Monday, January 24, 2011

JSE hits all time high trading volumes

The JSE said on Monday that in spite of increased global uncertainty and the additional focus on the regulation of financial markets, the FTSE/JSE All-share Index (Alsi) rose 13.86% from December 2009 to December 2010.

It reached a high of 32 210 trades towards the end of December 2010.

"For 2010, daily average trades increased 13% to 94 656 trades compared with the corresponding period in 2009. That equates to a total of transactions for 2010 at 23 758 658, compared with 20 950 750 and 17 398 986 recorded in 2009 and 2008 respectively," it said.

Trades hit a record in June, when 205 748 transactions valued at more than R20bn were recorded on the exchange.

"This is the first time in the JSE's 123-year history that the number of trades has crossed the 200 000 mark. The previous record was set on May 7 2010, when 189 253 transactions were recorded. The rise in 2010's average daily trade numbers contributed to the record," it said.

The JSE said that SA's ranking in the World Economic Forum's 2010/2011 Global Competitiveness Review - as the world's best regulated financial market - bodes well for offshore interest in JSE capital markets.

A new equities market billing model, introduced in March 2010 in a bid to create incentives for high-volume and high-value participants, contributed to the increased trade.

"A further change will be implemented on February 1 2011, where the current minimum of R5.48 will be reduced to R5 and the ceiling amount of R12.34 will be increased to R18. This would be a second step towards moving to a more value-based billing model," said Leanne Parsons, head of the equity market at the JSE.

Retail growth focus

Volatility in the market could have also contributed to the increased trade, it said.

It would continue to encourage individual or retail investments.

"The JSE views the South African retail market as a long-term growth area and continues to pursue its strategy of increasing the financial knowledge of South Africans with the aim of growing the number of retail investors and adding to trade volumes," said Parsons.

The JSE said that while foreign investor interest in its equity market had waned from the record inflows of 2009, strong inflows continued.

By end-November 2010, foreigners were net buyers of local equities to the value of R31.4bn.

The increasing appetite for Africa as an investment destination is yielding results and in the first six months of 2010, total investment fund allocation to Africa was a record $1.39bn, according to investment research firm EPFR.

"The JSE's Africa strategy is aimed at contributing to the improvement of Africa's capital markets. The exchange's Africa board offers a destination for trade of quality African companies, acting as a gateway for investors wanting to access African securities," it said.