Who is the JSE?
The JSE Securities Exchange South Africa (JSE) has a history going back to 1887. During this period, it has played, and continues to play, a crucial role in the commercial and economic development of Southern Africa by providing a market where entrepreneurs and established businesses in search of capital could connect with investors in search of investment opportunities.
Philosophy of the JSE
Companies on the JSE generate a substantial part of South Africa's economic activity. Here, companies from across the spectrum of industry and commerce gather to raise the public capital that will allow them to expand, in the process creating new jobs, products, services, wealth and opportunities.
Millions of South Africans have some stake in the JSE, whether they own shares directly or not. If you own an insurance policy, a retirement annuity, a unit trust or even a simple savings account, the JSE is where much of your money goes to make your investment grow. More and more South Africans are recognizing the benefits of direct ownership of shares on the JSE.
The JSE facilitates the channeling of funds from investors to companies in search of capital, in the process creating wealth, jobs and economic opportunities. As a national institution the JSE, through a variety of initiatives, seeks to make its services available to the nation as a whole. The best method of achieving this is to ensure that the nation is suitably educated in the advantages, and risks, of share ownership.
Functions of the JSE
Like all securities exchanges, the JSE fullfils essentially two functions:
• As a primary exchange for the raising of new capital by business through the sale of shares to investors;
• As a secondary exchange for the subsequent trading of those shares.
As part of the service, the JSE also provides data on shares trading which can be used for investment decisions.
Investors are more likely to invest in companies knowing that, for whatever reason, they can self their shares at short notice. They may have a sudden need for cash, or perceive that a company's fortunes have taken a turn for the worse. Whatever the reason, the knowledge that these shares can be sold at short notice (often, in a matter of minutes) provides comfort to investors and reduces the risk of investment.
Without a securities exchange, companies in search of new capital (the purpose of the primaryexchange) would find it difficult to attract investors (secondary exchange). The ease with whichshares can be converted to cash is known as liquidity, and is an essential function of any securities exchange.
Wide ranges of financial instruments are traded on the JSE shares, warrants, futures contracts, financial, agricultural and Exchange Traded Funds (ETF).