Warm welcome, ladies and gentlemen. My name is Phuthuma Nhleko, Chairman of the JSE. I'm joined on the podium by our Group CEO, Dr. Leila Fourie. Other members of our board are also present. We have several guests joining us today from the media, so welcome to all of you. This is the nineteenth Annual General Meeting of the Shareholders of the JSE, and the second AGM that I have the privilege of chairing since my appointment to this role in 2022. The annual meeting of shareholders provides an opportunity to reflect on the progress made and to look forward to the future strategies and initiatives planned by the board and executive management. This engagement with shareholders is an important part of our stewardship obligations, and the JSE board is mindful of these responsibilities.
Although this is the nineteenth AGM of the JSE as an incorporated company, the roots and history of the JSE stretch back 136 years to the earliest days of the mining boom in South Africa. As a member-owned organization, those annual general meetings took a slightly different format, but we are an equally important, They were an equally important element in the life of the JSE. So despite the sophisticated, meeting technology, today's AGM still has, in many respects, resonance with the past and is another milestone in the JSE's long history. There are, of course, a number of companies listed on the JSE today that trace their roots to those early days, a testament to their resilience and to the strength, of our capital markets.
Many of these giant organizations, as you, you are all aware, have become, in, in many respects, quintessential parts of South African business over a century, and some growing into global champions and merging into large international businesses. The JSE's part is, it, it, it plays its part in facilitating this evolution, with many companies listing to raise capital to enable international growth. There are a few emerging markets that can do the same. We should want South Africa to continue to produce these global giants, which it can, with the right environment and the right policies.
This requires legislative and regulatory certainty and trust in the bona fides of business and government, respectively. With the right political will and the ongoing commitment of business, South Africa can regain its reputation as an investment destination of choice, with the associated positive consequences for economic growth and employment.
So there's benefits all the way around. However, in creating the ideal environment for economic growth, this cannot be done or be solely the responsibility of the JSE. It requires a multifaceted approach with business, government, and regulators collaborating closely to develop a vibrant investment culture. There are several ways in which this goal can be achieved. One initiative would be to create investment products that enable retail investors, to easily invest in domestically focused, small and medium-cap funds. Pension funds reform is another option. Government could easily consider policy changes that provide capital gains and dividend tax relief for individuals.
All these initiatives taken together, they could contribute to developing an ecosystem that encourages active retail participation in the markets. It's all intertwined. This would, in turn, provide encouragement for small and medium-sized businesses to list, thereby creating the flywheel for further growth for the country.
If we need any encouragement, there are many excellent examples of success of this collaborative approach, particularly in the European markets. Probably Denmark and Sweden are the most recent examples of that success of a conducive ecosystem. Of course, exchanges need to play their important role in this evolution. The JSE has embarked on a process to radically simplify its Listings Requirements, and is considering a proposal to segment the Main Board to provide relief for smaller cap companies that are not included on the JSE FTSE All Share Index. We're not alone in these efforts, with exchanges in many jurisdictions making similar adjustments to encourage access to their markets.
I'm therefore quite hopeful that in a post-South African election world, we can redouble our efforts and work closely with government and regulators to reinvigorate our local markets, to enable the growth and development that we all so desperately need in this country. In my remarks at the last AGM, I touched on the tragedy of the many wars, the war in Ukraine, and the consequential disruption to global supply chains, and how that was accelerating inflation and exacerbating the cost of the living crisis. More recently, of course, we are all very much aware of the tragedy and the ongoing crisis in the seemingly intractable conflict in the Middle East, with the entire population that has now been displaced in Gaza with very tragic consequences.
These conflicts all extract a heavy price in social upheaval and upend economic progress, not to mention the years of reconstruction efforts that will desperately be required after peace returns. So while global geopolitical events impact our markets, we cannot direct or influence these events. Instead, our role as the board is to ensure that management strategies are sound and are executed well, and that we strengthen our core operations and enhance our resilience as an operator of financial markets in South Africa. These actions are collectively focused on ensuring that business is well positioned for growth. So in our Vision 2026, our strategy sets out clearly the objectives to drive sustainable, high quality earnings over time. We've already made some important strides to diversify our revenues.
Over the past four years, we have reduced our reliance on equity trading and increased the proportion of non-trading revenue from 29% in 2019 to 37% of total operating income in 2023. Management is also focused on building the foundations of our market data business, with the aim of growing that revenue, you know, of this particular segment in 2024. Together, with a commitment to our inorganic growth strategy, I'm confident that we will realize the goals of Vision 2026. So in returning really to the governance matters, having given you that, context and background, I should advise you that earlier this year, Nolitha Fakude retired from the board, having served for a six-year term as an independent non-executive director. Nolitha chaired our group RemCo, a role she navigated with consummate skill.
She, you know, has made a very significant contribution to the JSE's affairs during her tenure, and the board are very grateful for her service. As part of the planned succession process, Faith Khanyile, sitting on my left there, joined the Group RemCo at the beginning of 2023 and succeeded Nolitha as RemCo chairman in January this year. Directors retire by rotation at each AGM. Ian Kirk, Faith Khanyile, and Zarina Bassa, all independent non-executive directors, are obliged to retire by rotation at this meeting. All three are eligible for re-election and are therefore standing for reappointments to the board. The board is well-placed, well-balanced and diversified with an appropriate mix of skills, experience, and tenure. In any organization, it is the leaders and the staff that shape its success through their passion, energy, and efforts.
Leila, sitting right here next to me, has championed a new growth strategy throughout her tenure and has demonstrated a very strong commitment to diversifying the JSE's earnings. I'd really like to acknowledge Leila's efforts, and the service, and her service to the JSE as Group CEO, as well as the leadership teams and all our staff. It's really your commitment that has made a remarkable difference and makes the JSE the special institution that it is. So really, on that note, I'd now like to turn to the administrative formalities of the AGM. We should have our agenda reflected on the screen there. I trust everybody here, including those that are online, have viewed the agenda, and they can also access a copy of the agenda in the AGM notice.
And the reports, of course, are tabled at this meeting, as well as on the group website. So I think in going through very briefly through the agenda for today, once we've dealt with administrative matters, I will table our financial statements and reports as required in terms of the Companies Act under agenda item two. I will then thereafter present the AGM resolutions under agenda item three, and the shareholders will have the opportunity to ask questions, to be clear, specifically relating to the AGM resolutions only. And we will address those questions before voting on the resolutions. Our scrutinizers will then confirm the results of the voting. Thereafter, we'll move to agenda item four, and our Group CEO will offer her reflections on the year, as well as on the JSE's future strategies and initiatives.
Following Leila's address, you may then have, you know, questions to ask on the JSE's strategy, its business or its operations, or perhaps even policy matters on the health of our capital markets. We, of course, welcome these questions from shareholders and from guests, and we'll defer those questions to the open Q&A session under agenda item four. Coming back really to the etiquette of the AGM and how we'll conduct that. This is an AGM conducted in person, needless to say, and it is also being live-streamed to enable the widest possible participation by shareholders. This electronic participation is permitted by the Companies Act of 2008, the JSE Listings Requirements, and the JSE's Memorandum of Incorporation.
Throughout the meeting, the relevant information will be presented on the screen, and there will be four ways in which you can ask questions. First, for shareholders and guests that are present here today, please raise your hand and I'll call you to address the meeting. Second way is for the online participants. Please click the Raise Your Hand icon. Once you've been identified by our meeting convener, your microphone will be unmuted, and you'll be able to ask questions and engage with online participants and with us here, you know, obviously present at the JSE. Online participants may instead wish to submit questions or comments via the chat box using the Q&A icon at the bottom of your Zoom screen. So if you use that method, please type your name, organization, and question and click Send, needless to say.
Your question will be published and answered during the course of the meeting. Finally, the fourth method or alternative is you can email your questions to our Investor Relations team at jsegroupagm@jse.co.za. The AGM is an important opportunity to engage with our shareholders, and of course, we are keen to hear your questions and comments. I trust that the manner in which this AGM is structured and the four ways which I've outlined will enable you to pose questions and comments, and will provide appropriate, effective access to the JSE board. A word of thanks for you who have already engaged with us in the lead-up to the AGM. I think that really assists us greatly. And please note that only shareholders reflected in the share register and in possession of the necessary letter of representation ...
or a person holding a valid proxy which has been filed as required, are entitled to speak and vote at the meeting. Visitors and guests are welcome to pose questions in the open Q&A session later, in the meeting. The notice convening this AGM, including the agenda, was posted on the 28th of March 2023, in compliance with the prescribed period for a notice, of meeting. We also provide a free service to shareholder JSE, to shareholders of JSE Limited. All company communications, including the AGM materials, are available on ShareHub, our electronic portal. If you haven't registered yet, you can get access on ShareHub at www.sharehub.co.za. So I propose that the notice of the AGM and the agenda are taken as read. Shareholders represented here today may wish to propose additional items for inclusion on the agenda.
I mean, if you wish to do that, please raise your hand now, to address the meeting if you'd like to propose additional items. We don't mind you prolonging the meeting, so you can do it. Yeah. Okay, so no, no additional items. Let's get to the quorum. The quorum requirements for this meeting are prescribed by Memorandum of Incorporation and the Companies Act. At least three members entitled to vote must be present in person or represented either by proxy or letter of representation, and at least 25% of shares in issue must be represented. Our scrutineer has confirmed that those conditions have been met and that a quorum of shareholders is present or represented at this meeting. So accordingly, I declare the meeting properly constituted. The JSE has appointed The Meeting Specialist (Pty) Ltd and specifically Mr.
Izzy Francis, as a scrutineer to manage the poll and ensure all votes are correctly recorded. Our external auditors, Ernst & Young, are also in attendance to exercise oversight. I did refer a little bit earlier to our directors that are in attendance at this meeting today, including the chairpersons of our various board committees, which I will, you know, beg their indulgence and ask them to assist in answering your questions, as needed. So Dr. Suresh Kana is our Lead Independent Director, and the Chairman of the Group Audit Committee and of the Group Sustainability Committee. Faith Khanyile, she is the Chairperson of the Group Remuneration Committee. Ben Kruger is the Chairman of the Group Investment Committee. Zarina Bassa is the Chairperson of the Group SRO Oversight Committee, and Ian Kirk is not with us, but is online.
He's not present in person. He's Chairman of our Group Risk Management Committee, and of course, he's joining us via link. And then Fawzia Suliman is our esteemed CFO, who is also on the table. Okay, so that's the team that hopefully will be able to address all your questions. So with that, I'd like to move on to agenda item number 2, and that's the presentation of the financial statements and reports. The required documentation for this meeting has been in your hands for some time now, and it includes the Audited Consolidated Annual Financial Statements for the year ended 31 December 2023, including the Directors' Reports, our au- our Group Audit Committee's report, and the Independent Auditors' Report.
It also includes our Integrated Annual Report for the 2023 financial year, our Governance and Remuneration Report, and the Sustainability Report, both for the year end of December 2023. These reports are comprehensive and address the various activities of the group for the year 2023. So I hereby formally re-present these reports to the meeting and will take them as having been read. These reports are non-voting items, except for the Remuneration Report, which is subject to an advisory vote later in the meeting. We now move on to the business of this AGM, being the presentation of the AGM resolutions and voting under agenda item 3. I'm pleased to present and propose the various AGM resolutions as contained in the notices of meeting.
A list of these resolutions is now being displayed on the screen, so I'm not gonna read every single one of them. I'm sure you can read them. Our resolutions deal with ordinary and special business, and include the required advisory resolutions relating to remuneration policy and its implementation in 2023. Please note that in terms of the JSE's Memorandum of Incorporation, resolutions at the meeting will be voted by means of an electronic poll rather than by a show of hands. So before I invite you to cast your vote on these resolutions, shareholders are entitled to ask questions relating to these proposed resolutions. Any general questions relating to the business of the JSE will be deferred to our open Q&A session later on these proceedings.
So I would really invite you to please identify yourself as a shareholder, the name of your organization, and state the specific AGM resolution that you wish to question. You may raise your hand now to really address the meeting or submit your question via the chat box. So, let's take questions, you know, relating to the resolutions from the participants. I think if we can obviously begin with the people in the room first, then we'll go to the chat box. Yeah? Thank you.
My name is Paul Miller. I represent myself, and I will be voting 300 shares today. I'd like to address ordinary resolution number one, which relates to the re-election of the directors. I'm not at all concerned about re-electing these particular directors and intend to vote all my 300 shares in favor. However, I listened intently to your opening remarks, and it's pretty clear to me that, the creation of retail-friendly product and the attraction of small and medium companies to the JSE are important to the JSE. However, it's very clear to me, too, that not only does the JSE tend to employ all its outside employees from large organizations, it staffs all its advisory committees with representatives of large organizations.
And all your directors, I have to say, represent or have experience in large organizations. In fact, I would suggest that what we have here is a board of directors that represent Team Big Business. How is that going to create an environment where this exchange can attract more retail investors and the entrepreneurial end of our exchange, which I don't see represented here at all?
Well, I think the only big organization I represent, for example, is the JSE. I don't know of another one that I represent. So, I would tend to agree that South Africa does tend to be top-heavy with large institutions, and we continuously look at evolving the board and getting a different set of skills. I think it is also true to say that while some of the directors have been on large companies, it has not been really a perpetual characterization of where they've come from.
So the fact that they may sit on a large organization doesn't necessarily mean that they can't bring skills and views that would be useful to really creating that retail base. Having said that, I think we note the point, and I think as we try to evolve the board and make it more and more diverse, that's something that we will take into consideration. So I accept the point. Yes.
Yeah. Hi, Paul. Thanks, thanks very much for your question, and, like you, we too are very much focused on the retail market. It's a very important growth node for us. And I think if you look a bit deeper at the experience of some of our board members, you'll see that many of them come from businesses which have a very large retail footprint. Ben Kruger, who is the group CEO of Standard Bank, Zarina Bassa, is on the Investec board. Both of those banks are focused heavily on the retail market. Both of those banks have very large retail trading brokerages. And in fact, indeed, our own chair was the CEO and chairman of one of the largest telco. Well, the largest telco in Africa, which was very heavily retail-focused.
It's certainly a key priority for us and certainly top of mind for many of the board members. Their experience, although it's a large business, it is certainly still very much focused on the retail mindset, and it remains an important priority for us.
Yeah.
Chairman, I've got a hand raised online. It's Chris Logan. Chris, go ahead and ask your question.
... Yes. Hi, Mr. Chairman, can you hear me?
Yes, we can hear you clearly.
Yes, thanks very much. Thanks very much, in particular, for a very elegant, pertinent, and informative opening address. And, yeah, I did submit some written questions which you've already touched on, so I'm gonna try and cut to the chase, if that's okay.
Sure.
But before doing that, I'd also like to just thank the JSE for its progress in, you know, in growing other revenue streams and revising the Listings Requirements. Look, what weighs heavily on one in deciding whether to vote for this board is: why has this board not been able to get the supportive policies, which some of which you talked about, in place? Because, you know, whether we like it or not, the exchange is shrinking, if not dying. You know, we faced with an awful situation in South Africa, which is gradually becoming more and more appreciated by even the big mainstream asset managers. So the question which, you know, I'd really like an answer for is: Is the board trying to get these supportive policies in place? And if so, why haven't they been successful? Thank you.
Thanks, Chris. I will give you my response, and I'm sure Leila may also want to add one or two words to that. Well, first of all, the stock exchanges anywhere in the world are essentially an integral part and product of their macro situation, and the JSE is no different. You may be aware of an article that was circulating in the FT in the last 10 days or so, that was, for instance, outlining the success of the Swedish Stock Exchange, which is one of the examples that I referred to a little bit earlier.
If one looks at the essence of what has happened there in Sweden, it was that the vast ecosystem that's essential to ensuring that the stock exchange is successful, whether it's asset managers, fund managers, government, government policy, and all the enabling factors, are really all the things that came together to make that one of the examples of a growing and successful stock exchange. The South African situation has got a number of facets that are different from Sweden, not to, you know, mention the different, you know, inequality, the concentration of very large asset managers, and of course, a continuous engagement with government to try and create conducive environment and appropriate policies that can achieve exactly what you've referred to.
I should maybe just close by saying that it is not from the lack of effort by this company and by this board in engaging government. I mean, I can say on a first-hand basis, I and Leila, at times, and many of executive staff, do engage the policy makers and try and arrive at something that is in the long-term interest of the country. But once again, I did refer to the fact that this cannot be the sole prerogative of the JSE in solving all these problems. We, within reason, as the market maker and part regulator, you know, our role in trying to make that, that environment and able to attract more foreign and direct investment.
So, we all wish we could achieve far more, Chris, and, you know, once again, we take the point, and I think you mentioned it last year as well, but I can assure you that there's considerable effort by the board and management to try and achieve that. Leila, I don't know if you-
No, no, thank you.
Okay. Any additional questions? Sorry, is it a follow-up question?
Yes, yes.
Okay.
Yes, please. Well, I take comfort in that, Mr. Chairman, but do you not think that by the JSE and the board constantly downplaying the severity of our delisting crisis, lack of primary capital raising, by, say, for instance, referring to the fact that the, that the market cap is growing, they've lulled policymakers into a false sense of security? That would be the first question that, you know, I'd like you to consider before I vote. You know, isn't it time for the JSE, led by the board, to put its hand up and say, "There's a crisis?
Yeah, I think on the contrary, I wouldn't, you know, accept the point that the JSE downplays the concern of delistings. I think, on the contrary, you know, I'm sure, you know, Leila would attest that the JSE board is always putting enormous tremendous pressure on management to try and find ways in which we can constantly analyze what causes delisting. You know, apart from accepting that this is very much a global trend, which JSE is not unique in that respect. But that's not therefore cause for us not to take the proactive and preemptive action. And we do that by, you know, constantly looking at what can be simplified in listing rules and, and all of that, to try and make it attractive for companies to stay on the stock exchange.
As I've said a little bit earlier, there are endless presentations to the Treasury, to FSCA, to SARB, and all the elements of regulation, to always raise the flag that if you have capital outflows, you've got delistings and so on, the long-term effects are not good. But we don't necessarily believe we should do that by shouting from the top of the mountain. I think we prefer to engage directly. Under circumstances such as this or where the opportunity is appropriate, we do raise this as a, as a challenge.
But when I say it's a challenge, it's a collective challenge for the country, of which the JSE is an important part. So I'm not sure we can say more than that. We can just assure you that we're not, we're not sleeping at the wheel on this particular item.
Well, Mr. Chairman, if I could just respond once more. You know, it's this isn't a global phenomena everywhere. China, India, Indonesia, Sweden, as you pointed out, Tel Aviv, Nasdaq, have got thriving and growing markets. And, you know, I think this is another reason, you know, the JSE, in my view, hides behind this, that this is a global phenomena. It's not. I accept private equity is growing rapidly. Jamie Dimon addressed this in his annual shareholders' letter. I've said to Graeme and Romy, all these things.
I know all these articles. You can ask Romy, I pepper her with stuff. So, you know, I don't know how you can say that this is a global phenomena when you've got markets growing robustly, particularly over that 2021 period. And then now in Asia, ex-Japan, these markets are growing rapidly. Sweden, as you know.
No, I would want to avoid this being a dialogue and between the two of us, Chris, but let me just say, New York Stock Exchange, Australian Stock Exchange, and LSE, many stock exchanges have had delistings. When I say that is a general trend, I'm not saying there are no exceptions. Of course, there are exceptions. I mentioned Sweden as one of those exceptions, and you have mentioned quite a few.
So that is really not our posture to say, because there's a general trend in this direction, we should not be proactive, we should not, you know, do everything possible. And I'm saying we are doing that, but we must also recognize that stock exchanges are, by their very nature, a product of their environment. Some of the countries that you have mentioned are growing at GDP of 5%-6% or even higher.
Our GDP has not been growing at that sort of rates. You got to understand that you need a high tide to lift the boats. That's just the reality. We are working on it, and I think, that's the best that we can address that. Can we move on?
Okay.
Are we back to someone on the floor? Thank you, Chris.
If I could, still addressing resolution one. I'd like to put it to you that having directors with experience in our very large financial institutions, be they ones who serve retail customers, is a bug, not a feature, for the future of this exchange. I say that with the utter respect for the people involved. Those very institutions that the experience was gained from have spent the last 30 years taking your retail, direct retail customers and putting them into mega funds. Which is exactly the problem why we can't attract small and medium companies to this exchange. The large, concentrated financial institutions' dominance of this exchange is a bug, not a feature.
If we are to attract small and medium companies to this exchange, we need to get retail investors back directly into this exchange, away from Investec and Standard Bank, where all that experience was gained. We've got to undo the damage, not repeat it.
Can I respond? Okay, let me, Paul, let me just say this, and I'm not too sure that we necessarily have such a big difference. I think I accept that you need to have a diverse set of skills and input on the board. So the fact that the institutional experience or large institution experience directors on the board is not a negative in my view, because they bring other features, other experiences that are very relevant and very important. Having said that, I fully agree with you that having a wide diversity of experience, where you've got people that have been focused with retail in different respects, not necessarily from the large institutions, is very important. So I accept the point. Yeah. Okay, we're going back out, all right?
Yes, please, Chairman. We've got two questions online from Mkhululi from ESG Insight. I'm going to deal with his questions regarding these resolutions and then leave his, the balance of his questions for the general Q&A at the end.
Okay.
The two questions that are pertinent to this section, he asks about board sustainability expertise. He states, "Although the board lacks members with direct sustainability qualifications, how is the existing sustainability expertise for members utilized to improve ESG compliance, governance, and strategic direction, given the JSE sets the tone for the rest of the market?" And then can I ask the second question? It says, "Non-executive fees. Considering our previous concerns about the high fees for non-executive directors, particularly the, the chairman, what measures are being taken to align fees and remuneration with the company's size and its peers?" Thank you.
Do you wanna take the question on the sustainability first, Leila?
Yes, sure. Thank you, and Suresh might well like to comment on that too. Perhaps, do you want me to start, Suresh, or? Thank you. So, thank you, Mkhululi, for your questions. As you know, sustainability is a key priority for the JSE, and we have been founding members of a number of global institutions. We've led, co-chaired UN and other initiatives, and the board's support in this area is vital. We're very fortunate to have people like Siobhan Cleary, who has deep and good experience in sustainability, having studied a master's in that field and also working in that field. We are also very fortunate to have Suresh Kana, who chairs our sustainability committee.
He has been extensively involved in, for example, the IFRS SASB, Sustainability Global, Disclosure Guidelines and has extensive experience in that field. In addition to that, in South Africa, we focus not exclusively and only on climate finance, but also on the very important social dynamics and leaving no one behind. Faith Khanyile has had extremely good experience and has been the CEO of an organization that has looked at the social inclusivity and gender balance in our markets. And each of these dynamics and dimensions have contributed to our advanced sort of thinking and progress in this field. But perhaps I, if I may, through you, Chair, hand on to Suresh.
Thank you very much, Leila. Yeah, just to add a little bit, I agree completely with what you're saying in terms of the skills of the members that are on the committee, and particularly the Sustainability Committee. Very well, deep, deep, deep expertise in that area. Just at a personal level, I suppose I'm a trustee of the IFRS Foundation, and that's the organization that has set up the ISSB. And in that context, I've been very close to developing and assisting in the development of a global baseline relating to sustainability disclosures.
So I think we, you know, we, as a group, we believe that we have sufficient skills that are needed for the sustainability area. And then it's also, we are supported by management. We've got capable people on the management front that are also good and have deep expertise in the space of sustainability.
Thank you. On the second question, with regards, director's fees, including my fees, I don't think it would be appropriate for me to talk to that. Suffice to say, we've got the company secretary here. Graeme, maybe you can just respond in a few minutes as to how the process is handled.
Chair, thank you. The management team put together a proposal each year, which is taken to the Remuneration Committee. That proposal is reviewed by external advisors of the JSE. The benchmarking is against a peer group, and the JSE draws its non-executive talent from a wide variety of sources. It benchmarks accordingly against that peer group. And we at the Remuneration Committee, and in prior years, the shareholders have endorsed those recommendations. We are bringing to the meeting today a proposal where the proposed fees are about 90% of the median of that particular peer group. So I hope that answers the question for Mr. Mkhululi.
Thank you, Graeme. No more questions? Okay, any more questions from the floor? Okay, I think... We thank you very much for your questions and engagement on, on the resolutions. So we're going to the voting.... I confirm that all the AGM resolutions have been proposed to shareholders. Invite you to submit your votes via the online voting platform, if you haven't already done so. Please click on the Vote Now link, and it will direct you to the voting platform. Please remember that the platform reflects all votes as automatically defaulted to abstain. Please select For or, or Against or Abstain for each resolution. Check your selections carefully, as they cannot be retracted or re-voted once submitted. Once you have made your selection for each resolution, scroll down to the bottom of page and click Submit.
A message will pop up on your screen, confirming that your votes have been received. We will pause briefly at this point, until our scrutineers confirm that all shareholders currently reflected as active on the voting platform have submitted their votes.
Thank you, Mr. Chairman. We will be closing the voting platform very shortly. Those shareholders who may not have voted, kindly complete your vote. Chair, if you could just grant us 30 more seconds, and we will then close the voting.
Thank you.
Thank you, Chair. The voting is now closed, and the results are on your screen.
Okay. Thank you. The results of the voting are now displayed on the screen, and I confirm, that all resolutions have been carried by the requisite majorities, and, we, we thank you for your support. In terms of the JSE Listings Requirements, Section 3.91, detailed results of this meeting will be disclosed on SENS within 2 business days. And, that really says we, we're done with that section, and we can move on to our agenda item number 4. And that is really, you know, our CEO providing us with an update on the business, and then thereafter, we'll take any questions as part of the open Q&A. Okay, Leila.
Thank you. Thank you very much for your remarks and introduction, Mr. Chairman, and I'd like to offer a few general comments about our performance, our strategic vision, and market trends, and after that, we'll take questions from shareholders and guests. I'm pleased to see a number of familiar faces in the room, and also familiar names are joining us online. Thank you very much for your time and for your interest in joining the JSE. It's been a busy year delivering our strategy and innovating to improve our competitiveness and in achieving our financial goals. We delivered a strong set of results in 2023 amid difficult conditions, global uncertainty, and shifting asset allocations by domestic and international investors.
I'm sure many of you attended our results roadshow in March, so I'm going to touch very briefly on some of our key financial highlights that many of you would know. Our headline earnings per share, as you remember, increased by 12.2% year-on-year, and NPAT grew by 11% year-on-year to ZAR 831 million. ROE was up from 17.8 prior year to 19.4% in 2023, and cash generated from operations increased by 13.6% year-on-year to ZAR 1.1 billion. The business remains well-capitalized. Our regulatory capital and our investor protection funds amount to ZAR 1.47 billion. These funds are ring-fenced and held as non-distributable reserves in accordance with the Prudential Authority requirements.
Our remaining cash on hand is devoted, obviously, to working capital requirements and, of course, to pay the annual dividend. These strong results can be attributed to a very deliberate effort by management and the board to diversify our business segments and asset classes across the exchange, and this has helped us to overcome lower trading activity in 2023. You'll no doubt have seen the published data showing our equity market value traded last year being down 9.5%, for the full year of 2023. For those of you who have been with us for a while, will be familiar with the evolution of our strategy, which in the last five years has focused very pointedly on diversifying and fortifying our revenue streams while delivering a competitive proposition to the market.
Nontrading revenue last year accounted at the end of the year for 36.8%, almost ZAR 1 billion, ZAR 944.54 million, of the JSE's overall operational revenue, up from 29% in 2019. And this was driven by largely a 15.6% increase in our Information Services Business, and a remarkable 20.2% increase in the JSE Investor Services, which is a business that we acquired in 2021. As a licensed market infrastructure, we are mandated to provide robust and resilient trading, clearing, and settlement platforms for market participants, and we are particularly pleased with our resilience and our market uptime of nearly 100% through the year of 2023, despite a number of market-moving and highly volatile events.
This is testimony, really, to the investments that we've made over time in technology, processes, and, of course, people. 2023 was also a year of significant innovation to ensure that we continue to provide a compelling set of trading and nontrading services that drive revenue growth. We introduced a number of innovations, including, firstly, partnering with Amazon or collaborating with Amazon Web Services to modernize our BDA technology using computing infrastructure and AI to deliver innovative market solutions and improve our operational efficiencies. JSE Clear announcing the acceptance of securities collateral, which is a first for the South African market, to meet initial margin requirements. This initiative relieves the liquidity strains amid mounting global and sovereign risk. Upgrading the STT, or Securities Trading Technology platform, ahead of schedule and under budget.
As part of our cloud-centric strategy, we transferred all crucial equity and bond data to a cloud data lake, and we launched big xyt ecosystems, which is a cutting-edge analytics-as-a-service to global exchanges. In addition, Colo 2.0 was launched in 2023, and this is our new colocation service, which is designed to reduce data center costs for our market participants. Finally, we also collaborated with Xpansiv to develop voluntary carbon market to boost South Africa's carbon credit capabilities, and this sustainability initiative will enable local participants to buy and sell carbon credits and renewable energy certificates, or RECs, which are either held in local or global registries.
The value of these collaborations enable us to rapidly innovate in data services, private markets, carbon trading, and these will all support and underpin the modernization of our broker-dealer accounting system. This will ensure that we maintain a leading position among emerging market exchange operators. I'd also like to draw our attention to our sustainability segment, which saw a material increase of 17% in the number of sustainability bonds listed. There was also a 91% increase in actively managed certificates, resulting in the inclusion of 12 new bonds and 23 new actively managed certificates in just one year. Public markets, as we've heard from some of the questions, continue to experience headwinds, and for this reason, we've offered alternative capital raising and alternative capital raising platform through JSE Private Placements.
This platform is in collaboration with Globacap, a U.K.-based fintech in which the JSE has an equity stake. During 2023, JPP mobilized ZAR 20 billion in investor capital through what was then 41 and is now 44 onboarded deals. Although it's still a new venture, the initial traction and number of new companies seeking to raise capital demonstrates the growing importance of JPP as an alternative venue for capital raising.... As regards our strategy, our ongoing commitment to create an enabling environment for listed companies will be our focus for the continuing future, and particularly with regards to the proposed amendments to our listings requirements. These changes in the year ahead take two forms: firstly, a simplification project, which aims to rewrite and simplify the existing listings requirements.
We've made significant progress in this project, and almost half of the Listings Requirements have been rewritten and published for public comment. Secondly, a market segmentation project, which will result in the repositioning of the JSE's board into two separate segments. The proposed segmentation of the Main Board into the Prime and the General segments aims to provide an effective and appropriate level of regulation, which is based on the size and liquidity of Main Board companies, while maintaining investor confidence in the market. Turning my attention now just very briefly to our markets in the year to date. The South African markets have largely trended sideways, and in some areas, contracted year to date, as investors look for direction on the future of interest rates, and with it, global aggregate demand.
Globally, attention has largely been on tech stocks, which have driven international indices. More recently, the proposed merger of BHP and Anglo American has been driving our local volatility on the bourse. The FTSE/JSE All Share Index is moderately flat, moderately. The Top 40 is moderately up, and the All Share is moderately down, compared to the S&P market, which is up 9%, and the MSCI Emerging Market Index, which is up just less than 4%. Trade activity in the equity market is tracking behind last year. The recent corporate action and a number of other items have led to a spike over the last six weeks in volumes. The unprecedented range of global political events could have material consequences for the economic outlook and for trading volumes.
Locally, the rand has traded slightly weaker in the year to date, after a 9% fall last year, and our own political process will be keenly watched by investors for the rest of the month. On IPOs, we are anticipating a moderate improvement in the number of listings, and we were pleased to welcome WeBuyCars to the Main Board last month. And we anticipate several more new listings, which are in the public domain, in the year ahead. In conclusion, we are very pleased to have delivered value to our shareholders in 2023, and we are resolutely focused on implementing our strategy and driving competitiveness to enable us in doing so. The JSE provides a compelling value proposition as a low-risk trading environment with an outstanding operating performance that is continuing to innovate.
We will deliver on our planned investment strategy that will improve our service offering and reduce costs. This will enable us to continue to deliver high quality earnings and long-term value to our shareholders. And with that, I would like to open the floor to questions. Please, raise your hands or pop a question in the chat box, and, Romy, we'll be guided by you.
We have some hands raised, online in the chat. I don't know if we wanna start there or start with the floor. Chairman, what would you like to do?
I think let's start with the floor.
Sure. Paul?
This is a question that relates to the ecosystem, and here, I don't necessarily mean asset managers. I mean, everyone else who makes a living off the JSE but doesn't work for the JSE. So we now know that more than 60% of the gross market cap of the JSE is actually foreign individually listed companies, and they buy all their ecosystem services, be they investor relations, investment banking services, advisory. All those services they buy in their home markets, they don't buy them here. That leaves our ecosystem to sustain itself on just 60-40% of the gross market cap, but also on a market where there's half as many companies as there were 20 years ago.
So that ecosystem is under significant pressure, and where it really told for me was when I attended a listing meeting for a company proposed-preparing to list on the JSE, and I was the youngest person in the room. Okay, now, that is terrifying, because I'm sure in your own corporate finance career, Mr. Chairman, it was a young person's game. Now the people with those skills are holding onto their seats, and they're aging out. What does the JSE do to monitor the health of the ecosystem that sustains the JSE? Don't we have a big problem coming down the line that there will be nobody to handle the next listings boom?
... Shall we take a couple of questions, and then, and then we'll answer a few at a time?
Depends on how long the questions are.
Mm-hmm. Yeah, maybe one more.
Okay. All right. Please, please go ahead. Can I ask a question? You're a cash-rich company. Is it possible that the board would consider the introduction of an interim dividend as well as the final dividend? The, the profits that we receive as shareholders all paid out as one lump sum at the end of the financial year. Wouldn't it be an idea to, let's say, a third to 40% of the distributable income to be paid out by way of an interim dividend as well? I think it will attract a lot of interest to the shares that's rather than bunched up at February, March time, where one dividend is paid.
Great. So maybe, shall I deal with-
Yeah
... Paul's question? I'm not sure if we want to get Fawzia, or if you'd like to deal with the-
I think Fawzia will deal with the second one.
Great. Thank you. So, Paul, thank you for your question, and I know this is something that you do spend a lot of time thinking about. Our market has waxed and waned over, you know, over 130 years, as you heard earlier, 137, in fact. Over the past 30 years, we have seen a level of cyclicality. In fact, in the 1990s, on average, over that 10 years, we saw 58 delistings per year. In the 2000s, we averaged 47 delistings, and over the last sort of 14 years, we've averaged 21 delistings. So while the number of delistings is large, and I hear your point on the point that was made earlier about market cap.
Ultimately, the quality of the market is driven to an extent by value traded and market cap. That's not to say that the number of delistings is not something that we are concerned about and think about every day. We do have the beginning of a cautiously optimistic potential shift in the market, from what was an environment cyclically, that was cheaper to raise debt than equity over the last sort of 10 years with the low interest rate environment. And we are starting to see that in the number of listings that we're seeing. What are we doing to try to enhance, grow and develop the market ecosystem broadly? There are a number of initiatives.
On the listings side, we've spoken at length about the listings reforms, a plethora of reforms that were introduced a year ago, and I've just spoken about those that are changing now. We've introduced a private placement market with more than 44 listings, double the average number of delistings per year over the last 10 years. In addition to that, we are working with the ecosystem to try and drive down the cost of execution, and this will encourage a more inclusive environment, also potentially encourage the retail participation rate. We've offered a new co-location service, which will reduce data costs for our market participants. We've introduced new solutions for market participants to access data about the market in a more malleable and easy to operate function.
We've introduced securities collateral, which will reduce the ultimate cost of transacting because it reduces the cost of funds. We've also recently introduced a very transformational project in collaboration with AWS to reduce our BDA costs to the market. So overall, we are very mindful of the economic backdrop in which we operate. There are headwinds, and we have experienced headwinds for a number of years now in the macroeconomic context. But ultimately, we are focusing on the controllables. We're focusing on those elements that can either crowd in involvement from market participants or reduce the costs to trade. We've also done a number of things to try to encourage inbound trading. And we are starting to see green shoots.
We have had a number of market participants signing up very recently, and that is having an effect on our trading volumes. We can see direct impact. So I think, it's, you know, I acknowledge that, you know, we are in a constrained and a complex and challenging macroeconomic environment, and we're really just focusing in on those things that we can control. Maybe I'll hand to-
Fawzia, want to speak about the dividend and interim dividend?
Thank you, Chair, and thank you, Paul, for the question. I guess in terms of declaring a final dividend rather than an interim dividend, what that provides us with is that we do that based on audited financial statements. So it gives us a much clearer picture of the financial performance of the company and the year going forward. Now, while I fully understand the benefits of paying an interim dividend from a shareholder perspective, I think in the type of business that we have, the
... There's a number of factors that would determine the cash that's available. There's some that we can control, particularly on the expense line and potential CapEx expenditure, et cetera. But revenue and, and revenue in these markets in particular, is not always that easy to ascertain. For example, if we look at the year ahead, with elections coming up and, and all of the other issues at play as well, it would be difficult for us to say exactly where we think ADV would land and where our earnings would land.
So while it's something that we would continue to consider, I think we would have to be in a space where earnings was a lot clearer, and the financial prospects of the company were a lot clearer as it relates specifically to trading income. It is something that we would continue to consider as we think about capital allocation on a go-forward basis.
Okay.
Chairman, we have three hands raised online. I'll start with the first person. Poloko Kompe has got his hand raised. Go ahead and unmute yourself, Poloko. Poloko, go ahead and raise your question. You are unmuted. Okay, maybe we're having some technical difficulties. We've got a second hand raised, Greer Blizzard from Just Share. Greer, go ahead and ask your question.
Good afternoon, Chair. Can you hear me?
Yes, we can hear you.
Thank you. Good afternoon, Chair. My name is Greer from Just Share. I have two questions. We are very pleased to see that the JSE has conducted a survey of issuers to understand how the Sustainability and Climate Change Disclosure guidance is being used. We are aware that you'll be looking into updating both sets of disclosure guidance. And, I want to quote, "incorporate relevant requirements from IFRS S1 and IFRS S2." My question is: Do you plan to do more monitoring and oversight of the extent to which issuers are reporting in terms of the then updated disclosure guidance? And my second question, if I can go ahead now, or would you like me to ask it just now?
Yeah, ask the question.
Thank you.
Uh-huh.
The second question is, we have observed at Just Share that there are many companies which have gender and race diversity policies but lack clear transformation targets. The JSE Listings Requirements mandate issuers to have these policies and to set targets, and I quote, "if applicable." However, the phrase, if applicable, introduces ambiguity, which companies appear to be taking advantage of to avoid adopting clear targets. It is very difficult to track the progress of this in the absence of targets. Can you please explain which circumstances setting targets is and is not applicable?
And would the JSE consider issuing a guidance to clarify that targets should be included in diversity policies? This is particularly important in relation to female representation on boards, which is still significantly lower than the proportion of women in the population who are economically active. Thank you.
Thank you very much. Suresh, would you be able to handle the first question? And then, André, you'll talk about the loophole that you've left, so.
Okay. Thank you very much for that question. I suppose it's, you know, the guidance that was issued, I suppose, was in November 2022, and since then, we've been doing a lot of activity in terms of raising awareness, et cetera, and monitoring what's happening. I think if you just look at the number of hits we've had on the website in this regard, it exceeds 1,500. I think so that's clear that there's a lot of interest. I think we, as you also mentioned, that we are updating that guidance. That will be coming out in this towards the end of June. And I think this is, as we all know, the whole area of sustainability is an evolving space, and we've got to continue monitoring.
So we will continue to monitor until there's a legislative framework which becomes a lot more clearer as to what we should do. But in the interim, we will continue awareness, we will continue the education programs that we're running and keep monitoring developments and see what changes need to be made.
Okay. Thank you.
Thank you, Chair. Thank you, Greer, for the question. Just to clarify, and I don't want to bore the AGM with the technical interpretation of the Listings Requirements, but the intention of the requirements is to have targets on a voluntary basis. So companies have the option to determine whether they want to set targets. Once they set the targets, they then have an obligation to report against those targets. That's the current framework that we have in the Listings Requirements. I can just stipulate that King, as a recommended practice, that companies should set targets, but that's obviously recommended practice only. I think a similar question was asked last year as to whether the JSE is contemplating setting targets through the Listings Requirements, and I think that position remains unchanged at this point in time.
It is an area that we continue to monitor. If you look at some of the data that's been published by the Sustainable Stock Exchange Initiative, I think there's two important data points in that, in that document. The one is some stats on the JSE relative to G20 economies. And the JSE, from a female representation, certainly is above the average. I think it's an important benchmark that we monitor to see whether further intervention is required. And I think a 2023 publication indicated that from an African perspective, the JSE is certainly at the top of the ladder. Having said that, it is an area that we continuously monitor. We still believe that this is something that should be catered for in legislation as opposed to Listings Requirements.
But we continuously monitor that, and I think our project on market segmentation may open up opportunities for us to look at things in a bit more detail. But at this stage, no, not on the agenda to look at setting targets through the Listings Requirements, given our other competing interests at projects at this stage. Thank you, Chair.
Thank you. Thanks, André.
We've got two raised hands. Poloko Kompe, go ahead and ask your question.
I hope you can hear me.
We can hear you.
Thank you, Chair, and good afternoon. My name's Poloko from Just Share. The JSE reports that its lowest grade total guaranteed pay decreased from ZAR 419,000 to ZAR 387,000 in the 2023 financial year. Could the chair of the RemCo provide insight into the reasons behind this decline in the lowest grade total guaranteed pay? And also, could you please tell us which roles the lowest grade total guaranteed pay applies to? Thank you. That's all.
Faith? Mm-hmm.
Thanks. Thanks. Thanks very much, Faith. So, so the shift, you would be aware that we have acquired a number of businesses, and the nature of those businesses is different to the nature of the staff complement that we had before. And so this is what would've shifted the average per head salary. I think in terms of the lowest paid, we might have to just get back to you. I don't have those figures, Graeme, unless we have them on hand.
But the key reason for the shift would be the acquisition of both the share plans business, most recently, and previously, the Link Market Services business, where you've got a number of large call center agents and operations staff. And the nature of their work and the level of that work is quite different to that of the actual, you know, the general JSE staff.
Okay.
Graeme, can you?
Chair, thank you, but that, that's a correct answer. All the-
Do you have the lowest paid number?
The lowest paid is in the lowest professional class of staff, and it should be indicated it comes from other parts of the business. There is an indication in the report-
Let me check in the report.
... where our more junior, non-skilled staff are below that level, but we benchmark against our professional staff, as you indicated.
Yeah.
Chairman, we have another hand raised. Chris Logan, go ahead and ask your question.
Yes. Hi, Mr. Chairman. Thanks again. I was very excited to read in your integrated annual report that Hong Kong had been approved as a secondary listing venue. And I was ecstatic when your IR told me that the JSE had already met with Tencent. Of course, what I'm really looking forward to is when Tencent will be listed on the JSE, and followed up by some other big Hong Kong heavyweights, like Alibaba and JD.com. So perhaps you could just fill us in about any potential progress with Tencent, because it seems natural to me that it does have a secondary listing on the JSE being, you know, significantly controlled or influenced by Naspers. That's the first question. Do you want me to-
Uh, ask, uh-
I've got another one.
Yes, please go ahead.
Then just, you know, reading, I don't know if you read JPMorgan's shareholder letter. Jamie Dimon, he goes into, you know, this whole thing about staying competitive and shrinking public markets, where he sets out that in the US, public companies have shrunk relative to the tremendous growth in companies founded by private equity. And, you know, he lays bare that part of the reason is the increasing onerous regulations and bureaucracy imposed on public companies, public being listed. How does the JSE weigh that necessary balance so that, you know, we don't get more and more companies not listing or leaving the listings environment because there are so many formalistic, bureaucratic requirements? Thank you, and I hope I wasn't too hard on you guys in the beginning.
No, we've become accustomed to it, Chris. But having said that, André, do you want to respond, please?
Thank you, Chair. Thanks for that question, Chris. So I think Leila spoke about some of the initiatives that we're dealing with in terms of cutting red tape. I think we've been quite deliberate since 2021, starting with our Cutting Red Tape project, where we made significant amendments to the requirements to make it easier for companies, specifically the smaller ones, listed on the JSE. That was followed by the simplification project. And just to give you some indication there, Chris, the current Listings Requirements span across approximately 800 pages. If you look at the 10 out of the 19 sections that are out in the public domain at the moment, those sections have been cut down anything between 35%-65% in terms of volume.
So I think making requirements easier while maintaining appropriate investor standards is critical for us. But we do think we're in a world where we can make things easier for companies and make it easier for them to apply the requirements. And I think that, coupled with the most recent market segmentation project, where we've been very deliberate to make it easier for companies on the Main Board, we think those initiatives will go a long way in stemming that tide.
Mm-hmm.
Thank you, Chair.
Okay. Where is Tencent listing on the JSE?
So, Chris, thank you for your question. Of course, we cooperate and collaborate with all market participants to encourage inbound listings. The JSE is an infrastructure provider, so we're not an advisor, and we wouldn't be directly involved in any enablement of any actual listing. That said, we do partner with our capital markets teams in the investment banks. We indeed have met with Tencent, and indeed, there would be an interesting arb trade that could occur between listed entities and cross-held entities with Tencent. That said, you know, we obviously can't comment any further on where that might go.
Like any other country that we, we might have fast-track listing agreement with, we would encourage any form of dual listings. But at this point, we really just work through our market participants. But we would love to see Tencent listed on the JSE.
Okay. Thank you. All right, are we done online?
We have a couple more questions from Mkhululi, from ESG Insight, SA. Can I deal two at a time?
Mm-hmm. Yep.
Or would you like to close with the floor?
Okay. All right, let's get those, and then we're gonna close with the floor.
Okay.
Okay.
He asked about emission reduction. He said: We raised the same question at the last AGM, and explanation was given due to the increased use of generators and plans for roof, rooftop solar. This year's disclosure indicates a notable increase, again, in emissions, particularly in Scope 1 and air travel. What specific steps is the JSE taking to mitigate these emissions, and how do you plan to align with South Africa's renewable energy goals while addressing the overreliance on diesel generation? Then question two is around future technology, oversight and investment.
The annual report purports that the increased costs were due to strategic initiatives. However, a closer look indicates an increase in remuneration costs. Headcount did not change much. What is the JSE's focus and an investment into AI technology that can help decrease some of these costs and also make some of its technology offerings more attractive?
Shall we start with Suresh?
Thanks very much for the question. The first one is just in terms of energy consumption. I suppose electricity and load shedding has continued to have a big impact on us in the current year. And that's why, I mean, you look at diesel generators, there's been a big, big increase in that space. I think the other areas are pretty much in line. I think travel may have increased a little, but, I mean, that's in an international world where you're trying to get international investors in. You do a lot of road shows and that overseas. But other than that, I think we, you know, we've got a good plan. I think we are working on our net reduction targets. We'll be working on that this year and publish our net reduction targets to 2025.
Okay. Technology costs, taking, you know, reduction that... Fawzia, are you gonna take the question or-
And then I'll jump in on-
Okay. Mm-hmm
... AI. Take the first part of the question.
Mm-hmm.
Thank you. So, thank you for the question. Just in terms of, where we're spending our money, so whilst we talk about the investment in growth initiatives overall, I think it's important to understand that that spend would come through in a number of different line items in our P&L. And certainly, one of those items that would be impacted would be salaries. So we need to employ the right people in order to deliver on our growth initiatives.
And as we go along, we do find that it is, in many instances, a little bit more expensive to hire the right people, in order that we continue to deliver on our growth initiatives. So it's probably not only, the technology line item that you'll see those growth initiatives come through. You'll see it in salaries and in one or two other line items as well. Thank you.
Thank you. AI?
Yep. Thanks, thanks, Fawzia. So just to add to that, in terms of the investment into AI, there is obviously a focus on selected strategic hires that would be required to start to build out our AI capacity or continue to build out our AI capacity. And then, there is also a project-focused cost, which is using AI quite extensively. And that is the rebuild of the BDA system that is going to be using AI to translate COBOL code into Java code. In addition to that, we are building foundational elements in our data lake, in our market services business, which will, in the future, enable AI-based products to be overlaid onto that through our JSE Marketplace.
We most recently launched a beta product, or the beginning of our marketplace, and this is—these are really foundational elements for artificial intelligence. There are a number of other areas that we will continue to invest in. We have done an initial investment into a social listening tool in our regulatory space. There's still a lot of work to be done in that space. And, of course, enabling artificial intelligence or algorithmic-type trading through top quality, high speed, low latency trading capability is, of course, forefront for us. So we taking a holistic approach to AI. We see it as a very integral part of the future, and we'll continue to invest both in the direct tech and also strategically into specific staff.
Tebalo, our Chief Information Officer, has a program to upskill and really begin to develop the skills in that space, including cloud and AI. These are all sort of ecosystem supporting skills within his team.
Thank you.
Chairman, we've got 3 more remaining questions on live.
Shall we make those the last three?
The last two are from Mkhululi, and then there's one from Michael Avery. I will start with Mkhululi's. Leila, you just touched on it. It's the legacy system modernization. What is the anticipated timeline and the project impact of the BDA modernization? That's the first question. And the second one is: given 30 years since 1994, does the JSE believe its efforts to enhance inclusivity and accessibility to previously disadvantaged investors, man-in-the-street retail investors, has that been successful, and what metrics does it use to measure this? And then the last question from Michael Avery: We know that the JSE is doing what it can in revising its listing rules, but there is absolutely no indication of a policy response from either National Treasury or the FSCA to what is clearly an existential threat to SA's public market ecosystem.
Has the JSE lost the support of the policymakers, or have they been unable to communicate the severity of the situation? What evidence can you share of engagements with the policymakers to this effect? And that is all online. Thank you.
Okay, so, the first one was on retail and what we've done over the 30 years to get retail investors. The second question was on Listings Requirements and whether we're winning against the policymakers. I didn't hear the third question.
Legacy system timeline, BDA.
Okay, BDA. Okay. All right. Retailers, Leila, should you take that?
Yep.
And then maybe listings, we go back to-
Yeah.
André.
I'll do BDA and-
Okay.
Retail, if you'd like.
We'll do that too.
Okay. So on the legacy system timeline, we did announce that we have begun our journey with AWS. The project is going well so far, but very early days. The intention is to do a proof of concept first. We need to establish the complexity and improve the forecasting accuracy of how long the project is gonna take, and in order to do that, we need to delve into the code and run a couple of scenarios first. So as soon as we have a clearer view on the time horizon, we will report back to market. We don't expect this to be a five-year project. It's, you know, it will take us some time, but we'll come back as soon as we can.
In terms of inclusivity efforts, there are a number of projects that we have underway to crowd in and ensure that we include the man in the street, the retail investor. The first project, which I think has been a tremendous success, is our JSE Schools Challenge, and this is really under the heading of financial literacy. We have in excess of 20 or probably 22-23 thousand students, both from school and high school and universities, participating per annum in a trading game. Two years ago, for the first time, some of those children had used derivatives and single stock futures in their simulated portfolio investment, and it's been tremendously uplifting to watch how much has happened in that space.
In addition to that, we run a female investor conference called She Invests, with tremendous participation. It's always oversubscribed. And in addition to that, we are running as part of our JSE Investor Services, a share reunification program. We intend to use that program to educate and to improve financial literacy. That program is really designed to connect shareholders with their dividends. We have ZAR 4.5 billion worth of unclaimed dividends in the country. Many of those recipients are BEE recipients, and they're... We are working with issuers across the country, it's a nationwide campaign, to begin to reunite shareholders with their dividends and to use that as an opportunity to educate, and improve financial literacy. Those are the projects under our financial literacy.
We, of course, are also looking at access, and we are working with market participants. Many of our market participants have online share trading solutions, which are extremely effective. We are also working with market specialists to provide what we call stock picks or views on research, views on single name stocks. One of the key problems in the country is that we have a contraction in the number of analysts that cover stocks and provide an overview of the investability of those stocks. We have over sort of 15-20,000 hits for most or many of those sessions that we hold, and those are all available on YouTube historically for investors, retail investors to access.
So I think a lot is happening, but, Mkhululi, I would like to say that much more needs to be done, and we are working with market participants. We have a committee, where we are trying to drive, inclusivity and involvement, by the participants. I'll hand over to André to talk to Michael's question on policymaker interaction.
Thank you, Leila. I-- I'm gonna be cautious with my response, because FSCA, as a public sector regulator, has to give final approval to any rule changes, so I wouldn't want to preempt the outcome of that. What I will say is, from a listings perspective, we have regular engagement with the FSCA, at the most senior level. I mean, our chairman and our CEO is involved in those interactions. And the same applies on the, on the FSCA side. I can only say that we, we're having regular, constructive engagements with the FSCA to assist us in getting the appropriate changes to the Listings Requirements implemented.
Having said that, there is a significant amount of work on the agenda, specifically over the next 12-18 months. So we're not underestimating that, but there are no indications that we don't have the support of the FSCA in the macro issues that we are considering. Thank you, Chair.
Thank you very much. Can we come back to the floor, take a question from Paul, and then one more question, and then I think we would have... You know, it's been a comprehensive engagement. Thank you.
I really have two questions.
Okay.
They've both been touched on already, but I think I'd like more clarity. Firstly, I know it doesn't matter how many actual companies are listed on the stock exchange, and delistings versus listings is a little bit of a red herring. The issue is whether you can... You're always going to regard value and volume traded as being the most important thing, but if you cannot raise primary capital, you cannot list, and if you cannot get a good price for your shares, you're going to delist. My concern is, is that the JSE, at a strategic level, is supported by an ecosystem. You don't solicit people to come and list.
Your market participants do. But at a strategic level, do you pay any attention to the health of the ecosystem that sustains you? Because I can tell you, as someone who's out there, they are aging out. People, last year, nobody would have earned a bonus as an equity capital market specialist raising primary capital, because there wasn't any. So they, you... The people that sustain you out there, who go and chase down the deals, there are fewer and fewer of them. The international investment banks are pulling out.
That's my question: Do you pay attention at a strategic level to what's happening to the ecosystem around you? And then the second one is this policy response thing, because I don't think it's been addressed. The trend on certain other exchanges is that there's a pullback of companies from the listing.
It doesn't matter whether it's global or whether it's certain exchanges. I accept that there is a trend. But the countervailing trend in all those markets is that there's been a response from those countries' policymakers, whether it's investigations, proposals, it's debated in parliaments. Prime ministers go out to try and persuade people to list on one market rather than the other. The point is, there has been absolutely no public policy response other than National Treasury saying that there's nothing to see here. So then the question is: Have we failed to persuade them that there's a problem, or have you lost their support? That's the second question, and neither of those two points have been addressed.
You want to start?
Well, do you want to make any comments or?
Sure. I think, you know, Paul, on the ecosystem, absolutely. There's pain points in, an environment, whether it is on the, capital raise side or whether it is on the brokerage side, whether it's on the secondary market trading, whether it's the conduit. We do try and work closely with the ecosystem, but as we've said, there's a lot out of our control in terms of, fostering growth in the segment. And you're right, internationals have pulled out for many more reasons than the JSE, has in control. You know, risk appetite for just emerging markets and et cetera. What we do try and hone in, is South Africa still has a very strong on-the-ground presence, and we are bearing through the cycle. So where we can work with the ecosystem, we prioritize that.
Where we can do direct initiatives that we can change in our listing environment, in our trade execution and market quality, we take that with the serious and the most utmost importance. Saving the ecosystem is also in the interest of the JSE because it is... You know, we depend on each other. It's a bilateral agreement in terms of how we sell. We've recently done a roadshow. We had strong SA brokerage presence, which helps our sales and our growth of our marketplace. So we are very aware of the ecosystem pressures. Like I had mentioned, there's many initiatives we do to make our product offering strong for the clients to sell and to work with. We lean in strongly on policy advocacy and trying to make public sector especially aware of the issues.
And then we are trying to, in the immediacy of the cyclical challenges we face, try and lower fixed costs, try and increase access, try and reframe our listing environment to make our exchange attractive, so the ecosystem can, you know, go out and have a livelihood. It is tough markets. Initiatives that we do to grow, for example, we've just signed a Saudi MoU. We're also looking, if the macro of SA is not enabling, how can we spread our wings as an exchange for this ecosystem to also, you know, go out and have a sales force that can actually generate revenue, have viable business options, look at strategic partnerships in the ambit that we cannot change South Africa overnight?
So all of these we are cognizant of and are trying on various facets of the core exchange business proposition to work with the ecosystem, to say, what more can we do to understand the viability, not just the ecosystem, but also our, our own operations. Mm-hmm.
Mm-hmm. Well, then maybe you want to just talk about the engagement with the policymakers, things like SA Tomorrow and so on.
Yeah.
I mean, the point is taken, but I think it's-
Yeah.
Yeah.
So maybe we can look at it in two facets. One is, as Fawzia mentioned, it's all these roadshows with policymakers to try and put South Africa as an investment destination. It'll mobilize the whole ecosystem. So we do that once, sometimes twice a year in chosen regions. Last year we did Asia and New York. This year we will do New York and London. And go with the private and public sector alignment, only on the ambit to get interest into South Africa, have a strong value proposition, and put confidence in investors that say, "Hey, look at us. Even though we're low on growth, we have a direction that is aligned from both public and private sector." The second order of this is the advocacy we do.
Exchange control reforms, leaning in on things like the BEE, mining shares and, you know, on the, free flow shares that we are trying to advocate on. Leaning in on tax incentives and policies. Many, many initiatives that we take to treasury. And on the third level that we've gone, we've gone one step further to try and work on the SOE rehabilitation in merits that we can work on. Are there pipelines to listing? Are there increased governance frameworks? Are there channels to showcase some of the SOE rehabilitation, which will again, bode well on the macro and investor confidence? So those are actually three tangible items that we're doing right now, but it is a whole year initiative. It is lots of bilateral meetings. It is lots of bilateral engagements with public sector, private sector investors, and advisors.
So, it's very tangible, very deliberate, and very focused, and, and we're really trying to lead top-down, change the macro, change the policy, and make sure the JSE is an enabling environment for capital raise and secondary market liquidity.
Mm-hmm. Thank you. Thanks, Valdene. Look, I think that brings it to an end, and thank you very much for your most succinct and very incisive questions. I think it's given us a lot to reflect on. I think when we respond, we're trying to genuinely say what we're doing, but we take note of these points and, you know, continue to work on them. This really brings us to the conclusion of the AGM. Once again, I'd like to thank those shareholders present here in person today. I know it's not always easy to come to these meetings, so we appreciate your presence, and of course, all the online participants. I trust the AGM has been a meaningful engagement with the board and executive.
It does seem that, this hybrid format does give us a lot of participation, and it seems to have been become more and more the norm. It also provides the transparency and opportunity for engagement, and accessibility, you know, which hopefully you would agree is a, is, a reflection of good governance. And, as I say, thanks for the questions. I would also like to take the opportunity to, to thank my fellow directors, for their support and, very wise counsel during the past year. Later this month, we will have the opportunity and responsibility to attend another meeting of shareholders as we gather to cast our votes in the national elections. I don't know who the scrutinizer, whether it's gonna be IEC or this one.
As stakeholders in this great country, we have the obligation to use our vote wisely to help shape a more prosperous future. We are all aware of the difficult and deep-seated economic hardships, some of which have been raised here as part of the macro that we all have to deal with, but try and do the best that we can under those circumstances. Of course, including the social inequalities, inequities that South Africa faces. That does affect things like, you know, how many retail investors you have and so on. These are all the matters that we are all gonna continue to work on. We hope that, you know, we'll have the individual and collective strength to really face all these challenges. Thank you very much, and I'd like to declare the meeting closed. Thank you.