Headquartered at 1 Exchange Square in Johannesburg, South Africa, the Johannesburg Stock Exchange (JSE) is a premier destination for individuals seeking exposure to the African continent. Whether targeting derivative, debt, or equity products, investors frequently engage the JSE with the goal of capitalising upon the growth potential of broader Africa.
Licensed and governed by the Financial Markets Act of 2012,  the JSE provides an avenue by which corporations can raise operating capital. Subsequently, the exchange features diverse array of large, medium, and small-cap offerings. In addition, the JSE is a globally prominent, exclusively digital, public trading venue.
History Of The JSE
Founded on 8 November 1887 by Benjamin Wollan, the JSE has served the needs of domestic and international investors for more than 130 years. It was conceived during the first South African gold rush, and it quickly became a prominent regional financial center. Its primary initial function was to raise the money needed for expansion of the South African mining industry.
Over the years, the JSE's scope of operations has evolved into that of a modern capital market. In 1963, membership to the World Federation of Exchanges (WFE) ensured that the market operated in adherence to globally standardised practices. The JSE instituted electronic trading systems in the early 1990s, staying on the technological cutting-edge of finance.
The early 2000s were a period of aggressive expansion for the JSE, headlined by several important corporate developments:
- 2001: Acquisition of the South African Futures Exchange (SAFEX)
- 2003: AltX launches, specialising in small and mid-cap listings
- 2005: The JSE demutualised and listed itself for public trade as JSE Limited
- 2009: Acquisition of the Bond Exchange Of South Africa (BESA)
In line with modern industry standards, the JSE conducts business in an exclusively digital format instead of on traditional trading floors. Five markets are currently offered to investors including equities and bonds, as well as derivatives facing the financial, commodity and interest rate asset classes.
Market Segments And Listing Requirements
A self-proclaimed "ideal destination to tap into large pools of local, global and institutional investor capital," the JSE is comprised of three market segments. Each is defined by significant capitalisations:
- Main Board: The Main Board is the JSE's primary listing class. Designed with large-cap companies in mind, the Main Board accounts for more than R250 billion in assets.
- AltX: AltX offerings are designated as being small and mid-cap listings. AltX is the secondary equities marketplace on the JSE, valued at more than R48.9 billion.
- Debt Market: The JSE's bond products are extensive and represent the largest sector of the market. With more than R1.0 trillion in listed bonds, the debt offerings available on the JSE are especially attractive to institutional participants.
The process for a company to become listed on the Johannesburg Stock Exchange is relatively straightforward. Its ownership simply needs to express interest to the JSE, find a Main Board or AltX sponsor, complete the necessary documentation and embark on a capital-raising tour. However, the criteria for final acceptance to the exchange varies according to whether an entity is applying for listing as a Main Board or AltX entity.
Below are the JSE's requirements for a firm seeking membership to the Main Board:
- Subscribed capital must exceed R50,000,000
- No less than 25,000,000 shares outstanding
- Submit to an audited profit history for the preceding three financial years, with the final year showing a gross profit of at least R15,000,000
- 20% of each security type must be publicly held to preserve liquidity
Firms that desire to list on AltX are subject to several unique guidelines that must be adhered to for acceptance:
- A Designated Adviser (DA) must be appointed
- Share capital must exceed R2,000,000
- A minimum of 10% of each class of shares must be publicly held to ensure liquidity
- Corporate directors must complete the AltX Induction Program
- An executive financial director must be appointed
- A profit forecast must be produced for the remainder of the financial year and the following year
From a regulatory standpoint, the JSE operates under the supervision of the Financial Sector Conduct Authority (FSCA) and Prudential Authority (PA). The dual regulators subscribe to the "twin peaks model" of oversight that was adopted on 1 April 2018. Accordingly, the FCSA is commissioned with supervision of the equities market infrastructure, while the PA is charged with the oversight of banking institutions, insurance companies and the debt market. The PA exists as a division of the South African Reserve Bank (SARB).
Corporate Listings And Products
Ranked as the 17th largest stock exchange in the world by market capitalisation, the JSE operates as the leading trading venue in Africa. As of year end 2017, the exchange boasted an aggregate market cap of US$951 billion and was comprised of 472 individual corporate listings. While featuring only about half of the capitalisation of the 10th ranked Frankfurt Stock Exchange, the JSE sits just ahead of the Madrid Stock Exchange, Taiwan Stock Exchange and Brazil's BM&FBovespa on the top 20 global rankings.
The JSE features a diverse array of corporate listings and services a variety of consumer sectors. Prominent businesses in the technology, mining, agriculture, banking and food/beverage industries are all represented. In addition, multiple international mega-companies are traded in some capacity on the exchange. Below is a sample of active listings classified by sector: 
- Mining: Glencore Plc, DRDGOLD Limited, Bauba Platinum Limited
- Technology: Silverbridge Holdings Limited, Datatec Limited, M-FiTEC International Limited
- Food/Beverage: Nutritional Holding Limited, Shoprite Holdings Limited, Oceana Group Limited
- Financial Services: PSG Group Limited, RECM and Calibre Limited, Transaction Capital Limited
The top 10 companies listed for public trade are a viable cross section of the above sectors. Featuring international monoliths AG InBev and Prosus N.V., the JSE serves as a viable avenue for investment in multinational corporate offerings.
In addition to stocks, a variety of exchange-traded funds (ETFs), exchange traded notes (ETNs) and asset-backed securities (ABS) are readily available for trade on the JSE. These instruments are diverse in function, with some of the most popular facing wheat, palladium and domestic equity indices.
The Johannesburg Stock Exchange (JSE) is the leading marketplace for equities, debt and derivatives trading on the continent of Africa. Featuring more than 350 corporate listings on its Main Board and AltX, the JSE ranks as a top-20 global exchange. It also features an exclusively digital trading infrastructure, which makes it a popular destination for international investors seeking exposure to the growth potential of developing African regions.
Russell Shor (MSTA, CFTe, MFTA) is a Senior Market Specialist at FXCM. He joined the firm in October 2017 and has an Honours Degree in Economics from the University of South Africa and holds the coveted Certified Financial Technician and Master of Financial Technical Analysis qualifications from the International Federation…