How to Invest on the Johannesburg Stock Exchange (JSE)?

South Africa is the most economically developed of African states and it will be the continent’s economic gateway for the imaginable future. The JSE is also known as Johannesburg Stock Exchange. JSE is one of the most sophisticated in the world. In JSE investors can scoop up deals with a click of their mouse. The market’s accessibility and convenience make it an ideal place for investors.

What Documentation Will You Need to open Share Trading Account in South Africa?

To open trading account be prepared to provide the following:

Certified copy of your passport

Bank details (i.e. a canceled check or a certified copy of a recent bank statement)

Copy of a recent utility bill showing your physical address (not older than three months)

Signed letter to your broker stating that you are not registered with the South African Revenue Service for tax in South Africa (some brokers may require your Social Security number)

You will also need to fill out a form or three for the broker that you’d like to open a trading account with. Here’s a rundown as to what else is required by each one.

Anglorand requires completion of a 12-page trading mandate (only the first six are necessary for non-discretionary accounts) and a three-page schedule.

Imara SP Reid’s application is a 14-page monster. Fortunately, individual investors who wish to manage their own accounts can skip many of the sections.

Nedbank, PSG Online, and Sanlam iTrade all offer nifty online registration applications. Find Nedbank’s here, PSG’s at this link, and Sanlam iTrade’s right here.

How to buy shares in JSE (Johannesburg Stock Exchange) listed companies?

Once you have made these decisions, you need to instruct your broker accordingly (either by telephone or online). Your broker then sends your request to the JSE, where it is entered on a central order book with all the other requests to buy or sell shares.

The JSE will be ensure the transaction takes place and you will become the owner of the shares you decided to buy, if the price you want to pay is matched with a seller.

How to Fund Your Brokerage Account?

After opening your trading account, your broker will provide you with its bank details so that you can fund your account and begin buying shares.

The most efficient way to do this is via wire transfer. If you haven’t sent an international wire before, I suggest that you take your broker’s bank details to your local bank branch and ask them to walk you through the process. They’ll make sure that your funds arrive securely. Note that most US banks charge about $25 for outgoing international wires.

How much do you need to invest on the JSE?

There is no set minimum amount that you must spend when buying or selling shares.

You could buy one share at 50c, but there are cost considerations. In many cases, you could go via a financial service provider (FSP) such as a unit trust or exchange-traded fund (ETF) provider. Through monthly debit orders you also conduct a minimal fee.

If you go via a stockbroker, you will pay a minimum brokerage fee, depending on the transaction value.

Some of the full-service advisory stockbrokers will require a minimum portfolio size. Shop around to find a provider who meets your needs at a reasonable fee.