8 November 2007
South Africa’s stock exchange, ranked among the top 20 exchanges worldwide in terms of market capitalisation, celebrated its 120th birthday on Thursday.
The JSE Limited – originally the Johannesburg Stock Exchange – was established on 8 November 1887, a year after the discovery of gold on the Witwatersrand, to raise capital for mining operations.
Today the JSE’s total market capitalisation is over R6-trillion, with approximately 400 companies listed. Seventeen of these companies listed between July and September, raising R1.6-billion in capital – in sharp contrast to a 22% decline in listings worldwide in the third quarter.
In 2006, foreigners bought a record net R73.7-billion worth of shares on the JSE, the exchange’s All Share index rocketed 38%, and its AltX exchange for smaller companies reached critical mass just three years after its birth.
According to JSE chief executive Russell Loubser, recent years have seen investors extending their interest beyond the vibrant equity market, to the point where derivatives trading now accounts for more than 20% of the JSE’s revenue.
This year, the JSE overtook its Indian counterpart as operating the largest single stock futures (SSF) market in the world in terms of volume of contracts traded.
The JSE’s other markets, all created in the last decade to meet the needs of specific investors, include Africa’s most active agricultural products market, and an interest rate exchange, Yield-X, which is the first of its kind in the world for trading both the cash spot bond as well as interest rate derivative products on one trading platform.
The JSE also launched a currency futures market this year, allowing individuals to trade in the currency futures market through a regulated exchange for the first time in South Africa.
And on 2 April, the London Stock Exchange’s new TradElect trading platform had its world debut in Johannesburg after the LSE extended its IT contract with the JSE for a further five years.
The JSE’s emphasis over the last 10 years, Loubser said in a statement on Wednesday, “has been to focus on ensuring that we have quality issuers to offer both local investors and an increasingly international market.
“With investors becoming more discerning, it is quality rather than quantity that counts.”