The JSE Overall index (J203) shows an average of most of the shares listed on the stock exchange. It used to be dominated by commodity shares involved in extracting South Africa’s vast mineral wealth and exporting it overseas. Today, those massive mining companies have shrunk to a fraction of their former glory and instead the index is dominated by massive international companies like Naspers and Anheuser Busch. A large proportion of the JSE’s market capitalisation represents businesses which are not in South Africa and which offer local investors a hedge against the weakness of the rand.
Over the past 34 years, the JSE Overall index has trended upwards, mainly because of the decline of the rand against hard currencies like the US dollar, the euro and the British pound. On average shares in the index have paid a dividend yield of approximately 3,5% per annum. Consider the semi-log chart:
JSE Overall Index (J203) Semi-Log Chart 1985 to 2019 – Chart by ShareFriend Pro
This shows that the JSE Overall index has been moving up steadily over this very long time period despite the 1987 crash, the dot-com bear trend in 1998 and the sub-prime crisis of 2008. Read More