Outgoing JSE CEO Nicky Newton-King. Picture: SYDNEY SESHIBED
Outgoing JSE CEO Nicky Newton-King. Picture: SYDNEY SESHIBED

The CEO of Africa’s biggest stock exchange, Nicky Newton-King, is retiring after eight years at the helm, at a time when foreign investors are ditching SA stocks in droves. 

The JSE, which on Tuesday announced Newton-King was leaving, also reported that its interim net profit after tax tanked 29% to R398m. Headline earnings were also down 29%. 

The last time the stock exchange’s earnings recorded a double-digit decline was in 2012, when full-year headline earnings fell R406.4m.

Newton-King said the JSE recorded over R30bn in divestment by foreign investors in the first half of 2019.

JSE CEO Nicky Newton-King speaks to Business Day TV about the bourse's interim financial results as well as her decision to step down after eight years at the helm.

“We are competing with many other emerging markets for international investors’ attention. We have to realise that if we don’t get our narrative right, if we don’t get growth going, we cannot compete,” she said.

She said local equities, in particular, were badly hit by the decline in international investor interest, with the value of trade a day declining by 11% to around R19bn compared, to R22bn in 2018. The JSE generates about 60% of its revenues from equity trading.  

The JSE said bonds were one asset class that showed a good performance, with nominal trade value up 21% in the first six months. Profit growth was also negatively affected by the fact that the JSE’s total revenue decreased 8% to R1.08bn, while operating costs increased by 11% to R670m.

The dire performance in the first half of 2019 follows the local stock market’s worst performance in a decade, which saw the all share index (Alsi) closing 11% down in 2018. The last time the Alsi recorded a worse performance than that was during the 2008 global financial crisis, when it lost 25.72%.

Newton-King said while investors have been selling off emerging markets stocks for a while to find shelter in bonds and other asset classes, SA’s woes have been exacerbated by unique local challenges, especially lack of growth. The country recorded a 3.2% contraction in GDP in the first quarter of 2019.

Newton-King said she will take a year off to spend with her family but she is deeply committed to SA inc. and hopes another door can open when she returns. The JSE announced that Leila Fourie, who previously served as an executive director of the JSE, will take over as CEO.

“She (Nicky Newton-King) leaves the JSE stronger, more diverse, more technologically advanced, commercially savvy and client-focused,” chair Nonkululeko Nyembezi said. /With Reuters

buthelezil@businesslive.co.za