Johannesburg Stock Exchange
South Africa’s banking and financial infrastructure is world class. At the pinnacle of this sophisticated system is the Johannesburg Stock Exchange (JSE), the country’s equity, currency and commodity derivative trading exchange.
The JSE was established in 1887, the year after gold was discovered in Johannesburg, to raise the capital required to develop the mining industry. Today it is one of the 20 top exchanges in the world.
A flurry of new legislation was passed in 1995 to allow for foreign membership on the JSE, and the following year an automated trading system was introduced and the open-cry trading floor was closed.
The Johannesburg Stock Exchange building. Photo courtesy Pavel Tcholakov
The years since have been hugely exciting for the JSE. In line with South Africa’s open democracy and policy of broad-based black economic transformation, the exchange has created products that make it easier for small investment houses and individuals to trade. In addition, the JSE moved from its landmark building in Diagonal Street, in downtown Johannesburg, into premises in the heart of Sandton’s business district.
The successful launch of Satrix, an exchange-traded fund made up of the top 40 companies on the board, was followed up with Satrix Fini, which tracks the top 15 financial counters, and Satrix Indi, comprising the top 25 industrial shares. These products have opened channels for new entrants in the investment market.
Modernisation has been continual, with the acquisition of Safex, the South African Futures Exchange, the launching of Strate, an electronic settlement system, and a formal partnership with London’s FTSE updating the way indices are calculated and transforming sector classification.
Corporate governance was addressed comprehensively in 1999, with the adoption of the Insider Trading Act. Then the Alternative Exchange, Alt-X, was launched, allowing for small- and medium-sized companies to access development capital. Alt-X was soon followed by SRI, the Socially Responsible Index, which allows investors with social concerns to make better-informed decisions.
The exchange has also introduced the Sharia Index, which gives Muslim investors opportunities within non-debt financed enterprises. The latest offering is the Africa Board, which trades in shares in African markets.
The JSE offers online courses to help educate investors. Modules include Stock Market for Beginners, Shares Made Easy, Single Stock Futures, Currency Futures and Equity Options. And if you register on the JSE’s website for a MyJSE account, you will gain access to currency indicators and prices, and SENS information and prices.
The JSE also hosts retail investor-focused showcases, which explain everything from the basics of investing to the retail products that the JSE offers. The JSE holds the Investors’ Schools Challenge every year. It is well supported by local media and followed by Joburg’s financial services professionals.
These initiatives are designed to develop an interest in investing among South Africans and help interested amateurs learn about a career in investment.