JSE All Share Index and the Johannesburg Stock Exchange
The FTSE JSE All Share Index is a South African equity index comprising the 40 largest companies listed on the Johannesburg Stock Exchange. The index is a partnership between the South African JSE Limited and British financial heavyweight FTSE Group, a wholly-owned subsidiary of the London Stock Exchange (LSE). This partnership makes investing in JSE companies more accessible to international investors, whilst generating significant revenues for both JSE Limited and the FTSE Group.
The JSE All Share index (ALSI) is priced in Rand (ZAR) and although it only contains around 30% of JSE listed companies, these companies make up more than 90% of JSE value by market capitalisation.
There is also a range of underlying indices based on size: the FTSE JSE Top 40 (large caps), the FTSE JSE Mid Cap and FTSE JSE Small Cap. The JSE All Share Index and Top 40 are highly correlated with comparable performance over 3 months, 6 months, 12 months, 3-year and 5-year horizons, with both indices delivering compound annual growth exceeding 8% since 2016.
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History of the JSE (ALSI)
Following the discovery of gold on the Witwatersrand in 1886, numerous mining and financial companies sprang up in and around Johannesburg and there was significant demand from investors for shares in these companies. Savvy London businessman Benjamin Minors Woollan saw an opportunity to meet this demand, founding the Johannesburg Exchange & Chambers Company and launching the JSE on November 8, 1887.
A far cry from today’s electronic trading, shares of JSE companies were originally traded from a large tent on the ridge and trading only occurred on Sundays when all mining activity was prohibited.
The JSE 40 held an immediate advantage over international exchanges in that listing your company was a relatively easy and cost-effective procedure: more than 60 companies listed on the JSE in November 1887 and this number grew substantially over the next few years, with more than 300 companies listed by January 30, 1890.
The JSE (SA40) has outgrown its location numerous times, with a total of 7 different locations over the years including a period where trading was conducted on the streets of Johannesburg, with an entire block of Simonds street cordoned off to facilitate open outcry JSE trading.
The JSE today
130 years later and although there are just 440 companies listed on the Johannesburg Securities Exchange, these companies are much more diverse and representative of the modern South African economy.
Mining still plays a dominant role, with Basic Resources firms making up roughly a third of listed companies by market capitalisation, but the Technology sector now accounts for almost a fifth of all value on the exchange, with significant contributions from Banks and the Consumer Products and Services sector.
JSE: SOL Sasol – a South African success story
Founded in Sasolburg, South Africa in 1950, Sasol Limited is an energy and chemical company with a global presence and one of the most popular stocks on the JSE All Share Top 40.
Sasol employs more than 30 000 people around the world, is South Africa’s largest corporate taxpayer and has a secondary listing on the New York Stock Exchange (NYSE).
Approximately 20% of JSE listed companies are dual-listed with another international exchange.
The FTSE JSE All Share Index
First launched in June 1995, the JSE All Share Index was originally operated solely by the JSE. The index in its current form – the FTSE JSE All Share Index – was launched by JSE in partnership with the FTSE Group on June 24, 2002. The index base date was 3 days prior to June 21 and the base price was 10815.
Composition of the JSE All Share Index
All ordinary securities listed on the JSE mainboard are eligible for inclusion in the index subject to minimum free float and liquidity criteria. The composition of the index is re-evaluated on a quarterly basis each March, June, September and December and both real-time and end of day data feeds are available.
As of March 2021, the All Share Index had a net market cap exceeding 8 trillion ZAR or 540 billion US dollars comprised of the following sectors:
The largest contributing sectors are Basic Resources (33%), followed by Technology (20%), Consumer Products & Services (9%), and Banks (9%). Real Estate companies are the most numerous, with 25 firms featured in the index, followed by Financial Services (17), Basic Resources (16), Industrial Goods and Services (10), and Retailers (10).
The Top 10 FTSE JSE All Share Index Stocks
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The 10 largest companies that make up the FTSE JSE All Share index by market cap are:
Naspers (Software and Computer Services), BHP Group Plc (Industrial Metals and Mining), Compagnie Financiere Richemont AG (Personal Goods), Anglo American (Industrial Metals and Mining), Firstrand Limited (Banks), Impala Platinum Hlds (Precious Metals and Mining), Sibanye Stillwater (Precious Metals and Mining), Mondi Plc (General Industrials), Standard Bank Group (Banks) and MTN Group (Telecommunications Service Providers).
NPN – Naspers Limited
Naspers is a homegrown hero. A South African multinational headquartered in Cape Town with a range of offerings and interests in the consumer internet space. NPN is both the largest stock on the JSE All Share Index and Africa’s largest publicly traded company.
Naspers was a successful early investor in Chinese tech conglomerate Tencent and is its largest shareholder with a 31% holding. Along with its stake in Tencent, Naspers owns or has controlling interests in Prosus, Media24 and Takealot.
Naspers also trades on the London Stock Exchange under LSE: NPSN
BHP – BHP Group Plc
Wherever you find metals and minerals, you’ll find BHP and South Africa is no different. The Broken Hill Proprietary Company was founded in regional Australia in the late 19th century and after merging with the Anglo-Dutch Billiton Plc, became the largest mining company in the world: BHP Billiton.
BHP’s primary listing is on the Australian Stock Exchange ASX, with a dual-listed entity, BHP Group Plc listed with the London Stock Exchange. BHP also trades on JSE, NYSE and is a component of the JSE All Share Index, the S&P500, the FTSE100 and the ASX200.
CFR – Compagnie Financiere Richemont AG
Compagnie Financiere Richemont AG is another homegrown success story. Headquartered in Switzerland, founded by a South African, CFR is a luxury goods brand that actively competes with Louis Vouton and Estee Lauder.
Watches, jewellery, leather goods, pens, firearms, clothing and accessories are just some of the luxury goods this prestigious brand produces for the discerning public.
CFR generated more than 14 billion USD in revenue in 2020 and is the 3rd largest company by market capitalisation on the JSE All Shares index, employing more than 30 000 people worldwide. The company also trades in Zurich under the same ticker.
AGL – Anglo American Plc
Anglo American is another global mining heavyweight. AGL has a primary listing on the London Stock Exchange, but is headquartered in Johannesburg where it was founded in 1917 and carries a heavy weighting in the JSE All Share Index.
AGL is the world’s largest producer of platinum and is also a major player in precious stones and basic resources. The company has mining operations all around the world including Africa, Asia, the Americas, Australia and Europe.
AGL generated revenues exceeding 30 billion USD in 2020 and employs more than 90 000 people around the world.
FSR – FirstRand
FirstRand Limited is the 5th largest company by market cap on the JSE All Shares Index and one of South Africa’s largest financial services providers. As well as serving the local South African Market, the company is a major player throughout Africa with operations in Nigeria, Ghana, Tanzania, Mozambique, Zambia, Lesotho, Swaziland, Namibia and Botswana.
FSR employs more than 40 000 people throughout Africa and is one of the 5 largest banking groups in Sub Saharan Africa. FSR is also listed on the Namibian stock exchange under the same ticker.
IMP – Impala Platinum Holdings Limited (Implats)
Impala Platinum or Implats is another major player in the global platinum markets with operations in South Africa, Zimbabwe and Canada via Impala Canada.
Implats was formed in South Africa in 1966, with its first mine established in Rustenburg, and the firm’s headquarters are in Johannesburg. It is also listed on the LSX under 0S2J and is the 6th largest component of the JSE All Shares Index by market cap.
IMP employs more than 40 000 people worldwide, primarily in Africa.
SSW – Sibanye-Stillwater
Sibanye Stillwater is yet another platinum and precious metals heavyweight formed and headquartered in South Africa. The company was formed in 2012 when Gold Fields Limited (JSE: GFI) broke off its subsidiary GFI Mining South Africa Proprietary Limited.
Sibanye Stillwater employs more than 80 000 people worldwide, predominantly in South Africa and is one of the nation’s largest employers. The US arm is also the largest industrial employer in the US state of Montana where it has significant mining interests. The group is one of the largest producers of platinum, rhodium and palladium and a significant producer of gold.
As well as a heavy weighting in the JSE All Shares Index, Sibanye Stillwater also trades on the New York Stock Exchange under ticker NYSE: SBSW.
MNP – Mondi Plc
Mondi Plc is a British multinational with deep South African roots specialising in the paper and packaging industry. MNP is the 8th largest firm in the JSE All Shares Index and it is also included in the FTSE100, listed on the London Stock Exchange under ticker MDNI.
Mondi operates in more than 30 countries around the world, employing around 25 000 people across 100 production sites predominantly in Europe, Russia, the United States and South Africa. Mondi generated more than 6 billion Euros in revenue in 2020.
SBK – Standard Bank Group
The Standard Bank Group is the 9th largest component of the JSE All Shares Index and Africa’s biggest lender. SBK also trades on the London Stock Exchange under the same ticker.
South African politician John Patterson founded SBK in London in 1862 and commenced operations in South Africa the following year.
SBK is headquartered in Johannesburg, employs more than 50 000 people and generated net income exceeding 1.5 billion US in 2016.
MTN – MTN Group
MTN is a South African telecommunications giant active in more than 20 different countries. The group derives one third of its revenue from the massive Nigerian market, where it is a major player with a 35% share of the market.
MTN is the main sponsor of the South African rugby squad and a co-sponsor of English football heavyweights Manchester United.
MTN is Africa’s largest mobile network and the 9th largest mobile network in the world. It is the 10th largest component of the JSE All Shares Index by market cap and employs just under 20 000 people.
Should You Trade the JSE Top 40 Index?
Traders, such as Forex traders often diversify their risk by trading multiple assets such as stock Indices and individual equities with their CFD broker. Choosing a broker that offers these assets is an important factor to take into consideration. Can it be profitable, is it easier than trading on the Forex market? This solely comes down to you as a trader.
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