, is the eradication of poverty and underdevelopment and setting our continent on a developmental path,” the South African leader said.
”One of the central objectives of this New Partnership is to increase private capital flows to Africa, as an essential component of a programme of ensuring economic growth and sustainable development.
”Obviously, one of the challenges facing us is to address investors’ perception of the continent as a ‘high-risk’ region, especially with regard to property rights, regulatory frameworks and markets. Most of the businesspeople who are doing business in many African countries will attest to the fact that these perceptions are in most instances exaggerated.”
Mbeki also praised the JSE for already playing a role elsewhere on the continent, by providing expertise and assistance to the Namibian Stock Exchange, for example.
He hoped it would in future play an even bigger role to the north. It was Mbeki’s first visit to the country’s financial heart.
JSE chief executive Russell Loubser and LSE deputy chairman Ian Salter enthused that the new systems would heighten the profile of Africa in London.
At the core of the technology agreement between the JSE and the LSE was the replacement of the JSE’s now-outdated JET Trading System with the London Stock Exchange’s new, world-class trading platform, dubbed SEQUENCE, incorporating the SETS order book.
”The JSE is coming under increasing pressure to become globally relevant and faces a number of challenges driven by global trends. We aim through this deal to become operationally excellent and align ourselves with European trading practices — a must for us in our time zone,” Loubser said.
JSE strategy director Leanne Parsons said the JSE would remain a separate entity but it would utilise a platform used every day in the largest exchange in Europe.
”Everything we do is aimed at increasing liquidity and providing transparent price information. Providing more in-depth price information — as JSESETS will do — improves transparency and leads to more confidence and stronger trade. The more transparent and liquid the market, the more investors are willing to participate.”
The partnership will be expanded in June when a new index, the FTSE/JSE Africa Index, is to be launched.
The JSE is the largest exchange on the African continent and is ranked seventeenth in the world in terms of market capitalisation. – Sapa