Over the past decade, the Johannesburg Stock Exchange (JSE) has undergone a profound structural shift. Once defined as a traditional mining-heavy bourse, the African continent's largest exchange has transitioned into a highly concentrated, globally integrated marketplace navigating severe liquidity dynamics.

The most noticeable metric is the persistent wave of corporate delistings. Driven by onerous regulatory compliance costs, institutional consolidations and macroeconomic headwinds, the number of listed companies has dropped to below 300 counters. Small and mid-cap companies, in particular, opted to go private or were absorbed via mergers and acquisitions.

Yet, the Johannesburg Stock Exchange (JSE) remains a well-run bourse that continues to offer value to investors, though its role in a modern portfolio requires a nuanced strategy. As Africa’s premier financial hub, the exchange commands around 60% of the entire continent's equity market value and sits securely within the top 20 largest stock exchanges globally.

Regulatory Excellence and Institutional Strength

From an operational perspective, the JSE is objectively a world-class, well-regulated institution. It consistently receives accolades for its sophisticated, first-world trading infrastructure, strict regulatory surveillance and robust settlement systems. Under newly appointed Group CEO Valdene Reddy, the exchange has demonstrated strong financial resilience, posting a 16.9% increase in half-year net profit to R652 million in 2026.

The bourse has also proactively tackled modern headwinds. To combat a decade-long multi-company delisting trend driven by regulatory compliance costs, the JSE enacted a comprehensive modernisation overhaul. Effective from early 2026, the newly simplified JSE Listings Requirements streamlined compliance burdens, introducing tiered classifications like Main Board Prime and Main Board General to entice smaller-to-mid-cap enterprises back to public markets. Furthermore, plans to shorten settlement cycles from T+3 to T+1 align it directly with global norms, proving that the bourse is actively managed and evolving.

The Concentration Dilemma

Despite its operational strength, critics point to structural shrinkage. This has fuelled a concentration dilemma where market performance is heavily dictated by massive, globally integrated entities and cyclical mining heavyweights. For instance, a historic resource rally powered a 38% market surge in 2025, but left unhedged domestic equity portfolios seeing far lower baseline growth. Over a broader ten-year horizon, the JSE’s annualized returns have lagged behind booming U.S. and global indices.

So, is the JSE Still Worth Investing In?

Yes, the JSE remains worth investing in, provided investors understand its shifting landscape. The exchange is not a sinking ship; rather, it is transforming into a sophisticated market for good public companies, capital raising and investment.

Many of the JSE's largest entities—such as British American Tobacco, Richemont, and Anglo American—derive the vast majority of their revenue outside South Africa. Investing in these stocks offers a robust safeguard against local currency depreciation.  The JSE also trades at fundamentally attractive price-to-earnings multiples relative to historically expensive Western tech-heavy markets.

Ultimately, the JSE shouldn't be an all-or-nothing choice. It is an expertly run bourse providing entry points into resilient local champions and global powerhouses. Utilising it as a cornerstone for local portfolio investment alongside diversified global exposure is a prudent long-term wealth strategy.

I trust you will enjoy the highly informative articles in this month’s Wealth Matters and so until next time, do take good care.

Sincerely,