The JSE reached a new record on Tuesday as high metal prices continued their bull run in the new year and the impending listing rules overhaul continued to stoke investor sentiment.
The all share index, the broadest measure of the South African stock market performance, peaked at 119,053 points on Tuesday — more than 40% higher than the 84,460 points the index closed at on January 2 2025.
The all share was one of the world’s best-performing stock indices in the world last year, with the bourse adding R5-trillion in value in 2025 — cementing its place as Africa’s largest stock exchange.
All Weather Capital portfolio manager Chris Reddy said Tuesday’s trade felt like foreign “inflows coming back into SA” with turnover on the JSE nearly double that of the same day last year, at R28bn.
The rally in the equities market has been matched by an equally strong showing by the rand, which reached its best level against the dollar since August 2022 on Tuesday.
The rand’s performance, together with declining fuel prices, which are expected to reach a four-year low this week, opens room for further interest rate cuts, which would boost consumer spending and credit extension to households.
Sentiment towards South African equities has also been boosted by the bourse’s announcement that the simplification project it started in 2022 is ready to roll out. Implementation is set for Tuesday next week in a move meant to enhance the modernity and competitiveness of the bourse’s regulatory regime and bolster equity capital raises.
This comes after the Financial Sector Conduct Authority (FSCA) approved the amendments to the JSE listing requirements.
Under the new requirements, the shareholder approval threshold for non-pro rata issuances of shares for cash (by way of a general or specific authority) has been dropped from 75% to an ordinary majority of 50%+1.
Yaniv Kleitman, a director in the corporate & commercial practice at Cliffe Dekker Hofmeyr, said the reduction in the approval threshold marks one of the most consequential changes.
“Of course this does not derogate from the Companies Act requirement of a special resolution (75%) if the share issuance happens to fall within the ambit of section 41 thereof, namely an issuance to related parties (as defined in the Companies Act) or to directors or prescribed officers, subject to the applicable exceptions, or where the 30% rule is triggered,” he said.
“This arguably is the boldest of the amendments to the listing requirements for many years and will greatly facilitate equity capital raises. It aligns the listing requirements with other top stock exchanges of the world.”
The aim of the simplification project is to ensure the requirements are fit for purpose, allowing an effective and appropriate regulation level.
The new listing requirements have been reduced from 454 pages to 172 pages. The ambitious project, spearheaded by outgoing JSE CEO Leila Fourie, is a strategic initiative designed to reverse decades of declining listings and create a more accessible, investor-friendly environment.
Among the criticisms levelled at the JSE is that it has been largely an institutional market that lacks deep penetration by retail customers.
Exchanges worldwide are experiencing delistings as alternative sources of capital from private equity have a lot less onerous requirements.
The JSE, with a market capitalisation north of R23-trillion, has in recent years been evolving and aiming to make it easier and more cost-effective to list and remain listed on the bourse, which has more than halved in size since 2000.
The JSE in November moved to rein in unnecessary dissemination of information on its news service, saying boilerplate updates on debt securities and exchange-traded funds (ETFs) are crowding out material information and inflating compliance bills for issuers.
The stock exchange news service (Sens), long a conduit for price-sensitive company information in real time, is increasingly clogged with generic publications that are of little use to most market participants.
The JSE is also consulting capital market participants for proposals on further reducing financial reporting costs, including the removal of the disclosure of headline earnings per share (HEPS) as a listing requirement.
Currently, HEPS must be included with the annual financial statements, and issuers incur the additional cost of assurance for the figure.
The exchange has noticed that many issuers calculate HEPS only for JSE regulatory purposes, despite requiring financial staff resources to prepare the figure. It is largely seen as a key measure of profit in South Africa.
This is after a study by the bourse found that 57% of the participants, being issuers and sponsors it surveyed said financial reporting and auditor fees are the most costly items of being listed on the JSE.
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.