The JSE, whose quarter of listings are made up of dual listings, is monitoring global events that have seen the world’s largest stock exchange pursue 24-hour trading hours, with Africa’s largest bourse likely to follow suit.
This comes as the London Stock Exchange Group (LSEG), Nasdaq and New York Stock Exchange (NYSE) have either announced or are said to consider extending their trading hours to 24 hours.
“Extended hours for trading have been discussed quite widely globally with the announcement by Nasdaq to get to 24/7 trading by 2026, and now NYSE and LSEG are also referencing a move,” Valdene Reddy, director of capital markets at the JSE, told Business Day.
“The use case and operating model for 24 hours has been proven with trading across digital assets and, in particular, crypto. So, it’s a model that has been in play with traditional assets looking to catch up,” she said.
“With global shifts, and with the JSE having over 25% of its counters as dual-listed, and with a mix of both global and local issuers and investors, we are watching this space closely to understand the timing and trajectory of global market shifts and will respond appropriately to ensure the relevance of the SA capital markets.”
Expands access
If implemented, round-the-clock trading could expand access for both retail and institutional investors, allowing South Africans and global investors to engage with global shifts in real time.
The Financial Times on Monday reported that the LSEG is considering launching a 24-hour trading service, joining other major global bourses that have sought regulatory permission to allow round-the-clock stock trading.
US-based Nasdaq CEO Tal Cohen in March said the exchange is seeking to trade for 24 hours on working days, with the bourse expecting to do so in the second half of next year.
Nasdaq is the world’s second-largest largest after the NYSE, which has also sought permission to offer around-the-clock trading.
It is believed that if widely adopted, 24-hour trading could open up new avenues, particularly for retail and international investors seeking more flexibility in accessing global financial markets.
“The 24/7 trading gives investors the ability to express a trading view continually without breaks in periods to react to news, events and market moves. It enables real-time trading responses to any market-moving news flow and activity, which enables retail and institutional investors to react without any lag periods,” Reddy said.
“While extended trading hours may offer more opportunities, the real value lies in whether they enhance market depth and quality. A holistic view of the trading ecosystem is essential to assess the true impact of such a transition.”
Delistings
The JSE has been on a journey to make listing and staying listed on the exchange as seamless as possible, with the exchange having halved in size over the past two decades, after a spate of delistings.
The bourse last split its main board into two segments, tailored to meet the needs of large corporations and smaller firms. The main board was divided into “prime” and “general”, with smaller companies trading in the general segment.
This action is designed to minimise regulatory burdens and the costs associated with listing on the JSE for smaller companies.
The JSE hopes segmentation will curb the trend of delistings by making it more appealing for small- and mid-cap companies to stay listed. Delistings on the JSE have seen Africa’s largest stock exchange halve in size in two decades. Delistings curtailed trading volumes and shrunk options for savers.
Benefits accruing to smaller issuers listed on the general segment will include flexibility to raise capital through the introduction of a general authority to issue shares for cash without shareholder approval, subject to a prescribed limit and pricing limitations.
Another reform will see groups listed on the general segment being permitted to prepare an annual report within four months instead of the three month deadline.
The JSE has removed fairness opinions for related-party transactions/ corporate actions, with more emphasis placed on shareholders’ approval.
The reforms are among the most consequential in 20 years.
The JSE has over the years faced criticism for onerous regulations and requirements for small firms, with the cost of being listed excessive for firms not having the financial muscle of their bigger counterparts.
The JSE and Nasdaq in April said they were investigating the possibility of deepening their long-standing relationship in a modernisation push that the exchanges hope will boost liquidity between the US and SA — with the option of collaborating on listings on the cards.
Reddy said work was under way to achieve the objectives the exchanges announced in April.
“We are in deep analysis and detailed work streams across the teams to assess, design and solutions to bring to the SA capital markets, in order to deliver enabling innovative global access and infrastructure solutions,” Reddy said.
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.