The JSE, Africa’s largest bourse, warned on Friday that its full-year profits would fall by a fifth, as it ran up costs to employ more people and implement new technologies against a decline in first-half trading.

The JSE had a difficult year, with more than R30bn worth of divestments in the first half of 2019 followed by the departure of CEO Nicky Newton-King after eight years at the helm.

Interim net profit fell 29% to R398m.

In its latest update to the market, the JSE said earnings per share for the full year to end-December would be up to 26% lower, at between 845.2c and 781.81c, compared to 1,056.5c per share in the previous year.

“Despite the challenging economic environment in SA, which affects investor appetite and activity, we remain confident in the JSE’s targeted, strategic plans to grow and diversify revenues, and to invest in key technologies,” the bourse said.

“These actions are necessary to maintain the long-term sustainability and competitiveness of the JSE as a critical component of the SA financial markets ecosystem.”

Headline earnings per share, which reflect the one-off items incurred during the year, were expected to fall by a similar amount to between 844.96c and 781.58c, down from 1,056.2c a share a year earlier.

The JSE said there were a number of reasons for the decline, including the fall in trading activity in the first half of 2019, which reduced revenues, combined with the introduction in August 2018 of a tiered billing model that made it cheaper for those buying and selling shares.

The stock exchange also stepped up recruitment to address the lack of staff noted in 2018.

Included in the one-off items was costs related to the change in executive leadership as Newton-King retired and was replaced by Leila Fourie as CEO. The cost of the executive change was R37m.

A R31m income-tax credit in 2018 would not be repeated in the 2019 results.

The JSE said in August it had agreed to buy 74.9% of Link Market Services SA, the country’s second-largest share-register business whose clients include six top-40 companies, for R224.5m using cash reserves.

The costs incurred during 2019 related to that transaction were R6m.