• The JSE's Top 40 index has shape-shifted from being dominated by miners to having a strong Chinese flavour – topped with financials and telecoms – within a decade.
  • At the end of 2008, resource companies represented more than 40% of the index. 
  • Their stature has diminished over recent years, though they are now much better businesses, says one analyst.


Ten years ago, dance floors everywhere were grooving to Beyoncé's Single Ladies, while fleece-lined Crocs were suddenly a thing, and the cool communicated via BlackBerry Messenger.

Meanwhile those who followed the markets were in despair amid the global financial crisis, and if your unit trust investment tracked the JSE’s Top 40 index, you were largely invested in mining companies.

A lot has changed in ten years.

While investors are yet again tearing their hair out over tanking markets, the biggest shares on the JSE looked completely different at the end of 2018 compared to 2008.

A decade ago, the mining giant BHP Billiton (which has since been renamed to just BHP) represented 16% of the Top 40 index. With Anglo American at 11.4%, AngloGold (3.6%), Implats (3.4%), Gold Fields (2.1%), and the energy company Sasol at 7.5%, these resource-focused companies represented more than 40% of the index.

top 40
Source: Mergence Investment Managers

Fast forward a decade later, and this has more than halved as a result of a commodity price slump and the weak state of the South African mining industry.

The platinum price in dollar. Source: Tradingecono
The platinum price in dollar. Source: Tradingeconomics.com

These days, Naspers represents a fifth of the bourse, courtesy of its 31% stake in the R1.7 trillion Chinese digital giant Tencent. Sanlam, Mondi, and Absa (previously majority-owned by Barclays) have also taken more prominent positions.

The current Top 40 is basically not comparable with a decade ago, says Brad Preston, head of listed investments at Mergence Investment Managers. 

Beer company SAB, which was first listed on the JSE in 1897, was dropped from the index after its takeover by Anheuser-Busch InBev in 2016. While it is now listed as AB-Inbev on the bourse, its South African shareholding is not large enough for inclusion in the JSE indices. Back in 1996, SAB was the biggest company on the local bourse.

The largest JSE stock ten years later in 2006, Anglo American, continues to move down the ranks.

British American Tobacco was not included in the 2008 index because as an “inward” foreign listing, it didn’t qualify. This changed in 2011, when government classified these listings as domestic assets, which meant it could be included in indices.

The main difference between the Top 40 in 2018 and 2008 is the sector exposure with more tech and a lower mining weighting, says Preston.

"Investors who track the index must understand what they are invested in. Remember that 20% of your investment will now be in a single Chinese internet play, Tencent, via Naspers,” says Preston.

While mining companies may have been following a painful commodity slump over the past few years, Preston says they now look more appealing as investments having reduced gearing (debt).

“They are much better businesses, which are taking better decisions with their capital ”

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