Good afternoon, everybody, and welcome to the JSE 's First Half 2025 Financial Results Presentation. I'll start with an overview before taking you through the group performance, and Fawzia Suliman, our CFO, will then provide a detailed breakdown of our financial results. After that, I'll share some insights and updates into the progress that we've made on our strategic priorities, which we outlined earlier this year. We will open up for Q and A. Starting with slide four, the JSE delivered healthy earnings growth in the first half, with NPAT up 13.2% year on year, translating into headline earnings per share of $6.87. This reflects the strength of our diversified model and our ability to deliver through different phases of the cycle.
Equity market activity was elevated, and we saw steady growth across most of our core segments, with the JSE delivering positive operating leverage of 3.9% for the first half of the year. Notably, 36% of operating income is now sourced from non-trading sources, which helps buffer performance in periods of lower equity market activity, including other income. Our total income increased 10.3%. In this period, we saw solid growth from information services, while JIS was down year on year due to a higher base and lower margin income. It's worth noting that we do not expect non-trading income to grow in a straight line, but we do anticipate continued steady growth over the midterm. Operating expenses increased 7.5% year on year, with 1.6% of that increase attributable to elevated trading-related costs. The like-for-like 5.9% increase in costs reflects our continued investment in our people, technology, and infrastructure.
Overall, our EBIT margin improved to 37%, up from 35.4% last year. Cash generation, a core characteristic of our business, remains strong. We generated $518 million in net cash during the period, and we continue to manage a balance sheet that allows us to fund both growth and shareholder returns. At the same time, our systems remain resilient, with 99.94% market availability across the period, ensuring market participants can continue to rely on uninterrupted access and operational stability. Needless to say, this remains a core priority. We also made tangible progress on our strategic agenda, particularly around infrastructure and technological modernization. This includes the foundational work in information services, beyond the BDA modernization milestones, which are, by the way, tracking ahead of plan, and scaling initiatives like Colo 2.0 and the JSE Fix Hub.
Turning now to the market backdrop, our global equity indices all landed in positive territory at the end of June, following steep declines in April, driven by market uncertainty caused by U.S. tariffs, with the 90-day pause subsequently providing relief. Meanwhile, other key themes driving global trading activity include USD depreciation, portfolio rebalancing, relating or translating into the capital rotation into emerging markets, which was further driven by policy uncertainty and various macro and geopolitical factors. Locally, the establishment of the GNU marked a point of inflection for asset counters. The JSE share price increased by 55% since the beginning of May 2024, outperforming all global equity indices, and the all share hit record highs, outperforming global indices. Of course, these are both all for low base. The performance of the JSE was even more pronounced if you measure the total returns in USD terms.
With the JSE stock up 76% in that period, this made us one of the best-performing emerging market exchanges. Overall, market performance was primarily driven by the extended rally in commodity prices, optimism around the lower inflation target, and, as mentioned, the establishment of the Government of National Unity. Increased market volatility translated into ADV, or average daily value traded growth, of 40% and 20% in quarter one and quarter two, respectively, and both, again, all for low bases. Published ADV for the first half of 2025 was up 28% to $26.8 billion, and that's from $20.89 billion in the prior half of the year. Meanwhile, South Africa's weighting in the FTSE Emerging Market Index increased from 3.16% at the end of December 2024 to 3.57% at the end of June 2025.
Moving now to slide six, which displays the trajectory of our operating income, equity market ADV growth, and, of course, our non-trading income. Over the past five years, non-trading income has grown at a compound annual rate of 11%, delivering 70% nominal growth over the period. This year, elevated equity trading activity supported a 12% increase in operating income, while non-trading income grew by 1%. The subdued growth in the non-trading income was mainly attributable to the higher base in JIS, and we expect a more normalized performance in the second half. Non-trading income now represents more than a third of our operating income, and it remains a key part of our business model, including market data fees, margin income, colocation, and listing activity. This structural diversity gives us resilience across the market cycles.
Moving on now, from a strategic progress perspective, we continue to prioritize operational excellence and resilience, and this is reflected in our market availability stats over the years. Further to this, we are modernizing our infrastructure, delivering new products, and building capabilities for the long term. I want to reiterate one point here. What we are talking about here is not just a system upgrade. It's a fundamental shift in our technology stack, creating a cloud-native foundation for client-centric innovation across the value chain. Our BDA modernization project is progressing very well. We are close to completing the pilot phase, and we'll soon begin full-scale code migration and testing. This, as you all know, is a multi-year program, but we are ahead of schedule, and I'll briefly walk through the project plan on the next slide.
On the product side, we are focused on expanding and enhancing our core products in order to support our clients. JSE Fix Hub and Colo 2.0 are key examples of how we are innovating in market infrastructure. We also implemented the bond repo reporting functionality this past year. In information services, we are wrapping up the foundational phase of our data strategy. We'll complete the delivery of the data infrastructure, migrating the data to the cloud, and we will deliver flexible data and our information subscriber portal. By the end of 2024, we had launched 10 new data products on the platform, and we're on track to launch an incremental 20 by the end of this year, creating momentum for new data product sales.
In addition to having end-of-day and one-source historic data available, we also launched streaming data over the cloud this year, with capabilities for delayed, filtered, and decoded feeds. Our Trade Explorer equity market analytics product has scaled up this year, with five clients onboarded or upgraded, and with a further pipeline for the remainder of 2025. Within JIS, we've been scaling up our asset reunification campaign, and this was launched in 2024 and was aimed at identifying and returning unclaimed dividends to shareholders for an estimated potential of ZAR 4.5 billion worth of unclaimed dividends. The JSE launched the claimant campaign in February 2025 to reunite unclaimed dividends with their rightful owners. Since the launch, nearly 65,000 individuals have come forward to check their dividend status, with close to 8,200 people matched as having dividends due to them.
The campaign will be running for the next two years, and the JSE encourages public participation via the claimant portal. We also advanced on the bond CCP project, which aims to introduce a best-in-class risk management solution into the bond ETP market, and it should encourage greater participation in our bond ETP market by international investors. This project is on track to go live in the fourth quarter of 2026. Beyond product expansion, we aim to create a sustainable marketplace. We further enhanced our listings requirements, and this continues to undergo an extensive review process. Separately, we also extended our collaboration with NASDAQ after NASDAQ and AWS announced their modernization blueprint. This will enable greater global interconnectivity with minimal latency, which will in turn support liquidity and potential capital flows between the U.S. and South African capital markets.
While there are many moving parts within our business, we stay fully focused on our strategic initiatives. Our dedicated teams are executing effectively, building positive momentum across key areas, as we're moving into the second half. We remain confident in delivering sustainable, high-quality earnings. Right. Let me now give a brief update on the BDA modernization project. The BDA modernization project is a central pillar of our transformation strategy, and it underpins the next generation of post-trade infrastructure for the South African market. In the first half, we completed the pilot phase and confirmed the quality of migrated code, including the most complex functionality. Full-scale migration will begin in quarter four, with mass modernization extending through to 2026 and implementation in 2027. Critically, in the first half, AWS migrated 100,000 lines of code to the new technology with no critical defects, and this included the most complex BDA functionality.
We can confirm that the migrated code is of good quality, and a further 400,000 lines of code has just been delivered towards the end of July. The objective here is to migrate 10% of the total BDA code base from COBOL to Java programming language, and then to sign this off once complete. We are very pleased with the progress so far. We've also implemented automated tools for functional and data equivalence testing, enabling quality testing and higher throughput. The next step will be the mass modernization phase, i.e., the full-scale migration of the remaining 90% of code, which is around 4.5 million lines of code. We are scheduled to complete this mass modernization process in the fourth quarter of 2026. The mass modernization process will be followed by integration testing across code components and a series of verification and validation activities.
Upon successful completion, we'll go live with the new Java-based BDA system in our equity markets. This transformation marks a significant shift away from legacy mainframe infrastructure, allowing us to modernize our technology stack. By transitioning to the cloud-based architecture, we'll gain greater agility and improved scalability. Throughout the process, we will maintain close engagement with stakeholders to ensure a seamless and transparent transition. Ultimately, this program will deliver a robust cloud-enabled platform that offers enhanced reporting and analytics for members. I'm now going to hand over to Fawzia, who will take us through the financials.
Thank you, Leila, and good afternoon to everyone. Looking at our financial performance, operating income increased by 11.4% year on year, with the JSE delivering positive operating leverage of 3.9% for the first half of the year.
This reflects elevated equity market activity, solid growth across most asset classes as well as primary markets, and improved performance in information services. Cost growth was well contained within 7.5%, as we focus on keeping a balanced approach between strategic investment and operational efficiency. 1.6% of the increase was linked to the higher trading-related activity costs, largely due to higher straight-add Bollorum fees. Our EBITDA margin remains strong at 42.1% and is stable compared to last year. Net finance income decreased as expected to around ZAR 99 million. Meanwhile, NPAT increased by 13.2% and HEPS was up 13.4%. Moving on to cash and capital allocation, we are structurally a highly cash-generative business, and net cash generated was healthy at ZAR 518 million, representing an increase of 3.1% versus last year. We continue to maintain a strong financial position, with our cash balance increasing from ZAR 2.3 billion- ZAR 2.5 billion.
This supports our flexibility to fund growth and leverage if required. Our cash conversion ratio also increased from 1.19 to 1.25. CapEx came in at ZAR 27 million and was 6.4% lower than last year. We anticipate an increase in our CapEx in H2, and I will comment on the mix and the guidance further ahead. On our regulatory requirements, we remain well capitalized, with our regulatory capital reducing slightly to ZAR 2.8 billion. As reflected in our income statement snapshot, we delivered healthy revenue growth whilst maintaining disciplined cost management, with the JSE delivering positive operating leverage of 3.9% for the first half of the year. We remain fully focused on monitoring our cost structure, with particular attention to our two largest expense categories: personnel and technology.
These areas are not only significant cost drivers but are also critical levers that support the execution of our strategic initiatives and our day-to-day operations. We remain confident in our position to deliver sustainable earnings growth. Other income decreased by 55%, primarily due to forex losses in 2025 compared to a gain in 2024, and the decrease also reflects a high base in the prior year, which included issuer regulation fines and debt recovery income. For the first half of 2025, JSE 's revenue performance was robust, and it continues to reflect the quality of our diversified revenue mix. Capital markets performance was strong, with revenue up 16%, driven primarily by elevated equity market trading activity, positive contributions from the primary market, and solid growth across our other asset classes, which was partially offset by a decline in commodity derivatives revenue.
This translated into 17% growth for post-trade services, which was also supported by BDA modernization project revenue growth due to higher transaction volumes. Revenue from JSE investor services decreased by 11%, and this was primarily driven by a high base effect relating to a once-off adjustment. JSE Clear reported 2% revenue growth, benefiting from higher clearing fees and activity in equity and currency derivatives. This was moderated by a decline in commodity derivatives revenue. Information services revenue increased by 5%, reflecting higher sales in our core market data business. Overall, and reiterating what Leila mentioned earlier, the revenue performance reflects our ability to deliver stable earnings growth in different market cycles. On the next few slides, we will comment on the underlying drivers for each revenue segment. Starting with capital markets and JIS. Capital markets performance in H1 reflected solid revenue growth across key asset classes.
Primary markets revenue was up 8%, driven by higher listing fees. We also continued to see growth in AM ETFs and AMCs, with warrants and structured product issuances also starting the year off strongly. Trading revenue was up 28%. This is in line with the 27% increase in billable equity value traded. The first four months of the year saw heightened volatility across all equity sections, driven by an escalation in global trade tensions. The resulting uncertainty led to elevated trade volumes across the globe due to positioning, hedging, and speculative activities. Colocation revenue was up 9% and contributes to 70% of the total value traded. Our bonds and financial derivatives revenue increased by 13%, and this was driven by a 13% increase in bond nominal value traded and a 35% increase in the number of contracts traded for currency derivatives.
Market activity increased on the back of tariff-related volatility and geopolitical uncertainty. Furthermore, activity in the local bond markets was also supported by the ZAR trading higher on US dollar weakness. Meanwhile, interest rate derivatives revenue decreased by 3% as contracts traded were down 2%. Commodity derivatives revenue was down 11%, with the number of contracts traded down 17% and physical deliveries down 20%. During the period, staple food prices were easing in anticipation of a bumper crop in 2025, providing significant relief for food security and alleviating concerns over food price inflation. Physical deliveries decreased due to lower carryover stock and delayed harvest activity due to a late summer. JIS revenue was down 11%, and that is largely in recognition of the prior year margin income in H1 2024.
Removing this impact of $12 million, performance was mostly stable with a slight decrease driven by lower margin income, and this was due to lower corporate actions activity as well as lower interest rates. However, we expect an improved performance in the second half and expect this segment to continue contributing positively to our NTI growth in the medium term. Moving on to slide 15, you can see that our post-trade services revenue rose by 17% compared to last year. Clearing and settlements revenue were up by 33% thanks to the increase in billable equity value traded and higher effective rates. BDA fees were up 7% year on year, reflecting an 8% increase in the number of equity trades, which grew from 358,000 to 389,000 daily transactions.
Following consultation with the market participants, the JSE will retain the existing BDA fee model and has reduced the BDA transaction fee from $0.73- $0.69, and this is effective July 1, 2025. The JSE will only implement a new fee model when we change the equity market operating model to the so-called non-mandated BDA CAPEAD model, and we are currently in the process of designing the future state operating model. Our funds under management revenue was down 1%, and this was due to the lower JSE trustees' cash balances, and the JSE Clear revenue expanded by 2%, benefiting from higher clearing fees based on increased activity in equity and currency derivatives. Information services revenue was up 5%, reflecting an increase in sales in the core market data business, and more specifically, annual price increases contributed 4%, while core market data sales and net new business contributed 2%.
On the other hand, FX had a negative impact of 1%. After a softer H2 performance in 2024, we are expecting an improvement against this trend in the second half of 2025, although dollar weakness presents a downside risk with 70% of information services revenue denominated in dollars. While the dominant contributor to information services revenue is the legacy data business, we have seen good underlying performance in our new products, Trade Explorer, Marketplace, and Trading Platforms, all be it up a low base, and we anticipate seeing steady growth in these products in H2 and further into financial year 2026. We are on track to complete our foundational data infrastructure strategy work by the end of the year, with innovative and scalable solutions around cloud data management, digitization of customer journeys, and flexible delivery mechanisms straddling intraday and end-of-day data products and services.
This is in line with our strategy to modernize the JSE data platform. Moving to slide 17, operating expenses increased by 7.5% year on year, and excluding the higher trading activity cost, OpEx was up 5.9% in line with the guidance that we provided at year end of a 5%- 7% increase. Personnel costs were up 12.7%, while technology costs were up 11.5%. These people and technology remain the critical levers that support the execution of our strategic initiatives and, very importantly, our operational resilience. The increase in personnel costs reflects mainly annual salary increases and the filling of some vacancies off a low base in the prior year, whilst the increase in the long-term incentive scheme expense was due to higher than accrued vesting.
Technology costs increased from ZAR 201 million in H1 2024 to ZAR 224 million in H1 2025, and this is due to the ongoing investments in our cloud-based strategic initiatives, as well as some reclassification of cloud-based costs from depreciation. Project costs were up ZAR 7 million year on year, and we continued to invest in the modernization of our data platform and progress with the BDA modernization project. Depreciation and amortization declined 15.4% to ZAR 87 million due to reclassifications relating to cloud-based solutions spend and a reduction in the lease expense. Regulatory compliance and other fees increased by 9.7% to ZAR 160 million, mainly because of higher straight pass-through costs due to the higher trading-related activity. Finally, our general operating expenses have remained stable. We continue to focus on our operational efficiency initiatives as we remain committed to maintaining financial discipline while ensuring that we keep allocating resources to our strategic investments.
Moving on to CapEx. For the period, CapEx amounted to ZAR 27 million, slightly lower than what we spent in the first six months of 2024, and most of the spending, about 67%, was allocated to maintain the business, which includes the BDA modernization project and regulatory enhancements. These investments are necessary to modernize our core infrastructure and to ensure the continued stability and efficiency of our trading and post-trade environment. The remaining ZAR 9 million was spent on growth initiatives, which include our information services strategy and the development of the bond CCP project. Looking ahead to the remainder of the year, we have narrowed our CapEx guidance to ZAR 150 million- ZAR 170 million, and this is largely related to a saving on infrastructure spend and a timing difference on the BDA modernization project.
All milestones in the BDA modernization project have been met for 2025 and remain on track for the remainder of the project. The CapEx budget for 2025 was not based on milestones, resulting in the deferral of spend to 2026 and 2027. All the projects are continuing and are on track with our plans. Moving to slide 19, where you can see our cash position as of the end of June. Over the period, cash from operations amounted to ZAR 518 million and cash and bonds balance to ZAR 2.5 billion. We maintain a strong liquidity profile, and we do not require additional credit lines or financing. Investing activities during the period included the sale of bonds and shares. On the next slide, as usual, we show the breakdown of our cash and bonds balance at the end of June.
Our ZAR 2.5 billion in cash and bonds comprises ZAR 1.23 billion allocated to investor protection and regulatory capital and ZAR 1.3 billion in available cash for CapEx, working capital, potential M&A, as well as shareholder returns. We adopt a conservative approach to ensure that all investments support the business growth and the risk management initiatives are internally funded. Finally, on slide 21, we have our guidance for full year 2025. We continue to expect cost growth to be between 5% to 7%, but please note that this guidance excludes higher trading-related activity shifts in cost. As mentioned earlier, we have narrowed our CapEx guidance, and we now expect CapEx to land in the range of ZAR 150 million- ZAR 170 million. Finally, we maintain our dividend policy of a 67% to 100% payout ratio. I'll now hand back over to Leila, who will conclude the rest of the presentation.
Thanks very much, Fawzia. Looking ahead, as we move into the second half of the year, we remain focused on disciplined execution across all areas of the business. Our strategic priorities are clear, and we are tracking well against our delivery objectives. Within capital markets, we are expanding our product offering and improving the trade experience for clients. The rollout of additional ETP functionality enhancements to the block trading service and expanded access to foreign participants are all underway. In the JSE investor services, we are focused on scaling our client base and broadening the service offering. The asset reunification campaign that I mentioned earlier continues to build momentum, and it's supported by an increased issuer engagement and awareness. In the JSE clear and post-trade services business, we are advancing the bond CCP technical build alongside broader improvements to our clearing and settlement architecture.
In information services, our efforts are focused on broadening the data product suite and increasing client uptake to the new platform with a more focused go-to-market strategy. This includes improved analytics tools and a growing number of data sets available through our self-service marketplace. Across all of these areas, our teams are delivering well, and we remain on track to achieve our full-year targets. Slide 24 really just covers the modernization of our broker-deal accounting system, which remains, and other elements which, and the broker-deal accounting system remains one of the most important infrastructure upgrades that we're undertaking. It's essential to enabling greater efficiency, automation, and client-centric innovation across the value chain. The program is expected to be completed, as I mentioned earlier, in 2027 with phased implementation and engagement milestones along the way, and we will continue to provide regular updates to the market as we progress.
The JSE, as we announced some time ago, signed an MOU with NASDAQ to collaborate on the rollout of a resilient, scalable, globally interconnected infrastructure and connectivity solution, thereby enabling the driving of liquidity between U.S. and South Africa and potentially beyond over time. It also involves enabling modernized operating and deployment models across capital market solutions. The blueprint lays the foundation to enhance liquidity, improve capital flows, and accelerate wealth generation across the system while reducing the friction and fragmentation associated with our global markets today. As the JSE, we are very proud to sign on as an anchor member to adopt these new solutions and to power the next phase of our modernization efforts. To conclude, the JSE is well positioned to continue to deliver long-term value. We have a resilient and diversified business model, strong operational foundations, and clearly defined strategic roadmaps.
Our balance sheet remains healthy, our markets continue to function reliably, and we are investing purposefully to support future growth. The external environment remains dynamic. I see there's a question on that, but we're entering the second half with momentum, strategic clarity, and the capacity to execute. We'll continue to build on the progress that we made in the first half, focusing on high-impact initiatives that support client outcomes and delivering sustainable earnings. Thank you all so much. I'm now going to open the floor for questions. Please go ahead and post your questions in the chat.
Leila, we have three questions for you online. The first one is from Sandhile Dube. He says, "Hi, Leila. What impact, if any, will geopolitics, uncertainty, and trade wars have on the JSE's growth trajectory?" Should I give you three?
Great. I think I'm okay to start with that, and then we can run through. We can take them as we go. Thank you, Sandhile, for that question, and it's in fact been a key area of focus for the JSE. If we contemplate our average daily value traded, as we've mentioned, we came off a very low base in the first half of 2024. We were at, on average, ZAR 21 billion a day. That has gone up to ZAR 27.8 billion a day for the first half. In the second half of last year, our average daily value traded did increase somewhat to ZAR 23 billion a day on average, and July and the beginning of August have already demonstrated a very material outperformance of way in excess of 30% for the half to date. There are a number of factors that are driving this.
Firstly, the JSE, and this is repeating a pattern that we saw during the COVID period, has reestablished itself as a proxy for emerging markets, particularly in hypervolatile event-driven markets. We saw a sharp uptick during the hypervolatile event periods during COVID, and we've seen the same year to date, driven by a combination of geopolitics, trade wars that are exogenous and external to South Africa, and, of course, the direct U.S.-South Africa relationship and underpinned by the current 30% trade tariff. In addition to that, what I would say is that we have seen a marked increase in both average daily value traded as well as the level of growth in both the all share, the top 40, and JSE Limited share prices.
If we compare how we have grown and developed relative to other markets, we can see that South Africa has enjoyed an element of the partial diversification or rotation out of the U.S. stocks and into emerging markets. The all share at the close of yesterday was sitting at 18.5% up, and the top 40 was north of 22% up. That compares to the MSCI World Index, which was at 7.2% for the year to date, and emerging markets at 15.9%. This is all suggesting that, A, there is a perceived potential perceived value in South African stocks, partly connected to the GNU, and I'm by no means not acknowledging the negative points in our country. For example, high unemployment, lackluster growth, and the very meaningful infrastructure investments and developments have not quite translated into growth yet.
Another element that affects the positioning is the amount of trading that happens from our very deep local markets. Most of our buy side post the introduction of the change in the RIG 28 limits. Many of our locals have shifted close to the 45% mark. We would argue that that's possibly largely in the base with marginal opportunity for shifting. Finally, the weighting in the index also affects us. To the extent that South Africa in either the MSCI or the FTSE Emerging Market Index contracts to below 3%, we risk becoming irrelevant, and South Africa investors are not actually focusing on the country. To the extent that we get closer to 5% of the index, we become a more meaningful player, and investors start to take under or overweight positions. Anecdotally, some investors are indicating that they're starting to shift to a balanced position from an underweight position.
Others are waiting to see tangible substantive proof of our growth in GDP. That said, both values in the indices and the JSE share price, together with volume traded and value traded, continue to grow. Finally, I'll just add, there have been a number of lumpy corporate actions. M&A activity, for example, the Pipcore book build made a material contribution to average daily value traded. We are starting to see a little bit of a pickup in that. While some of those corporate actions could potentially create a loss in a counter that's listed, it does unlock shareholder value, and that's the purpose of the exchange: capital formation and the unlock of shareholder value. On balance, I'd say there are many complex factors that are working together.
For the second half of the year to date, i.e., July and the first few days of August, we have seen in our published average daily value traded quite tremendous increases, but these numbers are reasonably lumpy. We will do everything that we can as an exchange to control the controllables. We'll ensure that we do everything to maintain stability, particularly during the hypervolatile periods, and to be responsive in creating products.
Leila, we have a question in the chat from Catherine Birch. Catherine Birch has two questions on personnel expenses. The first one is, personnel expenses are past revenue growth. Is this a catch-up on past underinvestment, or are you investing in future growth? The second one from her is regarding remuneration. Can you provide the split of how salary increases, new hires, and the LTI contributed to the remuneration growth? How should we think about real personnel cost growth going forward?
Thanks for the question. On the increase in remuneration, there are really three factors that contributed to that. The first was the salary inflation. Inflationary increases were in the region of 5%. We also had an increase in headcount, and what that represents is that vacancies that existed at the beginning of 2024 were pretty much filled in the second half of 2024, which means that we had a low base in the first half of this year, and those new hires would then be incorporated into the numbers for the first half of this year.
In terms of your question, in terms of whether this relates to investing in the business, what we are finding is that as we hire new people to fill vacancies, we are trading up in terms of some of the skills that we need in the business, and sometimes that comes at a slightly higher cost. The third factor is actually the ALTERS. We had accrued for ALTERS in our accounts in 2024 based on historic vesting rates, and for this year, the vesting rates were higher. In terms of your question on that split, as I said, inflationary increases were circa 5%. The increase in headcount was in the region of about 4%, and the ALTERS adjustment would have accounted for the balance. Thanks.
Great. I think maybe we can go to the TIC.
Sure. We have a question from FCA Dubier. He says, "Well done on a great set of results. Could you provide an overview of the JSE's technology transformation journey, including the core pillars and progress to date, and how this initiative is expected to enhance operational resilience and scalability? Thanks.
Great. Excellent. Thank you. Thank you very much for that. Technology is very much at our heart, and through the decades, we always prioritize and focus on long-term sustainability of our core. Our core represents almost two-thirds of our revenue, excluding the non-trading revenue, and we need to make sure that we keep step with changes in technology, particularly AI and cloud-related changes. At the heart of our technology strategy, and Tuvalo, our CIO and his team are well-staffed and driving and developing this vision, we have a key focus on the cloud and modernization of the stack. I've spent a lot of time talking about the BDA modernization project.
What is unique about the BDA modernization project is that we are utilizing artificial intelligence tools created by AWS to fast-track and very rapidly and efficiently execute on what many large organizations, banks, insurance companies have grappled to deal with, which is the legacy technology that's sitting on COBOL or on mainframes. In addition to that, Fawzia did mention a little bit about what we are doing in the information services, and that has been a complete redesign of our shift to the cloud, where we are creating an open API-type environment with a shop front and very rapid access and very rapid responsiveness in creating new products. In addition to that, JSE has just recently tested the MIT trading platform, which our vendor is part of the LSE Group, and we're partnering, obviously, with AWS to test a low-latency cloud-based technology environment.
This is very much on the front foot of what we're seeing globally, and we are the first client to delve into this space. The test so far has worked very well, and we're very pleased and excited about that. In addition to that, you will see us building out multiple infrastructure products, which are not only designed to reduce the costs, all-in costs for connecting and trading by our members and other stakeholders, but are also designed to enable high-speed, high-security, and low-latency supporting infrastructure. We've built and introduced Colo 2.0, which is a cloud-based colocation solution. We've just recently launched Colo 2.0, basically an upgrade which allows participants to use colocation in the backup environment, and that, again, is designed to reduce costs.
We recently launched a JSE Fix Hub, which is an important element for a number of our members who are looking to try and reduce their all-in costs. They're all working on grappling with a continually shrinking margin. We are also in the process of launching a network service which will connect certain members with others. Overall, our general themes in our tech strategy are upgrading of our older legacy systems, translating into the cloud, trying to reduce costs as far as possible, and at the same time, leveraging AI, and at the same time, upskilling our staff. We've partnered with specialists globally. We're not trying to do everything ourselves. We've been able to execute much quicker than we would have had we developed these solutions on our own. So far, all of our solutions that we've introduced have been seamlessly integrated and have come with great efficiency and effectiveness.
Leila, we have another question in the chat asking about the Global Cap investment and the fair value estimations.
Thanks, Rami. I'll take that one. Global Cap is a fintech startup with a multi-asset solution that really looks to bring public market-like efficiency, transparency, and connectivity to the private markets. Our investment in Global Cap was part of our strategic ambition to grow our private placements business through the use of the Global Cap platform, whilst also providing us with the potential upside benefits of early-stage investment in a fintech startup. Global Cap has been through two funding rounds as it has attempted to enhance its revenue pipeline and to generate sufficient cash to become sustainable. We know that that's the natural cycle of a startup. What we've decided to do is to take a conservative approach to the valuation of the business. The business has received the latest round of funding, and it is operational, but future valuation is contingent upon certain revenue thresholds being met.
We have therefore been conservative, and we've written down the investment, which was held at ZAR 75 million as at the end of last year, to null at the end of June this year. It's important to note that that write-down of ZAR 75 million is in the context of our total asset value of ZAR 56.9 billion. This write-down is done through OCI, so there's no impact on our P&L, and any future write-ups will also be done through OCI.
Thanks, Fawzia. Leila, we have another question in the chat from Littleton Lanaka. He asked, "Can you comment on the current regulatory environment, particularly with regards to the review of the Financial Markets Act by Parliament? In addition, any comments and thoughts on competition would be great." I think there's a second question that pairs quite well with it as well. It is regarding, "Can you comment on the progress made by the competitor A2X and whether they might gain a fair share of the equity market value traded in line with other markets across the world? Are regulatory issues hindering their progress, and might this change?
Great. Thank you for both of those questions. Very, very good questions. Insofar as the Financial Markets Act goes, we are awaiting a consultation process, so it will still have to go through consultation. It is not in Parliament yet, and thereafter, it will go to Parliament. Insofar as competition goes, it's very difficult for us to say where the future lies. What we can say is that we control what we are able to do. We've been responsive. We are currently, we process anything between 95% and 98% of market value traded. We will continue to focus on ensuring a cost-effective and highly resilient solution on next-generation technology, our nanosecond and very strong infrastructure support, and our low level of outages are important value propositions, and depth of market is an important thing.
We continue to focus on those things that we can control, and we see competition in a very broad sense. Private equity flows from external countries in terms of international foreign flows. All of these elements contribute to a highly contested and competitive environment, and our focus is on delivering on our strategy, which is next-generation, well-efficient, and well-priced technology, clear and consistent rules, and responsive product and pricing.
Thank you, Leila. We've got two final questions from Sandhile Dubie in the chat. The first one is, "How much of the reported earnings were driven by one-off gains versus core operational performance? What can we expect from HEPS going forward?" Finally, he's closing with, "Great to see continued investments in digital infrastructure to support your strategy. What's your call of action or expectations to all your tech partners to accelerate your growth beyond current projections? Thank you.
Yeah. Thanks, Romy. I'll take the question on earnings. Actually, the bulk of our earnings in 2025, or first half of 2025, was in fact from core operational performance. As you've seen through the results presentation, that was buoyed by the increase in the value traded for the six months. Interestingly enough, the performance for last year had two once-off gains in there. Last year, we had the once-off gain from the JIS margin income, so the ZAR 12 million. That actually elevated the base last year and said it would have decreased earnings growth this year. That was the first thing. The second thing is we had some forex, so we had some gains in other income last year. It was largely forex gains and regulatory fines. Now, other income, as you would know, is quite difficult to budget, and it really is once-off.
We haven't had any of those in the current year, but it did increase our earnings for last year. In effect, without those once-off gains from last year, our earnings this year would potentially have been higher than what we're reporting. Overall, I would say to you the bulk of the earnings in the current year is from operational performance.
Thanks. A closing question from what you've largely covered is regarding your expectations to all your tech partners to accelerate your growth beyond current projections. I don't know if you want to close with that.
Yes. Very, very happy to close with that. Thanks very much, Sandhile, for that question. We are very focused on digital modernization, reducing our infrastructure cost base, and partnering with best-in-class partners globally. We have developed relationships with multiple best-in-class partners ranging from AWS to Microsoft Azure to London Stock Exchange Group, MIT, NASDAQ, IPC BEX, and Big XYT, just to name a few. We are at the highest level constantly engaging with them. In fact, I'll be doing the opening speech at the AWS Africa and South Africa conference, and we are engaging with the global heads constantly. Our call to those partners is on a couple of different levels. A, we're looking to migrate at low cost our aging infrastructure into the cloud, modernize. We're looking to skill up our staff, and we've been doing that very effectively through all of these projects.
We are looking to open up new lines of revenue in adjacent solutions that can continue to deliver on the very successful strategy that we've managed to perform on, which is diversifying our revenue. We are very focused, and we are going to focus on those big-ticket items that can genuinely move the needle. We're not going to overcommit in multiple different areas. Each project that we have committed to, we've been able to deliver on. Our current very large-scale project is, of course, the modernization of the BDA system . We have alluded to the concept of a private local zone and the potential that that could bring to the South African market, and that would be collaborating with AWS, and we'll continue those conversations. We really do need to make substantial progress in this very critical mass modernization phase in the BDA project system.
All in all, I think we're in a good space technologically. We are focused in the right areas. We've got the right skills in place, and we're continually doing a combination of strategic hires in the right level of skill, whether that's cyber, cloud, or AI. We're also focused on upskilling our existing staff. With that, I'd like to thank everybody who's dialed in and to say that just in reiterating what I said in the closing of the presentation, the JSE is delighted with the strong performance, with the ongoing delivery of our strategy to diversify our revenue. We're very pleased with our operational stability. We are underpinned with a strong balance sheet, which gives us balance sheet optionality and, of course, a highly cash-generative business. We look forward to engaging with our shareholders and analysts in our one-on-one meetings. Thank you very much for dialing in.
Thank you.