JSE adjusts caps after Naspers deal upends index

The Johannesburg Stock Exchange will introduce new caps to help investors rebalance weightings after a stock swap between Naspers Ltd and Prosus NV.

Effective from September, the capping level for the SWIX All Share Index and SWIX Top 40 Index will fall to 6% from 10%, according to a statement from the bourse.

The interim measure is designed to align the companies’ combined weighting in key indexes to prevailing levels, JSE said.

The exchange will seek a permanent solution as quickly as possible after a consultation period following publication of a white paper in August.

The deal between South Africa’s Naspers and its spin-off Prosus this week caused havoc, with the JSE forced to delay opening by hours on Wednesday amid the rush of rebalancing trades.

“It is important to avoid a temporary structural dislocation in index weightings,” according to the JSE statement.

Naspers is Africa’s largest company by market value. The company’s 31% stake in China’s Tencent has helped to drive up its capitalization in recent years.

Read: Why Cape Town keeps street lights on during the day

Must Read

Partner Content

Show comments

Trending Now

Follow Us

JSE adjusts caps after Naspers deal upends index