Listed products other than shares

Introduction

In addition to shares, many exchanges also have other products listed. South Africa, for example, has a Specialist Instruments (or Securities) Market and the following instruments are listed:

• Kruger rands

• Debentures

• Exchange traded funds (ETFs)

• Preference shares

• Warrants.

Kruger rands

There are 4 Kruger rands listed: one ounce, half ounce, quarter ounce, and one-tenth ounce.

Debentures

Only a few debentures are listed on the JSE. A debenture is a fixed-interest debt security issued by a company. These instruments are falling into disuse as companies are more inclined to issue bonds. A listing requirement is that the number of public shareholders (excluding employees and their associates) must be at least.

Exchange traded funds

Name of ETF

Index tracked

Satrix 40

ALSI 40 FTSE/JSE index (comprised of the top shares listed on the Main Board of the JSE by market capitalisation)

Satrix FINI

FINI 15 index (comprised of the top 15 companies in the financial group of sectors, ranked by market capitalisation)

Satrix INDI

INDI 25 index (made up of the top 25 companies in the industrial group of sectors, ranked by market capitalisation)

Satrix RESI

Resources index

Satrix SWIX TOP40

Shareholder weighted Top40 index

NewRand Fund

A rand-hedge fund that tracks a customized new rand hedge index calculated by the JSE (comprised of a number of rand hedge shares)

NewGold Fund

Gold index

Itrix FTSE 100

Top 100 shares listed on the London Stock Exchange in terms of market capitalisation

Itrix Dow Jones Euro Stoxx 50

The 50 most liquid shares in the Eurozone area (for example: Deutsche Bank, AMN Amro)

*Derived from: South African Traded Index. Satrix is owned by the JSE, Deutsche Securities and Sanlam Investment Management.

Table 2: Exchange-traded funds

Examples of the exchange-traded funds (ETFs, but also called traded index funds) listed on the JSE (Equities Division) are as shown in Table 2.

An index fund is a fund set up by some financial market participant (for example a bank or the JSE itself) to track a particular index (local or foreign). This means that the fund has liabilities in the form of tradable "shares" (although they are more akin to units of unit trusts), and assets in the form of the specific equities that make up the index, according to their weightings in the index. The price of the shares, while free to find its own level, tends to track the index value.

It will be apparent that an investment in a traded index fund is an inexpensive way of gaining exposure to segments of the market; exposure is gained without having to purchase the individual shares that make up the index. Dividends are also payable to the holders of the shares of the ETF.

Preference shares

There are almost 30 preference share is listed on the JSE. Examples are, i.e. Standard Bank Investment Corporation 6.5%, the AECI 5.5%, the Barloworld 6%, Nampak 6%, and so on. One of the listing requirements for preference shares is that the number of public shareholders must be at least 50.

Warrants

Warrants are put and call warrants on share indices and on specific shares. As noted earlier, these are not call warrants on specific shares issued by the relevant companies (that lead to the issue of new shares when exercised).

An example is the "RM ALSI A2" (the abbreviation found in the newspapers). This translates to:

• RMB = the issuer

• ALSI = the FTSE-JSE all share index

• A2 = the rating

• The abbreviation does not indicate that this is a warrant, but it is23, and it is most likely a call warrant on the all share index.

Another example is the "SB NPN CDA". This translates to:

• SB = Standard Bank

• NPN = JSE code for the share

• C = call warrant

• D = discount

• A = the first in the series.

 
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