Speaker 1: Global business news twenty four hours a day. It's Bloomberg
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Speaker 1: This is a Bloomberg Business Flash. Charm Bloomberg World Handquarters.
Speaker 1: I'm Charlie Pellett. Stocks are rallying ahead of the final
Speaker 1: hour of trading on this Wednesday, SMP five hundred index
Speaker 1: snapping a two day drop after data showing acceleration in
Speaker 1: the manufacturing and services sectors. SMP five hundred Index up
Speaker 1: eleven points to sixty one, that is a gain of
Speaker 1: five tenths of one percent down. Industrial is up one
Speaker 1: d twenty nine points, up seven tenths of one percent.
Speaker 1: Nav stack is up thirty three points, a gain of
Speaker 1: six tents of one percent. Tenure down nine thirty seconds
Speaker 1: the old one point seven two percent, Gold down sixty cents,
Speaker 1: the ounce to twelve sixty nine. Crude Oil West Texas
Speaker 1: Intermediate up two point one percent, gaining a dollar three
Speaker 1: of arrel forty nine seventy one. Right now on w
Speaker 1: T I, I'm Charlie Pellett. That's a Bloomberg Business Flash.
Speaker 1: You're listening to Taking Stock with Kathleen Knaves and Pim
Speaker 1: Fox on Bloomberg Radio the Johannesburg Stock Exchange. It's the
Speaker 1: biggest in Africa, the twentieth largest in the world, with
Speaker 1: over three hundred thirty companies listed on the primary exchange,
Speaker 1: representing an average market cap of one point four excuse me,
Speaker 1: one point over four billion US dollars, with some companies
Speaker 1: containing a market cap of over one trillion US dollars.
Speaker 1: And we're very happy to welcome the CEO of Johannesbrook
Speaker 1: Stock Exchange, the j s C, Nicki Newton King. She
Speaker 1: is in town this week for the fourth annual South
Speaker 1: Africa Tomorrow Investor Conference. The j s C is one
Speaker 1: of the coast sponsors. Nicki Newton King, Welcome to Bloomberg Radio.
Speaker 1: Thank you for having me, so tell us a little
Speaker 1: bit more about the j s the Johannesburg Stock Exchange
Speaker 1: and your role there. You've been in this industry for
Speaker 1: many years. I've been in there at the stock exchange
Speaker 1: itself for twenty years, if you can believe it. The
Speaker 1: state of the exchange is are essentially a one stop shop.
Speaker 1: It's completely horizontally and vertically integrated. Means we trade, we list,
Speaker 1: we trade, we clear, we settle equities, bonds, financial derivatives, commodities.
Speaker 1: Really it's the place you come to if you want
Speaker 1: to buy South Africa. Now, recently you said that we
Speaker 1: have to internalize the fact that the way we do
Speaker 1: things in this country, meaning South Africa, needs to change.
Speaker 1: What did you mean by that and give us a
Speaker 1: little context for people that have not been following what's
Speaker 1: going on with the South African economy and the political scene. Yeah,
Speaker 1: for sure, So we are. We have a very noisy democracy,
Speaker 1: and we have a very wide Geni coefficient, meaning that
Speaker 1: we have a very sophisticated business class and and but
Speaker 1: some very economically marginalized, a very deep economically marginalized sector
Speaker 1: of our of our society. And I think business needs
Speaker 1: to change the way it does business to recognize that
Speaker 1: just making money, just distributing that to shareholders just simply
Speaker 1: isn't a good enough way to do business in an
Speaker 1: emerging market like us. It's about how you reach out
Speaker 1: and make sure that the way you do business is
Speaker 1: more inclusive. As you grow, how do you grow inclusively? Well,
Speaker 1: there's a lot of that. That's a tough question, not
Speaker 1: only in South Africa, but a lot of places. So
Speaker 1: as you move ahead, how you how would you plan
Speaker 1: to tackle that? How does it affect your role? Well,
Speaker 1: it's very fascinating because the exchange is at the sort
Speaker 1: of center of the capital market system, and so we
Speaker 1: become a point for for the economically marginalized to talk
Speaker 1: to about how they wish to be included. I think
Speaker 1: the first party is listening, the second party is engaging
Speaker 1: the listed companies about how do you actually look at
Speaker 1: your labor relations, how do you look at how you
Speaker 1: price what are your additional responsibilities in a country like US,
Speaker 1: for instance, in relation to education, in relation to housing,
Speaker 1: relation to health. It's a far broader, more sustainable way
Speaker 1: of looking at business than perhaps one traditional looking at
Speaker 1: in in some of the bigger capitalist markets. Tell us
Speaker 1: a little bit about the effects of interest rate changes
Speaker 1: in the United States on an economy such as that
Speaker 1: in South Africa, for sure. I mean everybody looks at
Speaker 1: what's happening in the US FED and as soon as
Speaker 1: the interest rates increase in America, emerging markets come under pressure.
Speaker 1: So we are an extremely open, extremely well regulated, very
Speaker 1: transparent emerging market that stacks up well from a capital
Speaker 1: market perspective. So international investors look at South Africa and
Speaker 1: say I can bring money in and take it out
Speaker 1: at any given time. The US rates start to increase,
Speaker 1: I think the US starts to US investors start to withdraw.
Speaker 1: South Africa thirty percent of our market any given days
Speaker 1: foreign So it matters what's happening in the States. Yeah,
Speaker 1: you know, South Africa. I guess this is considered an
Speaker 1: emerging market. In what way? Is it emerging still? But
Speaker 1: in what sense? The South Africa gained its economy and
Speaker 1: it's it's companies a status that to me, it seems
Speaker 1: very very developed, very deep, but emerging, anything but emerging.
Speaker 1: It's it's emerging in the sense of the GENII coefficient,
Speaker 1: in the sense that as a as an economy, the
Speaker 1: size of an economic sophistication broadly speaking of the economy
Speaker 1: looks more advanced emerging really than than frontier emerging. But
Speaker 1: the structure of the really most sophisticated parts, like the
Speaker 1: financial markets is absolutely world class. So, as an example,
Speaker 1: the exchange five years in her own rated number one
Speaker 1: in the world by the World Economic Forum for the
Speaker 1: sophistication of the regulation in exchange space. So that's right
Speaker 1: at the very pointy end of sophistication. And so we
Speaker 1: pride ourselves to South Africans in being able to offer
Speaker 1: investors world class investment environment, but an emerging market investment case. Now,
Speaker 1: you've had a lot of political turmoil. You referenced this,
Speaker 1: and I'm wondering if you could just offer people a
Speaker 1: little bit of detail. There are reports that the current
Speaker 1: Finance minister is being probed by police and maybe arrest.
Speaker 1: You've had the Reserve Bank governor say that South Africa's
Speaker 1: rand is currently under valued and that the fluctuations in
Speaker 1: the rand are partly because of political issues. So we're
Speaker 1: a noisy democracy, but we are a democracy and we've
Speaker 1: just had a very noisy local government elections where there's
Speaker 1: been significant transfers of power from the ruling party to
Speaker 1: to the opposition, all peacefully achieved. So that noisy democracy
Speaker 1: brings with it storms for investors to navigate through. The
Speaker 1: Finance minister has been under pressure as there has been
Speaker 1: suggestions about potential charges against them, but those were confirmed
Speaker 1: to be going nowhere this this week. I think one's
Speaker 1: got to recognize there's institutional strength. They're far deeper than
Speaker 1: just the Minister of Finance. So how about the existing
Speaker 1: opportunities for investors in South Africa right now, what investors
Speaker 1: tell us International investors tell us world clast management teams
Speaker 1: across a range of sectors, very deep financial markets, very
Speaker 1: well established, well capitalized banks, very deep um UH institutions. Oh,
Speaker 1: it's specifically industrial related companies. Mining a little bit more
Speaker 1: under pressure. Of course, mining people think is our anchor
Speaker 1: investment case, but it's no longer the big, the big
Speaker 1: investment part of South Africa. As the size of the
Speaker 1: financial services environment in the five and and the size
Speaker 1: of of other broad based industrial companies have grown, has
Speaker 1: the mining sector in in South Africa? I mean, has
Speaker 1: this been effected not only by competition, but the ray
Speaker 1: Hunt has dropped significantly in value against the I think
Speaker 1: it's done about eighteen percent so far this year. The
Speaker 1: mining industry is under pressure at the moment. And of
Speaker 1: course you've also had historically in the last two years
Speaker 1: quite a lot of labor unrest in the mining space.
Speaker 1: That's significantly calmed in the last year. So hopefully as
Speaker 1: commodity prices recover, mining will find its space. So is
Speaker 1: it unusual for a woman in South Africa to become
Speaker 1: the CEO of the stock exchange the largest on the continent,
Speaker 1: the twenty largist in the world. Well, it's uh and
Speaker 1: the first female CEO of the Stock Exchange. But when
Speaker 1: I was appointed, the head of the Reserve Bank was
Speaker 1: a woman. The head of one of our biggest big
Speaker 1: four banks was a woman. There are a lot of
Speaker 1: senior women in South Africa. We really pride diversity at
Speaker 1: the core of what we do in South Africa because
Speaker 1: diversity is a competitive advantage. You need people who think
Speaker 1: differently round a table when you're looking at really complex problems.
Speaker 1: So it's something I've been very proud to lead. It
Speaker 1: is unusual globally. It's not unprecedented, but it is unusual globally.
Speaker 1: Was it ever thus in South Africa? No, Well, I mean,
Speaker 1: you know, I think we're beginning to see more and
Speaker 1: more more women and and hopefully they'll be more following me.
Speaker 1: Are there any plans to change policies at the Johannesburg
Speaker 1: Stock Exchange in order to solicit more foreign investment. We
Speaker 1: rarely pride ourselves from an exchange perspective of being very
Speaker 1: open to attracting in specifically top international companies listing on
Speaker 1: in South Africa. As an example, a b in bev,
Speaker 1: the world's largest brewer, took twenty seven days from the
Speaker 1: time that they spoke to us the first time to
Speaker 1: the time that they were listed. They said, of their
Speaker 1: four global listings, it was the most constructive world class
Speaker 1: listings process they've ever had. From an investor perspective, we
Speaker 1: only hear complementary things from investors. But in my mind,
Speaker 1: if investors need us to to shop and that what
Speaker 1: we do, then we're always open. Because you're publicly traded,
Speaker 1: publicly traded company for sure, and that's I think a
Speaker 1: good thing for an exchange to actually live part of
Speaker 1: its own business model, don't you think so? In terms
Speaker 1: of some of the upcoming what's the next South Africa?
Speaker 1: What are the next big companies? I think technology, for example,
Speaker 1: there's in many parts of Africa the continent now they're
Speaker 1: they're tech startups of all shapes and sizes. What's what's
Speaker 1: what's really interesting right now in South Africa and what's
Speaker 1: interesting in South Africa is to start to see the
Speaker 1: real big South African entrepreneurs look to use their South
Speaker 1: African base as a platform for expanding on the continent.
Speaker 1: They become a proxy for the African story and that's
Speaker 1: going to be a good news for the for for
Speaker 1: investors through the j C because they can use a
Speaker 1: world class environment to access the African story, the commodity story.
Speaker 1: Just last word to you. I mean, because we talked
Speaker 1: a little bit about gold, but there's also a lot
Speaker 1: of thermal call for example in South Africa, there is
Speaker 1: a there are a lot of different commodities. But the
Speaker 1: commodity space and is a is a pretty difficult space
Speaker 1: to actually to to actually deeply innovate in, especially in
Speaker 1: the labor with the labor space, so we have we
Speaker 1: are going to have to work quite hard to unlock
Speaker 1: and ride that commodities wave. I think I want to
Speaker 1: thank you very much for coming in and spending time
Speaker 1: with us. The chief executive of the Johannesburg Stock Exchange,
Speaker 1: Nikki Newton King the johannes Stock Exchange up twenty seven
Speaker 1: and a half percent so far this year. You're listening
Speaker 1: to take King Stock. I'm pim Fox, my co host
Speaker 1: Kathleen Hayes, and this is Bloomberg. Yeah,