Business

JSE: 18% of top 100 black-owned

2 September 2010

Black investors currently own 18% of the available share capital in the top 100 companies listed on South Africa's stock exchange, according to an independent study commissioned by the JSE.

"There has been much debate about black ownership on the JSE," CEO Russell Loubser said on Wednesday. "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.

Audited, verified information

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, had probably "got it wrong."

Codes of practice

Chandler said the study's methodology had its foundations in South African regulations, and the Department of Trade and Industry's codes of practice had been used.

The department's 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.

Foreign ownership

Taking 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 department 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."

Sapa



	'No economy can grow by excluding any part of its people, and an economy that is not growing cannot integrate all of its citizens in a meaningful way' – from South Africa's black economic empowerment strategy document (Photo: Hannelie Coetzee, MediaClubSouthAfrica.com)