JSE Limited
JSE Limited is Africa’s largest stock exchange located in Johannesburg. Previously known as JSE Securities Exchange and the Johannesburg Stock Exchange, it is situated at Maude Street, Sandton area of Johannesburg. In 2003, there were 472 companies listed in the JSE. The combined market capitalization of these was US$ 182.6 billion (€ 158 billion) and the average traded volume in the JSE was US$ 6.4 billion (€ 5.5 billion). By 30th September 2006, the market capitalization of the listed companies had increased to US$ 579.1 billion making it the 16th largest stock exchange in the world.
The JSE plans to create a pan-African exchange to enable trade in shares of companies in other African states. Initially, the plan is to cover covers of Zimbabwe, Ghana, Namibia and Zambia but the long term plan is to expand and cover the rest of Africa.
History
The history of JSE goes back to the times when gold was discovered in the sedimentary rocky hills of Witwatersrand in 1886. The discovery of gold led to the formation of mining companies as well as financial companies and consequently, the need of having a stock exchange for trading shares of these companies.
A London businessman, Benjamin Minors Woollan, took the initiative and established the Johannesburg Exchange & Chambers Company. A year later JSE was formed out of this and by 1890 there were so many traders that the hall became too small to accommodate all of them. Rebuilding the hall did not make a big difference as that too became small as the number of traders kept growing and people had to trade on the street. The exchange was located at the corner of Commissioner Street and Simmonds Street. To allow trading to continue, the Mining Commissioner was forced to close Simmonds Street by putting up chains.
Eventually, JSE was shifted to a new building built specially for the exchange on Hollard Street in 1903. The exchange outgrew even this building by the end of World War II although the building as big as a full city block. A decision was taken in 1947 to rebuild but it took eleven years for construction to begin. After a long wait, the JSE shifted to a new building at Hollard Street in 1961. The exchange had to move again in 1978 and this time to 17 Diagonal Street, Johannesburg.
JSE became a member of FIBV (Federation International Bourses de Valeurs) in 1963. In 1993, JSE joined the African Stock Exchanges Association as an active member.
On June 7, 1996, the JSE dropped the 108 year old open outcry trading system and changed over to electronic trading.
The exchange moved to its present location in Sandton in September 2000, which was also when the Johannesburg Securities Exchange officially changed its name to JSE Limited. The next year JSE entered into an agreement with the London Stock Exchange (LSE) for replacing its trading system with that of LSE and to enable cross dealing between the two exchanges.
Services and Governance of JSE
The JSE provides a trading platform for trading in shares and other securities in a regulatory environment. It also helps companies raise capital from the market.
The exchange is managed by a committee of 16 honorary members elected by member stock brokers. The elected members cannot be less than eight or more than eleven and must necessarily appoint five committee members from outside the stock broking community. All policy decisions taken by the committee are implemented by an executive committee.
The governing members of JSE are also its clients for the services and facilities offered by the stock exchange. Although the Securities Services Act of 2004 that repealed the earlier Stock Exchanges Control Act allows setting up of more than one exchange, the JSE is currently the only stock exchange in South Africa. However, the Johannesburg Stock Exchange must apply to the Ministry of Finance every year for renewal of its license. The Ministry of Finance controls the stock exchange’s operation through the Financial Services Board (FSB), South Africa’s regulatory body that is responsible for regulating the non-banking financial institutions.
Trading Platform
The first electronic system of JSE was JSE JET, which was replaced by a new trading system called JSE SETS in May 2002. In April 2007, JSE SETS was replaced by a new electronic system called JSE TradElect.
JSE TradElect is a system licensed from the London Stock Exchange that has been modified specifically for JSE. It is a central order book trading system based on order placement with opening, closing and intraday auctions. JSE TradElect provides a hierarchical system of access to sectors, segments and securities.
JSE News Service
In August 1997, JSE launched a real-time news service called SENS (short for Stock Exchange News Service). The basic purpose of the service was to boost investor confidence by enhancing transparency of procedures. Initially, listed companies had the option of using the service for a trial period of two months. Later, in October, the listing requirements for companies were changed to make it compulsory for companies to release all price sensitive information first to SENS before giving it out to any other news media. All major wire services carry SENS.
Depository Services
Strate Ltd, a depository service that started operations ten years ago, is now the licensed securities depository for electronic settlement of securities traded in JSE. These include equities, bonds and a wide range of derivative products including warrants, Exchange Traded Funds (ETFs), tracker funds and retail notes. The most recent addition to its portfolio of services is settlement of securities related to money markets. Services offered by Strate Ltd are in accordance with the Companies Act and Securities Services Act of 2004.
Working Hours
JSE is open for trading on five days a week and sessions start at 9:00 am and end at 5:00 pm, South Africa time. Apart from Saturdays and Sundays, the exchange is closed on holidays that the exchange announces in advance.
A complete list of companies whose shares are listed with JSE can be accessed at the official website of the JSE as well as websites dedicated to providing market information and other websites dedicated to market trading in South Africa.
The JSE also has an alternate exchange, AltX. Altx is a wholly owned subsidiary of JSE Ltd. It a public exchange meant exclusively for small and medium companies in South Africa and operates parallel with JSE.