JSE's Newton-King: Mining Is No Longer Only Opportunity (Audio)

five tenths of one percent down. Industrial is up one d twenty nine points, up seven tenths of one percent. Nav stack is up thirty three points, a gain of six tents of one percent. Tenure down nine thirty seconds the old one point seven two percent, Gold down sixty cents, the ounce to twelve sixty nine. Crude Oil West Texas Intermediate up two point one percent, gaining a dollar three of arrel forty nine seventy one. Right now on w T I, I'm Charlie Pellett. That's a Bloomberg Business Flash.

You're listening to Taking Stock with Kathleen Knaves and Pim Fox on Bloomberg Radio the Johannesburg Stock Exchange. It's the biggest in Africa, the twentieth largest in the world, with over three hundred thirty companies listed on the primary exchange, representing an average market cap of one point four excuse me, one point over four billion US dollars, with some companies containing a market cap of over one trillion US dollars. And we're very happy to welcome the CEO of Johannesbrook

Stock Exchange, the j s C, Nicki Newton King. She is in town this week for the fourth annual South Africa Tomorrow Investor Conference. The j s C is one of the coast sponsors. Nicki Newton King, Welcome to Bloomberg Radio. Thank you for having me, so tell us a little bit more about the j s the Johannesburg Stock Exchange and your role there. You've been in this industry for many years. I've been in there at the stock exchange

itself for twenty years, if you can believe it. The state of the exchange is are essentially a one stop shop. It's completely horizontally and vertically integrated. Means we trade, we list, we trade, we clear, we settle equities, bonds, financial derivatives, commodities. Really it's the place you come to if you want to buy South Africa. Now, recently you said that we have to internalize the fact that the way we do things in this country, meaning South Africa, needs to change.

What did you mean by that and give us a little context for people that have not been following what's going on with the South African economy and the political scene. Yeah, for sure, So we are. We have a very noisy democracy, and we have a very wide Geni coefficient, meaning that we have a very sophisticated business class and and but some very economically marginalized, a very deep economically marginalized sector

of our of our society. And I think business needs to change the way it does business to recognize that just making money, just distributing that to shareholders just simply isn't a good enough way to do business in an emerging market like us. It's about how you reach out and make sure that the way you do business is more inclusive. As you grow, how do you grow inclusively? Well, there's a lot of that. That's a tough question, not

only in South Africa, but a lot of places. So as you move ahead, how you how would you plan to tackle that? How does it affect your role? Well, it's very fascinating because the exchange is at the sort of center of the capital market system, and so we become a point for for the economically marginalized to talk

to about how they wish to be included. I think the first party is listening, the second party is engaging the listed companies about how do you actually look at your labor relations, how do you look at how you price what are your additional responsibilities in a country like US, for instance, in relation to education, in relation to housing, relation to health. It's a far broader, more sustainable way of looking at business than perhaps one traditional looking at

in in some of the bigger capitalist markets. Tell us a little bit about the effects of interest rate changes in the United States on an economy such as that in South Africa, for sure. I mean everybody looks at what's happening in the US FED and as soon as the interest rates increase in America, emerging markets come under pressure. So we are an extremely open, extremely well regulated, very transparent emerging market that stacks up well from a capital

market perspective. So international investors look at South Africa and say I can bring money in and take it out at any given time. The US rates start to increase, I think the US starts to US investors start to withdraw. South Africa thirty percent of our market any given days foreign So it matters what's happening in the States. Yeah, you know, South Africa. I guess this is considered an emerging market. In what way? Is it emerging still? But

in what sense? The South Africa gained its economy and it's it's companies a status that to me, it seems very very developed, very deep, but emerging, anything but emerging. It's it's emerging in the sense of the GENII coefficient, in the sense that as a as an economy, the size of an economic sophistication broadly speaking of the economy looks more advanced emerging really than than frontier emerging. But the structure of the really most sophisticated parts, like the

financial markets is absolutely world class. So, as an example, the exchange five years in her own rated number one in the world by the World Economic Forum for the sophistication of the regulation in exchange space. So that's right at the very pointy end of sophistication. And so we pride ourselves to South Africans in being able to offer investors world class investment environment, but an emerging market investment case. Now,

you've had a lot of political turmoil. You referenced this, and I'm wondering if you could just offer people a little bit of detail. There are reports that the current Finance minister is being probed by police and maybe arrest. You've had the Reserve Bank governor say that South Africa's rand is currently under valued and that the fluctuations in

the rand are partly because of political issues. So we're a noisy democracy, but we are a democracy and we've just had a very noisy local government elections where there's been significant transfers of power from the ruling party to to the opposition, all peacefully achieved. So that noisy democracy brings with it storms for investors to navigate through. The Finance minister has been under pressure as there has been suggestions about potential charges against them, but those were confirmed

to be going nowhere this this week. I think one's got to recognize there's institutional strength. They're far deeper than just the Minister of Finance. So how about the existing opportunities for investors in South Africa right now, what investors tell us International investors tell us world clast management teams across a range of sectors, very deep financial markets, very well established, well capitalized banks, very deep um UH institutions. Oh,

it's specifically industrial related companies. Mining a little bit more under pressure. Of course, mining people think is our anchor investment case, but it's no longer the big, the big investment part of South Africa. As the size of the financial services environment in the five and and the size of of other broad based industrial companies have grown, has

the mining sector in in South Africa? I mean, has this been effected not only by competition, but the ray Hunt has dropped significantly in value against the I think it's done about eighteen percent so far this year. The mining industry is under pressure at the moment. And of course you've also had historically in the last two years quite a lot of labor unrest in the mining space. That's significantly calmed in the last year. So hopefully as

commodity prices recover, mining will find its space. So is it unusual for a woman in South Africa to become the CEO of the stock exchange the largest on the continent, the twenty largist in the world. Well, it's uh and the first female CEO of the Stock Exchange. But when I was appointed, the head of the Reserve Bank was a woman. The head of one of our biggest big four banks was a woman. There are a lot of

senior women in South Africa. We really pride diversity at the core of what we do in South Africa because diversity is a competitive advantage. You need people who think differently round a table when you're looking at really complex problems. So it's something I've been very proud to lead. It is unusual globally. It's not unprecedented, but it is unusual globally.

Was it ever thus in South Africa? No, Well, I mean, you know, I think we're beginning to see more and more more women and and hopefully they'll be more following me. Are there any plans to change policies at the Johannesburg Stock Exchange in order to solicit more foreign investment. We rarely pride ourselves from an exchange perspective of being very open to attracting in specifically top international companies listing on

in South Africa. As an example, a b in bev, the world's largest brewer, took twenty seven days from the time that they spoke to us the first time to the time that they were listed. They said, of their four global listings, it was the most constructive world class listings process they've ever had. From an investor perspective, we only hear complementary things from investors. But in my mind, if investors need us to to shop and that what

we do, then we're always open. Because you're publicly traded, publicly traded company for sure, and that's I think a good thing for an exchange to actually live part of its own business model, don't you think so? In terms of some of the upcoming what's the next South Africa? What are the next big companies? I think technology, for example, there's in many parts of Africa the continent now they're

they're tech startups of all shapes and sizes. What's what's what's really interesting right now in South Africa and what's interesting in South Africa is to start to see the real big South African entrepreneurs look to use their South African base as a platform for expanding on the continent.

They become a proxy for the African story and that's going to be a good news for the for for investors through the j C because they can use a world class environment to access the African story, the commodity story. Just last word to you. I mean, because we talked a little bit about gold, but there's also a lot of thermal call for example in South Africa, there is

a there are a lot of different commodities. But the commodity space and is a is a pretty difficult space to actually to to actually deeply innovate in, especially in the labor with the labor space, so we have we are going to have to work quite hard to unlock and ride that commodities wave. I think I want to thank you very much for coming in and spending time with us. The chief executive of the Johannesburg Stock Exchange, Nikki Newton King the johannes Stock Exchange up twenty seven

and a half percent so far this year. You're listening to take King Stock. I'm pim Fox, my co host Kathleen Hayes, and this is Bloomberg. Yeah,