The Johannesburg Stock Exchange announced a 17% black shareholding in Sandton on Tuesday, but noted the figure may well be higher.
The study focused on the top 100 companies, which account for 85% of the exchange’s market capitalisation and the research included direct and mandated investments.
In 2010, the study only considered direct investments and found a black shareholding of 8%. That number has not changed since but mandated investments, which include pension and provident funds, unit trusts and life insurance policies, revealed a 9% of black participation.
The JSE approach, which varies slightly from the department of trade and industry approach, found the pool available to South Africans was 54% of the exchange. This is after excluding investments that are not available to ordinary South Africans — such as cross holdings, state-held shares, foreign investment and retail ownership. Black ownership was calculated as 32% of the available pool.
However, it is important to note is that only 50% of the mandated investments were analysed and the JSE expects further research next year will reveal a higher percentage.
Trevor Chandler and Associates conducted the study and Chandler said the team was exceptionally careful not to make assumptions or extrapolate data where it did not exist.
He said mandated investors provided 12-million records to support the analysis and, where data relating to pensioners or members was unavailable, those individuals were assumed to not be black. Therefore, the actual figure could be much higher.
Chandler said if the research had taken mandated investments into account last year, it would most likely have shown a higher value year-on-year due to accumulated value.
“We still have work to do,” said Russell Loubser, the exchanges CEO. “It’s a hugely complex issue that is time consuming and it is difficult.”
Loubser said the mandated investment numbers are not surprising as there has been a large push to involve black people in the formal sector. He said 89% of the civil service in South Africa is black and also part of pension schemes.
“Just about everyone has an opinion on the matter,” said Loubser. The information is there to inform policy debates. The lack of data has allowed people with agendas to exploit the situation. “The JSE has no agenda whatsoever except to get closer to the number,” he said.
Loubser said he was pleased to see the direct black shareholding remained steady at 8% and had not dropped over the past year.