South Africa's Stock Market

South Africa's Stock Market

May 29, 2022 6 Views


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The JSE Limited (formerly the JSE Securities Market and the Johannesburg Stock Exchange) is Africa’s most important stock exchange. After moving from downtown Johannesburg in 2000, it is now located in Sandton, Johannesburg, South Africa.

The JSE has 442 firms listed, and they are denominated in South African rands. The JSE had a market capitalization of US$1,005 billion as of August 2020.

South Africa’s economy is the continent’s second-biggest. It is, nevertheless, the continent’s most industrialized, technologically advanced, and diverse economy.

South Africa is one of just eight nations in Africa with an upper-middle-income economy. Subsequently, 1996, when international sanctions were lifted after more than a decade, South Africa’s Gross Domestic Product has nearly quadrupled, peaking at $400 billion in 2011, but has since fallen to below $283 billion in 2020.

Within two decades following the end of apartheid, foreign exchange reserves rose from $3 billion to over $50 billion, resulting in a diversified economy with a rising and large middle class. State-owned companies (SOEs) play a major part in the South African economy, with the government having a stake in roughly 700 SOEs in a variety of industries.

In 2016, inefficient government bureaucracy, restrictive labour regulations, a shortage of skilled workers for some high-tech industries, political instability, and corruption were the top five challenges to doing business in the country, while the country’s banking sector was rated as a strong positive feature of the economy.

The country is a member of the G20 and the only African country in the organization. The arrival of Dutch immigrants in 1652, originally dispatched by the Dutch East India Company to construct a provisioning station for passing ships, marked the start of South Africa’s official economy.

With the advent of French Huguenots and German immigrants, the colony grew in size, and certain colonists were given the freedom to pursue commercial farming, resulting in agriculture’s domination of the economy.

The colony was acquired by the British at the end of the 18th century. This resulted in the Great Trek, which pushed farming farther onto the continent while also establishing the Transvaal and Orange Free States as autonomous Boer republics.

Diamonds were discovered in Kimberley in 1870, and some of the world’s biggest gold reserves were discovered in the Witwatersrand region of Transvaal in 1886, rapidly changing the economy into one dominated by natural resources.

As a result of the Boer War, which saw Boer women and children imprisoned in British-built concentration camps, the British seized the territory. During this time, the country began to industrialize, which included the formation of the first South African labor unions. The government avoided using economic populism as a strategy.

Inflation has been reduced, governmental finances have been stabilized, and some foreign money has been recruited.

However, the rate of increase remained low. President Thabo Mbeki pledged at the start of 2000 to stimulate economic development and foreign investment by loosening restrictive labor regulations, speeding up privatization, increasing government expenditure, and slashing interest rates significantly from 1998 levels.

Organized labor was a vocal opponent of his policies. From 2004 onwards, economic growth accelerated substantially, with increases in both employment and capital formation.

In April 2009, amid fears that South Africa would soon join the rest of the world in the late-2000s recession, Reserve Bank Governor Tito Mboweni and Minister of Finance Trevor Manuel disagreed: whereas Manuel predicted a quarter of economic growth, Mboweni predicted further decline: “technically,” he said, “that’s a recession.”

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