JSE own­er­ship fig­ures are not black and white

Finweek English Edition - - IN THE NEWS - BY MAR­CIA KLEIN

Whichever way you look at it, black own­er­ship of the JSE does not r ef l ec t t he de­mo­graph­ics of South Africa. But t he ex­tent of black own­er­ship has be­come the sub­ject of heated de­bate fol­low­ing Pres­i­dent Ja­cob Zuma’s as­ser­tion that black own­er­ship of the JSE is 3%. And although de­ter­mi­na­tion of black own­er­ship should be a rel­a­tively easy ex­er­cise, ev­ery anal­y­sis uses dif­fer­ent method­olo­gies, with very dif­fer­ent re­sults.

The re­search on which Zuma bases his as­ser­tion does not make th­ese 3% claims it­self. In fact, its f in­d­ings show that black ‘con­trol’ of the JSE, which is a dif­fer­ent mea­sure than own­er­ship, was just 1.3% in 2014.

The JSE, how­ever, has agreed with Zuma. “In­so­far as the di­rect in­vest­ment that black South Africans hold in listed en­ti­ties on the JSE, we roughly con­cur that the hold­ing is 3%. When di­rect and in­di­rect hold­ings are in­cluded as a value of the Top 100 listed en­ti­ties on the JSE, the f ig­ure is 23%,” it said in a state­ment.

The data from in­de­pen­dent re­search or­gan­i­sa­tion Who Owns Whom, on which Zuma’s state­ment is in­di­rectly based ac­cord­ing to pres­i­dency spokesman Mac Ma­haraj, mea­sures con­trol and not own­er­ship. This, ac­cord­ing to Who Owns Whom, is es­tab­lished by look­ing at shareholding, shareholding spread and board com­po­si­tion to de­ter­mine con­trol of man­age­ment and there­fore the com­pany cash f low. It only in­cludes among black-con­trolled com­pa­nies or direc­tor-con­trolled com­pa­nies those hold­ing over 26% with no other dom­i­nant share­holder.

Own­er­ship f ig­ures are some­thing com­pletely dif­fer­ent.

Ma­haraj said that the 3% was based on the mea­sure used by the Na­tional

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