The Association of BEE Verification Agencies (ABVA) congratulates the Johannesburg Stock Exchange (JSE) for commissioning the landmark study on the effective participation of black people as shareholders on the JSE.
The study was conducted by Trevor Chandler and Associates. ABVA Chairperson, Chris Van Wyk, in his role as CEO of AQRate Verification Services oversaw the methodology and verified the process that was applied. "There have been several surveys conducted by various institutions in the past but none of which had the detailed information at their disposal that formed part of this analysis or which referenced actual shareholder data.' "The legislator has set the parameters and methodology in terms of which black ownership must be measured and the analysis has remained true to these principles' added Mr. Van Wyk. "People will from time to time disagree with and debate the methodology prescribed by the Codes but three years after the gazetting of the Codes of Good Practice it still remains the only legislated benchmark for determining the black ownership of enterprises.'
The target in the Codes for black ownership is set at 25% black ownership of the issued share capital of a business within 10 years from the gazetting of the Codes. The study found that at least 18% of the JSE is owned by black people as per the methodology of the Codes. "In light of the fact that the Codes have only been around for three years I believe that the 18% figure indicates significant progress towards the 10 year 25% target for black ownership' Van Wyk said.
The study also shows that if the portion of the JSE that is owned by foreign investors (in other words that portion that is not available for ownership by either black or non-black South Africans) is deducted, then of the portion that remains at least 36% is owned by black people. This gives perspective to the parity of ownership between black and non-black owners - something which previous studies failed to do.
"The JSE plays a part in encouraging all South Africans, including black investors to invest on the exchange. This study indicates that there is a good basis from which to grow black ownership specifically,' says JSE CEO Russell Loubser.
"ABVA believes that the study will stimulate positive debate and welcomes the JSE?s transparent approach with data and methodology. At this stage the collective knowledge of the measurement of Black Economic Empowerment resides in the membership of ABVA and as the only body for this industry, we welcome participation from all stakeholders in the promotion of economic transformation'.