Stocks, bonds, and other financial instruments are traded between buyers and sellers on an exchange, often known as a stock market, bourse, or stock exchange.
Stock markets might serve as a central clearinghouse for a wide range of financial transactions, including the issuance and redemption of securities, the payment of dividends and other forms of capital, and the settlement of taxation on capital gains.
It is only possible to buy and sell stocks through brokers who are members of the stock market on which they are listed. Here, we take a closer look at the 3 biggest stock exchanges in South Africa, on which stock traders can invest in a wide variety of promising stocks and other financial instruments.
1. Johannesburg Stock Exchange (JSE)
The Johannesburg Stock Exchange (JSE), also known as JSE Limited and the JSE Securities Market, is the largest stock exchange in Africa.
The South African financial district moved to Sandton from downtown Johannesburg in the year 2000, making it the country’s financial hub. The JSE is an important part of South Africa’s economy since it provides Primary Market, Secondary Market, post-trade, and technical services.
Besides regulating and profiting from both the primary and secondary markets, the JSE also offers insights into both of these markets and sells access to data from both. As the breadth and depth of trading items on the JSE increase, so do the opportunities for making a profit there.
There are seven indices making up the headline series on the JSE:
· the JSE All Share Index (J203)
· the Top 40 Index (J200)
· the Large & Mid Cap Index (J206)
· the Large Cap Index (J205)
· the Mid Cap Index (J201
· the Small Cap Index (J202) and the Fledgling Index (J204).
These indices comprise eligible instruments, listed on the JSE Main Board, and are categorised according to company size (market capitalisation).
Of these, the JSE All Share Index represents 99% of the full market cap value of all eligible securities listed on the Main Board of the JSE.
As a result of having 425 companies listed, the JSE is not overly reliant on the products or services of any one corporation. Investors find comfort in the knowing that there are multiple avenues open to them for making a profit.
2. Nairobi Securities Exchange (NSE)
Kenya is one of the fastest-growing economies in Sub-Saharan Africa, and its capital city, Nairobi, is home to a major African exchange called the Nairobi Securities Exchange (NSE).
Debt and stock listings have been available on the NSE since its inception in 1954. The NSE provides a first-rate trading environment for both domestic and international investors interested in participating in the expanding Kenyan and African economies.
The NSE demutualized and became a main board-listed business on its own market in 2014 after successfully raising KSh 627 million through an initial public offering.
The Nairobi Stock Exchange (NSE) is home to 65 publicly traded companies with a combined market capitalization of USD$17.19 billion as of late.
The NSE20, or Nairobi Stock Exchange Twenty Share Index, is an important stock market index that follows the twenty best-performing companies listed on the Nairobi Securities Exchange.
The Capital Markets Authority of Kenya is responsible for regulating the NSE, and an 11-member board of directors oversees the exchange.
3. The Nigerian Stock Exchange (NGX)
Through its wholly-owned subsidiaries, the Nigerian Stock Exchange (NGX) is a prominent trading and listing platform in Africa.
NGX Group Plc, the Nigerian Exchange Group, is a frontrunner in the development of Africa’s integrated market infrastructure. For the sake of Africa as a whole, they work to improve the competitiveness of the continent’s largest economy.
Both NGX Regulatory Limited (NGX RegCo), an independent regulation business, and NGX Real Estate Limited (NGX RelCo), a real estate corporation, contribute to the NGX Group’s comprehensive variety of offerings.
Listing and trading securities, licencing, market data solutions, associated technologies, regulation, and more are all included in this broad category.
With 156 listed companies, the NGX is one of the world’s best-performing stock exchanges in the first half of 2023, with the Nigerian All Share Index rising by more than 21.17% year-to-date.