JSE Securities Exchange


JSE Securities Exchange

The JSE Securities Exchange (previously the Johannesburg Stock Exchange) is the largest stock exchange in Africa. It is situated at the corner of Maude Street and Gwen Lane in Sandton, Gauteng, South Africa. In 2003 the JSE had an estimated 472 listed companies and a market capitalisation of US$182.6 billion (€158 billion) as well as an average monthly traded value of US$ 6,399 million (€5.5 billion). As of 30 September 2006, the market capitalisation of the JSE was at US$579.1 billion. The JSE is presently the 16th largest stock exchange worldwide.

The JSE is planning to create a pan-African exchange by initially enabling investors to trade in shares from Ghana, Namibia, Zimbabwe and Zambia. Later it will expand this across the rest of Africa.

History

The discovery of gold on the Witwatersrand in 1886 led to many mining and financial companies opening and a need soon arose for a stock exchange.

The "Johannesburg Exchange & Chambers Company" was established by a London businessman, Benjamin Minors Woollan and housed at the corner of Commissioner and Simmonds Streets. Out of this the JSE Securities Exchange was born on November 8 1887. By 1890 the trading hall became too small and had to be rebuilt but this too was outgrown. Trading then moved into the street. The Mining Commissioner closed off Simmonds Street between Market Square and Commissioner Street by means of chains.

In 1903, a new building was built for the JSE on Hollard Street. It was a storey building that took up an entire whole city block bounded by Fox and Main, Hollard and Sauer Streets.

After World War II, it became apparent that this building was again inadequate and in 1947 the decision was made to rebuild the stock exchange. It took 11 years before construction began and in February 1961 the second exchange at Hollard Street was officially opened. By 1963, the JSE became a member of the Federation International Bourses de Valeurs (FIBV).

In 1978, the JSE took up residence at 17 Diagonal Street near Kerk Street, Johannesburg. 1993 saw the JSE become an active member of the African Stock Exchanges Association. After 108 years, the open outcry system of trading was changed to a new era of high-tech computer trading on June 7 1996.

In September 2000, the Johannesburg Securities Exchange moved to its present location in Sandton, Gauteng and changed its official name to the JSE Securities Exchange.

In 2001 an agreement was struck with the London Stock Exchange enabling cross-dealing between the two bourses [cite web
url=http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2001/04/03/cnlse03.xml
title=LSE in deal with S Africa exchange
publisher=The Telegraph
accessdate=11 September
accessyear=2008
] and replacing the JSE's trading system with that of the LSE. [cite web
url=http://www.namibian.com.na/2001/April/marketplace/01E161CE0D.html
title=JSE, LSE sign development deal
publisher=The Namibian
accessdate=11 September
accessyear=2008
]

About the JSE

The JSE provides a market where securities can be traded freely under a regulated procedure. It not only channels funds into the economy, but also provides investors with returns on investments in the form of dividends.

The exchange successfully fulfils its main function - the raising of primary capital - by rechannelling cash resources into productive economic activity, thus building the economy while enhancing job opportunities and wealth creation.

The exchange is directed by an honorary committee of 16 people, all with full voting rights. The elected stockbroking members, who may not number less than eight nor more than eleven, may appoint an executive president and five outside members to the committee. Policy decisions are made by the committee and carried out by a full-time executive committee headed by the executive president.

The JSE is governed by its members but through their use of JSE services and facilities, these members are also customers of the Exchange. Although there is only one stock exchange in South Africa, the Stock Exchanges Control Act does allow for the existence and operation of more than one exchange. Each year the JSE must apply to the Minister of Finance for an operating license which vests external control of the exchange in the FSB.

The JSE makes use of fully automatic electronic trading on the JET System (Johannesburg Equities Trading). The System is an order-driven automated trading system acquired from the Chicago Stock Exchange, which has successfully installed the system at several other exchanges around the world.

The system was modified to suit the JSE's specialized needs. The order book is organized on the principle of "price/time" priority where orders registered in the book are ranked first at the best price and then in time sequence of the entry. The JET System has already resulted in significant improvements in transparency, price formation liquidity and cost of trading on the JSE.

In August 1997, the JSE launched the real-time Stock Exchange News Service (Sens) to enhance the market transparency and investor confidence. Initially, it was optional for listed companies to use the Service during its two-month trial period. From October 15, augmented JSE listing requirements oblige companies to disseminate any corporate news or price-sensitive information on the Service prior to using any other media outlet. Sens is carried by all the major wire services.

A Memorandum of Understanding was signed between the banks (represented by BankServ) and the JSE on 2 May 1996, to establish an electronic settlement system for the South African equities market. Known as STRATE (Share Transactions Totally Electronic), this development will be enabled through the dematerialization of equity scrip in a Central Securities Depository. This will facilitate settlement and the transfer of ownership by electronic book entry. The electronic system is vital to enhance the security of settlement in the market and bring South Africa in line with international practice.

Hours

JSE's normal trading sessions are from 09:00am to 03:00pm on all days of the week except Saturdays, Sundays and holidays declared by the Exchange in advance. []

Alternative Exchange

The Alternative Exchange is a stock exchange that was founded as a division of the JSE in order to accommodate small and medium sized high growth companies. Its website is accessible from the front page of the main website of the JSE. The Alternative Exchange is known as AltX.

Ownership

The bourse is operated by the JSE Limited, a company that listed on its own main board in June 2006. [cite web
url=http://www.citizen.co.za/index/article.aspx?pDesc=18011,1,22
title=JSE lists on itself
publisher=The Citizen
accessdate=30 July
accessyear=2008
]

ee also

* Bond Exchange of South Africa
* Companies traded on the JSE
* Diamonds as an investment
* Gold as an investment
*List of stock exchanges
*List of African stock exchanges

External links

* [http://www.jse.co.za Official JSE Website]
* [http://www.altx.co.za/index.jsp JSE Alternative Exchange official website]

References


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