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What is the Johannesburg Stock Exchange?

JSE Limited

The definition of a Johannesburg Stock Exchange or JSE Limited refers to a stock exchange based in South Africa. Established in 1887, it is the oldest and largest stock exchange in Africa. 

The JSE is ranked in the top 20 largest stock exchanges in the world by market capitalisation. South Africa is an African economic powerhouse and one of the world’s most attractive locations for investors in emerging markets.

Key takeaways

  • The Johannesburg Stock Exchange is among the world's top 20 largest stock exchanges by market capitalisation

  • The primary functions of the JSE are to facilitate trade, set listing requirements and enforce trading rules

  • The JSE is regulated by the Financial Sector Conduct Authority (FSCA)

  • FTSE/JSE All-Share Index is the benchmark for South Africa’s stock market

  • The South African stock market is dominated by mining companies 

History of JSE Limited

The JSE was launched in 1887 during the first South African gold rush. Following the first legislation covering financial markets in South Africa, the JSE joined the World Federation of Exchanges in 1963. In 1996 the JSE upgraded from a traditional ‘outcry’ floor-based trading to a modern fully electronic trading, clearing and settlement system.

JSE Limited listed on the exchange under the ticker symbol ‘JSE’ in 2005. Since then it’s established itself as the largest stock exchange in Africa.

In 2003, the JSE launched the  Alternative Exchange (AltX), focused on small and medium sized high-growth companies. The JSE acquired the South African Futures Exchange in 2001 and the Bond Exchange of South Africa in 2009, enabling it to offer equities, bonds, financial derivatives, commodities and interest rate derivatives on one platform. 

The oldest companies on the exchange are the DRDGOLD (DRD) gold mining company, which listed on the JSE in 1895, two years earlier than Sabmiller (SA Breweries). 

As of September 2022, there were over 400 JSE-listed stocks. The biggest companies on the exchange were luxury goods retailer Compagnie Financiere Richemont AG (CFR), diversified miner Anglo American (AAL) and technology firm Naspers (NPN).  

What is the Alternative Exchange (AltX)?

The meaning of Johannesburg stock exchange’s Alternative Exchange (AltX) is that it is a special division of the JSE that caters to small and medium sized high-growth companies. The AltX is also known as the “growth board”.

The primary function of the AltX is to provide a platform for small and medium sized high-growth companies to list and raise capital under a regulated environment.

What are the functions of the JSE?

The JSE facilitates trading in stocks and financial derivatives. It acts as a frontline regulator by setting listings requirements, enforcing trading rules and reporting to South Africa's Financial Sector Conduct Authority (FSCA). The company also provides market data to market professionals and data distributors.

Who regulates the JSE?

The JSE is regulated by the FSCA. 

According to the JSE, a regulatory oversight framework called the ‘twin peaks’ model’ was introduced in the South African financial market. The two ‘twin peaks’ regulators, Prudential Authority (PA) and FSCA, were established on 1 April 2018. 

The PA, which is established within the Reserve Bank, is responsible for supervision of banks, insurance companies and market infrastructures. The FSCA is responsible for the supervision of the conduct of financial institutions, including market infrastructures, and replaces the financial services board.

JSE’s trading hours

The Johannesburg Stock Exchnage’s trading day runs Monday to Friday from 9.00am to 5.00pm South Africa standard time. 

What is the benchmark index for South Africa’s stock market?

The FTSE/JSE All-Share Index is widely considered the benchmark index to track the performance of listed companies in South Africa. 

According to index provider FTSE Russell, the FTSE/JSE All-Share Index represents 99% of the full market capitalisation of all ordinary securities listed on the main board of the JSE.

The MSCI South Africa Index is also considered a popular way to track the performance of large and mid-cap JSE stocks. The index covers 85% of the free float-adjusted market cap in South Africa.

What are other important stock market indices in South Africa?

The FTSE/JSE Top 40 Index is a blue-chip index that tracks the performance of the 40 biggest companies by market cap listed in South Africa. The FTSE/JSE Mid Cap Index and FTSE/JSE Small Cap Index are also a part of the FTSE/JSE Africa Index Series.

What are the top sectors on the JSE?

According to the FTSE/JSE All-Share Index, the top sectors by index weight, as of 31 August 2022, were as follows:

  1. Basic Resources – 22.4%

  2. Consumer Products and Services – 14%

  3. Banks – 14%

  4. Technology – 10.7%

  5. Personal Care Drug and Grocery Stores – 5%

What are the biggest companies listed on the JSE?

The top 10 constituents on the index, based on market capitalisation, as of 31 August 2022, were:

  1. Compagnie Financiere Richemont AG (CFR) – luxury goods retailer 

  2. Anglo American (AGL) – global mining company 

  3. Naspers (NPN) – internet company 

  4. Firstrand (FSR) – bank

  5. Prosus (PRX) – technology holding company 

  6. MTN Group (MTN) – telecom

  7. Standard Bank Group (SBK) – bank

  8. Sasol (SOL) – chemicals and energy firm

  9. British American Tobacco (BTl) – cigarette manufacturer

  10. Capitec Bank Hldgs (CPI) – bank

Note that index constituents are subject to change. Their inclusion is based on market capitalisation, minimum free float and liquidity criteria. Constituents are reviewed on a quarterly basis.

Financial markets are volatile and unpredictable. Remember that your decision to trade or invest should depend on your risk tolerance, expertise in the market, portfolio size and goals. Never trade money that you cannot afford to lose. Always conduct your own due diligence before investing.

FAQs

Who regulates the JSE?

The JSE is regulated by South Africa’s Financial Sector Conduct Authority (FSCA).

How much is JSE worth?

Based on JSE Limited’s closing price of ZAC10,609 on 16 September 2022, the company’s market capitalisation was ZAR9.15 bn ($517.7 m).

What type of market is JSE?

The stock market in South Africa is dominated by mining companies, with the basic resources sector contributing 22.4% of the index weight on the benchmark FTSE/JSE All-Share index.

 

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