Original article appearing here.

In a year in which stock exchanges around the world lived through terrifying times of financial paralysis, the JSE showed its resilience by weathering the storm. The bourse operator increased its revenue for the year to December 2009 by 8 percent to R1.156 billion. Our dividend was maintained at R1.92 a share.

The JSE Limited's results have been explored in depth by the financial media so I will not dwell on them further in this column. However, chief executive Russell Loubser and I recently travelled around the country holding report-back meetings. At these presentations, we emphasised the fundamental imbalances that are prevailing in world markets and just how fragile they are. We also pointed out that when the global banking system imploded it was the JSE's surveillance capability that enabled safe short selling and the soundness of our banks that saved our country from severe financial stress.

One of the questions frequently asked at these meetings was why there has been limited activity on our AltX board for small and medium-sized companies.

In times of recession there is always a "flight to safety" to the big counters, where investors feel that risks, inherent in times of financial stress, will not be as drastic. Yet who would have believed that at the end of 2008 the share price of Anglo American would be down 50 percent and that other JSE stalwarts, such as BHP Billiton, Sasol, Anglo Platinum, AngloGold Ashanti, Absa, Standard Bank and Kumba Iron Ore would have dropped by similar percentages?

In my early stockbroking days I was personally involved with four businessmen: Raymond Ackerman, Donny Gordon, Bill Lynch and Brian Joffe, who built companies over the past 30 years that are large by any international standards. All these men had to start somewhere.

Pick n Pay listed at 66c in 1968. The issue price equivalent now would be 0.0039c. Since 1968 the share price has split a cumulative 168 times. The Imperial Group listed in February 1987 at 69c a share.

Where would we be if we didn't have AltX? Without a platform for more than 70 small and medium-sized companies to raise capital. These listings also provide the companies with the money to make acquisitions, a higher profile in the media and, through share options, the ability to retain and motivate staff. The market capitalisation of these companies ranges from R10 million to more than R1 billion.

Contrary to perception, AltX is not biased towards construction shares and, in fact, mirrors a broad spectrum of the South African economy. Broken down by the number of companies in each sector: 21 percent are telecoms and technology, 18 percent construction and materials, 16 percent financials, 13 percent consumer goods and services and 21 percent other industrial. Mining comprises only 8 percent of the companies on the board.

I would say that AltX is probably more a barometer of the South African economy than the Top 40 stocks. The smaller stocks accurately represent what is happening on the ground in South Africa. If South Africa is hurting, so is AltX.

An AltX listing is just one step in the evolution of a company. Since AltX opened its doors in October 2003 six companies have successfully made the leap from AltX to the main board.

The pipeline of aspirant businesses interested in listing on AltX is strong and many are preparing themselves for a listing when the economy improves. Bear in mind that South African equity markets traditionally lag their peers.

When I look at the fundamentals of most of the companies listed on AltX, that is, the balance sheets, income statements and cash flows, there is a great deal of inherent value. There is no doubt in my mind that by carefully selecting and monitoring a number of AltX stocks an investor has a very good chance of achieving the same sort of gains over the next 10 years as would have been attained by investing in, say, a Bidvest 10 years ago.

I note with interest the initiative by Business Leadership SA to ask South Africa's most successful entrepreneurs what it would take to double the size of their businesses in the next 10 years - with the larger vision of doubling the size of our economy by 2040. I would suggest that much of this discussion should involve the management of AltX companies.

If the 2040 vision is achieved, a number of these companies will by then be the size that Pick n Pay, Liberty Group, Imperial and Bidvest are today.

Evidence that the JSE competes with the best global exchanges when it comes to developing innovative products and services has been our development of the derivatives market. Our latest offering for investors is to trade in gold, platinum and sweet crude oil on the JSE's commodity derivatives market.

Previously only agricultural commodities were offered and investors were dependent on using their foreign exchange allowances, which are subject to exchange control regulations.

Trading of these three commodities is the result of the extension of the existing licensing agreement that the JSE holds with the CME Group - the world's largest derivatives market.

Investors can assess benchmark gold prices from the CME Group's Chicago Mercantile Exchange and platinum and crude oil prices from its New York Mercantile Exchange.

South Africa is the largest platinum producer and the fourth-largest gold producer so it makes sense to offer South African investors, as well as gold and platinum producers, the opportunity to gain exposure or hedge their production.

Other benefits are that contracts are rand denominated, settled in rands and no foreign exchange permission is required for corporations or individuals. In addition, smaller contract sizes have been adopted for the South African market and trading on the exchange offers guaranteed settlement, transparency and daily position revaluation. Any South African can trade these derivatives through a JSE-registered commodities broker.

In the present sociopolitical climate, dinner party conversation tends to concentrate on the World Cup, potholes, and wishful thinking for the commencement of lifestyle audits of our politicians. However, it is perhaps appropriate to remind ourselves of some of the areas of excellence in the country, in particular, the smooth way in which our economy is managed. Just compare our budget deficit with those currently being presented in Europe.

Humphrey Borkum is the chairman of JSE Limited