The Financial Sector Conduct Authority (FSCA) last week approved amendments to the JSE's listing requirements that will allow the bourse to split its main board into two distinct segments. What does this mean for investors? Is it ideal? Will it work?
Listen to this article 5 min Listen to this article 5 min It's very obvious to market watchers that the JSE is at once a grand success and a fading rose. It is, by huge margins, the largest stock exchange in Africa and the total value of the stocks on the bourse is massively larger than the GDP of the country - a rare phenomenon around the world.
On the negative side, delistings have become a depressingly common occurrence. When I started working as a financial journalist way back when, there were more than 600 company stocks on the exchange, as opposed to listed funds and so on. For a time, the number was held by large numbers of real estate investment trusts, basically property funds.
But about 15 years ago, the number of listed stocks started dropping, and now the situation is chronic. Twenty years ago there were 470 or so stocks, with a market cap of $182-billion, Wikipedia tells us. Today there are around 270 stocks, but the market cap is $1.3-trillion.
How can that be, you ask? Smoke and mirrors, I say. The total market cap of the exchange is fabulously boosted by dual listings and cross-holdings...
