Issued by: HKLM


Speaking at an informal function arranged by HKLM Exchange where JSE executives, including CEO Russell Loubser, John Burke, Director of Issuer Services and senior executives, Andre Visser and Doug Doel also answered questions from the floor, Loubser said the JSE wouldn't waver from its policy that no-one would be disadvantaged by any changes in financial reporting legislation.

He further commented that “until the socio-economic landscape changes to the extent that there is widespread access to the internet, computers and other technologies, printed media, especially the national newspapers will remain one of the primary sources for the publishing of company information.”

Karin Boshoff of HKLM Exchange remarked: “The big question is whether printed annual reports and related publications still have a place in our perceived ‘e-society'? During the last few years, research from various sources, countries and organisations has shown that both shareholders and analysts still prefer to receive a printed format, which remains the primary source of information regarding the company. The convenience of obtaining data and information via websites, e-mail, SMS etc cannot be disputed but it's only a quick reference tool.”

Whilst Loubser admitted that the Stock Exchange News Service (SENS) "was not perfect", he said that a project to improve the system would be implemented within the next 18 – 24 months. One possibility currently under investigation is for the JSE to share the responsibility for the approval of information with company sponsors and the merchant banks to expedite the reporting process.

He also said that the JSE's SENS, unlike similar systems operated by most other stock exchanges around the world, does not operate as a profit centre and is provided free to companies.

Loubser also reminded the audience that the JSE had come under fire – unfairly so – for its stance on its financial reporting requirements, and had therefore proactively initiated a forum between industry players – and the critics – to propose alternatives but that the initiative had been fruitless. “No-one came up with any better suggestions or solutions,” he said, “and hence the status quo has remained.”

In response to a question whether the recent surge in private equity activity posed any danger to the JSE, Burke said that while the loss of companies such as Edcon was obviously not ideal, it was part of the natural cycle of business. “Private equity firms look for businesses that they believe are undervalued, and once they have structured the deal, they often use the JSE as an exit vehicle. It works both ways,” he said.

Burke also said he sensed an "over-exuberance" in the market reminiscent of the 2001/2 boom where organisations rushed to list for all the wrong reasons. “While we do try and accommodate ambition as far as possible, we won't make the mistakes of the nineties again,” he said. “We've been through a lot of pain to make the JSE a world-class exchange and our listing requirements are among the soundest in the world.”

The discussion covered the merits and demerits of listings in America as opposed to Europe, with the general view being that listing requirements and reporting processes have become so draconian and litigation so prevalent in the US that investors are backing off. By way of illustration, Burke pointed out that in fact, most of the recent Initial Public Offerings (IPOs) had been outside the USA.

For further information on HKLM Exchange's regular discussion forums, please contact the head of HKLM Exchange, Karin Boshoff on (011) 461-6600. HKLM Exchange is the specialist financial communications unit of brand company, HKLM.

Visit our PRESS OFFICE: HKLM is an entrepreneurial and dynamic leader in the branding arena, with unrivalled expertise in the field of brand strategy, design and implementation. The company has led many blue-chip rebranding projects and innovative brand development initiatives around the world, earning HKLM the title of South Africa's foremost brand consultancy in the Financial Mail Adfocus 2004 awards. Through independent business units HKLM Connect, HKLM Exchange, HKLM Ignite and HKLM Digital, the team is able to bring the brand alive, both internally and externally through integrated communications, investor relations and the production of Annual Reports, brand behaviour and an array of digital mediums. HKLM's expanding footprint includes offices in Johannesburg and Cape Town, and internationally in Berlin, Dubai and Lagos. HKLM's four founding members have combined their diverse experience with a hand picked team of highly talented people. This is a group that does it differently and without bureaucracy, with a pace that is urgent and with the client's business at heart - for real and for the long term. In other words ... New Brand Thinking! - more....

[18 Jul 2007 14:39]

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