The Johannesburg Stock Exchange (JSE) says it intends to introduce a new block trading service, Block X, which will offer anonymous execution of large trades via the hidden order functionality of the exchange’s central order book.
The JSE said the new service was developed in response to its clients’ need to trade large blocks that can suffer high impact costs in lit markets due to declining average transaction sizes.
“Our large users have made it clear that while the transparent central order book has numerous advantages, they would also like hidden-order functionality. This is offered in other markets which offer trading in JSE-listed securities,” said Leanne Parsons, head of equity market at the JSE. “We hope Block X will prompt increased transactions in the local market, building on recent growth in trade figures which may have been buoyed by a revised equities billing system.”
The JSE implemented a new billing system designed to recognise both low value and high volume traders in March 2010.
The new fees partly prompted an 8% rise in the number of cash equity traded on the JSE over the previous period.
The total number of shares traded in March – 172, 433 transactions valued at more than ZAR26.1 billion – was the largest in the JSE’s 123-year history.
“As competitive pressure in the exchange environment builds, innovation becomes increasingly important,” added Parsons.