The BRICS Securities and Derivatives Markets - Hong Kong ...

Equity market capitalisation / Equtiy turnover (US$bn)The BRICS Securities and Derivatives Markets6.1 Market segmentsThe JSE provides issuance, trading and post-trade services across the markets of equities,interest rate products and derivatives. Equity products include ordinary and preferenceshares, ETFs, warrants, real estate investment trusts (REITs), South African DepositoryReceipts (SADRs) on foreign shares and some less typical products (Krugerrand gold coinsand carbon credit notes). The interest rate market offers spot trading and repo trading incorporate and government bonds and their related futures products. Other derivativesavailable are futures and options on equities, currencies and commodities (including metals,crude oil and agricultural products) which are traded on the Yield-X business segment of theJSE. Yield-X is in the process of merging its interest rate product segment with BESA afterthe JSE’s acquisition of the latter in 2009.Equity market trading is conducted on the LSE’s latest technology platform, MillenniumExchange. Interest rate and derivatives products are traded on the Nutron Trading System.The equity clearing system is the Broker Deal Accounting (BDA) System, the back-officesystem that JSE members must use for maintaining their accounting and client records.Electronic securities settlement is conducted on a T+5 cycle by Strate for dematerialised orimmobilised securities, including bonds. Derivatives products are cleared by the SAFEXClearing Company (SAFCOM), a wholly owned clearing house of the JSE.6.2 Equity marketThe JSE’s equity products are traded on two markets — Main Board and AlternativeExchange (AltX). The latter caters for smaller companies which are not yet able to list onthe Main Board. There was a third market — Africa Board — for the listing of Africancompanies domiciled outside South Africa but it was closed in April 2012, with the listingsmoved to the Main Board. Over 70 Main Board-listed companies are also dually listed onoverseas exchanges, including Australian Stock Exchange (ASX), the LSE, Nasdaq StockMarket and the NYSE. Figure 6-1 shows the growth in market capitalisation of all listedcompanies and annual turnover on the JSE equity markets in the past decade.Figure 6-1. Equity market capitalisation and turnover on JSE (2002 – 2011)1,2001,000Equity market capitalisation and turnover on JSE (2002 - 2011)Equity turnover valueEquity market capitalisation1,0138007158348058566005654002684563014364863493804524072001889611318320202002 2003 2004 2005 2006 2007 2008 2009 2010 2011Sources: Monthly statistics of JSE and WFESources: Monthly statistics of JSE and WFE- 25 - Research & Corporate Development, HKEx31 December 2012