The JSE is a bumpy ride with serious ructions on world markets

Today we saw a huge decline on world markets including the JSE.

By close we were down about four-and-a-quarter per cent.

It started in Asia, went through Europe today, through Africa, we felt it in South Africa - and into the US.

The Dow opened around three per cent down.

How do we tell investors to calm down and breathe, when everything is as mad as it is?

The Money Show interviewed Leila Fourie, Group CEO of the JSE.

When markets go crazy as they've done today you'll find those stocks that are moving dramatically will go into a circuit breaker to enable price formation. We've seen the whole market going down except the safe haven play in mining. And we are likely to see a lot more volatility over the next few days. A circuit breaker is an automated algorhythm that runs and the traders will know that the stock has gone into what we call an auction. We also open and close the market with an auction, that is really to ensure that all parties who have an interest in pricing a certain stock, have the chance in a concentrated period to put their bids and offers in.

Leila Fourie - Group CEO, JSE

If the price that's being offered relative to the price that is trading is greater than a certain percentage then that will put us in an auction. A static breaker is kind of like a speed bump in the road just to say - slow down - is this genuinely what you want? Does everybody have an opportunity to equally respond to this massive spike?

Leila Fourie - Group CEO, JSE

We are seeing enormous volatility at the moment. Volatility is really the dynamic that keeps the capital markets going. One man's loss is another man's gain. We trade off volatility. Any major shock to the system does create volatility - that also creates opportunity for profit or loss.

Leila Fourie - Group CEO, JSE

Listen to the full interview below.

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