SA’s capital markets are well-developed but are failing to translate their depth into domestic economic growth and job creation, top financial leaders warned at the PSG #ThinkBigSA panel discussion this week.
The discussion formed part of PSG’s annual Think Big competition, which aims to spark ideas for sustainable economic development.
Despite the JSE being the 19th largest globally by market capitalisation (at 250% of GDP), much of its capital is not fuelling local investment or employment.
“More than 40% of our listed entities, in terms of market cap, derive their income outside SA,” said JSE outgoing CEO Dr Leila Fourie.
Fourie said meaningful change would require policy shifts to create a more tax-efficient environment for investors and small and medium-sized enterprises, as well as a stronger culture of financial literacy.
She noted SA’s markets remain dominated by institutional investors, with little speculative appetite for smaller companies, adding, “You need the have-a-go, speculative, really open-minded investors to start growing the small end of town, because that’s where the job creation sits.”
She warned persistent delistings, particularly among small- and mid-cap firms, reflect investors’ reluctance to support these companies, which are often undervalued due to limited price discovery.
Financial literacy is also critical. The JSE’s own outreach programme reaches 60,000 learners annually through a gamified trading simulation, but Fourie described this as “a drop in the ocean.” Countries like India and Thailand, she said, show how retail investor participation can be mobilised more effectively.
Echoing Fourie’s remarks, Reserve Bank head of economic research and MPC member Dr Chris Loewald said public investment continues to struggle to meet the country’s infrastructure needs.
“You’ve got a huge amount of demand for network services and public infrastructure and public investment, but the supply is failing, and we all know this,” he said.
He added other countries, such as Kenya, Colombia and the UK, offer examples of innovation in mobilising capital for development that SA could learn from.
“There’s really a menu out there that policymakers can take and develop. You’ve got to be willing to take some risks. You’ve got to be willing to invest in the systems that you need to make these things work right.”
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.