Blacks own 18% of JSE’s top firms

2010-09-01 13:25

Black South African investors own 18% of the available share capital in the top 100 companies listed on the Johannesburg Stock Exchange (JSE).

This is according to a JSE study released today.

“There has been much debate about black ownership on the JSE,” Chief executive Russell Loubser said.

“Various and quite divergent numbers have been mentioned.”

Loubser said the JSE’s top 100 companies by market capitalisation were taken as the study universe. This represented 85% of the total market capitalisation of the exchange.

The study was conducted by independent research house Trevor Chandler and Associates.

Chandler said shareholder data had been obtained from the JSE and the top-100 companies were requested to provide input to the study.

“We asked for audited or verified information and we even looked at some companies’ annual reports.”

Loubser said those who had previously supplied numbers where black ownership on the JSE was concerned, probably “got it wrong”.

“Besides, they have agendas while the JSE has no agenda.”

He said the bourse merely wanted to get as close as possible to what the BEE numbers were and therefore, what white ownership was.

About the study
Chandler said the study’s methodology had its foundations in SA regulation and the trade and industry department’s (DTI) codes of practice had been used.

The DTI codes required that a company’s BEE economic interest be calculated by taking the total share capital and excluding mandated investments (pension funds), investments held by the state, treasury shares (which a company owns in itself) and foreign operations (corporations owned by the company outside of SA).

“In addition, crossholdings between entities, for example, Anglo American’s shares in Kumba Iron Ore, listed in the top 100 were identified and removed where necessary to eliminate the capital that is effectively duplicated on the exchange,” Chandler said.

Taking into account these exclusions, in each top-100 company, the pool of available share capital for investment equated to 44% of the total market capitalisation.

“Of this available pool, the study found that 18% is owned by black shareholders,” Chandler said.

However, Loubser said that as per the DTI codes, foreign ownership (JSE-listed shares owned by foreign investors) was included in the study.

“If you take this calculation one step further by removing foreign ownership, which by definition excludes all South Africans, we estimate that 36% of available share capital is held by black shareholders.”

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