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JSE deploys continuity plans as COVID-19 spreads

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Dr Leila Fourie, group CEO of the JSE.
Dr Leila Fourie, group CEO of the JSE.

The Johannesburg Stock Exchange (JSE) says it is business as usual at the bourse amid the coronavirus outbreak in SA.

The bourse says it has implemented several business continuity management practices to minimise the adverse impacts of COVID-19.

There are several tech companies trading on the JSE, including the likes of Vodacom, MTN, Telkom, EOH, Alviva and Adapt IT.

SA’s minister of health, Dr Zweli Mkhize, in a statement this morning, announced the number of confirmed cases of COVID-19 in the country has increased.

According to the health department, there are now 116 cases of the coronavirus, which has been declared a national disaster by president Cyril Ramaphosa. Globally, at time of publishing, there were 199 054 confirmed cases of coronavirus, 7 991 deaths and 82 779 recoveries. The virus has spread to 159 countries/territories.

Among the new cases in the country is a two-year-old boy from the Western Cape who has not travelled internationally. This is the youngest confirmed case.

“It is notable there are eight cases of local transmission,” said Mkhize.

Rising numbers

In its statement, the JSE says SA is feeling the real impact of the rising numbers of the coronavirus pandemic in both its communities and economy.

It notes the JSE is focused on ensuring the health and well-being of its people at all times. In line with World Health Organisation guidelines and national government, the JSE proactively implemented several precautionary measures to ensure its employees are able to work safely and enable continuous trading in its capital markets.

The JSE is of the view that the most prudent approach is to keep markets open to enable all market participants to conclude transactions in accordance with their investment decisions and strategies.

It adds it will, unless unforeseen or exceptional circumstances arise, maintain its usual business operations and market hours to allow all investors to fully participate in the JSE’s markets.

“A fundamental part of running a fair market is to enable free market forces to play out. Our role at the exchange is to ensure we run orderly and fair markets, allowing companies access to capital and investors to trade in these volatile times,” says Dr Leila Fourie, group CEO of the JSE.

The JSE’s role, as a critical financial markets infrastructure in SA, is focused on ensuring the continued availability of its systems and it has worked extremely hard to ensure there has, to date, been no disruptions to any of its operations, says the stock exchange.

However, it says over the past two weeks, the JSE has experienced extreme market volatility and unprecedented volumes.

That being said, the JSE’s robust systems and committed market participants have ensured uninterrupted trading, clearing and settlement in all the securities listed and traded on its various markets, it notes.

The JSE is working closely with regulators, suppliers, members and various stakeholders in the capital markets ecosystem to ensure an integrated approach to contingency plans to safeguard integrity, continuity and uninterrupted access to the markets.

Ensuring system continuity

The exchange points out it has engaged with critical service providers and market participants to confirm business continuity plans and remote working capabilities to ensure system continuity and functionality in the event of an escalation in the pandemic locally.

According to the bourse, it is also closely monitoring capital adequacy and liquidity of market participants to ensure settlement and, therefore, investor protection.

The JSE has additionally widened its circuit breaker trigger points, the bourse says, explaining that circuit breakers trigger temporary halts in trading of securities during market volatility to provide investors with a brief pause to better understand market conditions and make, or adjust, their trading decisions accordingly.

The circuit breaker triggers on an instrument (stock or contract) level, which enforces temporary trading halts for periods of five minutes at a time.

“This is a difficult time for global markets, communities and families all over the world,” says Fourie.

“My concern is around what happens after this volatility has passed; the impact on the real economy and how this filters into our capital markets. As we attempt to make sense of and quantify the unknown, we will continue to engage with various stakeholders, our colleagues in government and broader business to find solutions as we together tackle the impact of COVID-19,” she concludes.

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