WEDNESDAY, 4.30PM:
A REPORT in the Wall Street Journal says that “black chips” are the hottest investment on the Johannesburg Stock Exchange.
“Black chips” are shares in black-owned companies, a plethora of which have listed since 1994 in the name of black economic empowerment.
Despite some wild swings of black-chip share prices during 1997, their trading index “outpaced South Africa’s all-share index by 16%,” Legae Securities’ Emmanuel Lediga told the Journal’s Neil Behrmann.
South Africa’s 53 black-chip firms represent about 10% of the stock market’s total capitalisation. The ones to watch, advises analyst Robert Mwangi, are 23 whose combined share value accounts for 4,6% of all JSE listings.
Popular though they are at home, black chips have yet to attract major players abroad. Lediga believes this is partly because of wild price swings and partly because most black-controlled corporations still lack the liquidity foreign investors want to see.