Q: Please describe the JSE’s Origination and Deals department and its role?
A: The department falls under Capital Markets and comprises listings, sales and originations in the Primary Markets team, as well as a focus on growth for the JSE across the group through appropriate deals. Together we are responsible for supporting the JSE in executing new listings and deals, which may include more listings of existing products, introducing new products or executing joint ventures, partnerships and/or acquisitions.

Q: What are your responsibilities as Head of this new division within the JSE?
A: The main need for the role was the focus on new streams of growth and diversification. The likes of the NYSE, LSE and Nasdaq have grown and built out their business into areas such as private markets, data analytics, ESG reporting and trading, clearing and settlement services, index services and so on. This is away from traditional trading, clearing and settlement or transactional lines as capital markets evolve and diversify.

The LSE, for example, has partnered with fintech firms to build an everyday investing platform for discounted share issuances. This allowed for a £2 billion retail share placing earlier this year. In addition, in one of the largest deals in an exchange space, the LSE has indicated a bid for Refintiv, which is still pending approval. These are among the latest examples of how exchanges are transforming.

In the US, Nasdaq has rolled out the Nasdaq Private Market over the past few years, which provides private-transaction software to private companies and investment funders looking to do tender offers or share buybacks. The platform allows for the buying and selling of illiquid assets, including private company equity, structured products and restricted securities. Our team will look into these growth areas for the JSE with a view to partner up with existing local and international service providers.

Traditional listings and a higher need for diverse and consciousness investing has emerged. And in particular, with COVID, a high focus for country-level growth is in SMEs and infrastructure. Both of these areas will be a focus for us as the JSE as to how, through products and services, we can help grow these initiatives.

Q: What are the main challenges?
A: From an origination perspective, net listings have been declining for several years. The prevailing economic climate has made it difficult for companies to raise capital and grow their market caps. This has led to some firms delisting from the exchange and it has dissuaded new companies from listing. Additionally, investors are concerned about the concentrated nature of the market. A more diversified and efficient market will give investors additional tools to meet their requirements.

Interest rate issuance has bucked this trend though, with 20% year-on-year growth in listed bonds. While we expect this to continue, we are looking to improve both the breadth and width of the interest rate market. The recently issued R2 billion Nedbank Green Bond is in line with our objectives. We expect to list more thematic bonds on the market, including social bonds and sustainability bonds under the sustainability segment of the JSE.

There has also been a global shift, particularly in developed markets, away from listed markets into private markets. We see that growing in SA as well with the various types of projects and with cited changes to regulations that may facilitate more capital allocation to private equity or debt transactions. As capital markets change, we too would like to stay abreast with the current environment.

Q: What opportunities will the JSE explore?
A: In line with the JSE’s strategic thrust to co-create for growth, the ‘new normal’ offers the company an ability to respond to the country’s sustainable and equitable growth challenges. The sustainability segment will assist with this. We also have the opportunity to bring the SME market closer to sources of capital.

We will also be reaching out across the globe for inward listings, which allow non-SA companies to list on the exchange for raising capital, accessing SA investors and/or M&A opportunities. SA investors will then have access to a broader investment universe, allowing for diversification of their portfolios.

In addition, the JSE is looking eastward to attract trade from Asia onto our bourse. This should increase the liquidity and quality of our market. Our team will support these initiatives by helping bring in the right technology partners through JVs and co-operation.

Q: What strategies will you be applying, who benefits the most, and how?
A: Some of the products we’re looking to develop should enable previously underserved segments such as SMEs and infrastructure projects, to gain better access to capital.

SME growth has been linked to job creation, and infrastructure development to GDP growth, both of which are key economic imperatives for the country. Our market engagements tell us that shortage of capital is not a major constraint. However, efficient access to capital is a challenge that the JSE has innovatively solved for many decades.

Q: What is your vision for the future?
A: I am excited by the JSE’s strategic imperative to co-create for growth. In my role, I hope to assist this growth to be sustainable, equitable and transformational, helping alleviate the socio-economic challenges facing the country.

Q: Briefly detail your career history and specific talents relative to this position.
A: I started at Standard Bank on its grad programme and settled there as a bond analyst. I moved into boutique corporate finance in 2004. I spent seven years in the Cadiz corporate finance team, then headed up the Vunani corporate finance team for the past three years.

I feel honoured to have executed on transactions worth more than R35 billion, including capital raise for the first KZN Growth Fund and the IHS Affordable Housing equity fund. A highlight was winning the Top in Corporate Finance prize from the Association of Black Securities and Investment Professionals.

By Kerry Dimmer