JSE Set to Almost Double Spending to Speed Up Settlement System

JSE Ltd., which operates Africa’s largest debt and equity markets, plans to increase capital spending by more than 80 percent as it speeds up systems to deliver and pay for securities transactions.

The Johannesburg Stock Exchange has made moving to three-day settlement from five days a top priority to keep pace with global bourses and potential local competitors, Chief Executive Officer Nicky Newton-King said by phone from Johannesburg on Thursday. It also wants to upgrade derivatives trading and clearing operations, she said.

The bourse will allocate 211 million rand ($18 million) for capital expenditure to third parties this year, compared with 116 million rand in 2014, the Johannesburg-based company said in a statement. The JSE will fund spending from its 1.6 billion rand of cash, while paying a special dividend of 80 cents a share on top of an ordinary payout of 4 rand per security.

“We’ve a number of major investments ahead of us” and regulatory requirements that still need to be completed, so the JSE felt it “necessary to take a prudent approach to the distribution of dividends,” Newton-King said. “That said, I do think a 20 percent uplift in dividends is a reasonable return to shareholders.”

The JSE will probably go live with three-day equity settlements between May and July next year, she said.

The company’s shares rose less than 0.1 percent to 124 rand at the close of trade in Johannesburg, bringing gains over the past 12 months to 48 percent.

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