The latest World Economic Forum (WEF) Global Competitiveness report ranks South Africa first out of 142 countries for its regulation of securities exchanges. This is the second successive year that South Africa has achieved this ranking and, together with several other elements of the report, suggests that the country’s exchange is a sound environment in which to invest.
South African standards of corporate governance are highly ranked – the country achieved first place for strength in accounting and auditing standards (as last year), second place for efficacy of corporate boards and third place in protection of minority rights (both from sixth in 2010). Its credibility as an investment destination is also boosted strongly by the soundness of its banks, for which the country achieved a second place ranking (also from sixth). South Africa ranks tenth for the strength of investor protection (same as in 2010).
“In a globally competitive environment, markets with strong regulation, solid infrastructure and thriving institutions will be better positioned to attract sustainable capital flows. South Africa's ranking as the world's best regulated financial market for the second consecutive year is also a testament the JSE and Financial Services Board (FSB)’s sound working relationship," says Russell Loubser, CEO of the JSE.
The JSE is accountable to the FSB for the regulation of its markets, market integrity and investor protection.
Overall South Africa moves up by four places to attain fiftieth position this year, remaining the highest-ranked country in sub-Saharan Africa and the second placed among the BRICS economies after China.
Released annually in September, the report rates countries according to 12 pillars or sets of criteria. This includes competitiveness in terms of quality of infrastructure and institutions, efficiency, market sophistication as well as capacity for innovation. Regulation of securities exchanges falls under the eighth pillar for financial market development.
Other rankings that demonstrate the efficiency of South Africa’s financial markets include: financing through the local equity market at fourth and availability of financial services at third (both from seventh last year).
“The recent economic crisis has highlighted the central role of a sound and well-functioning financial sector. Our performance here is encouraging and demonstrates high confidence in South Africa’s financial markets at a time when trust is only slowly returned to many other parts of the world,” adds Loubser.
To view or download the full report, please visit http://www.weforum.org
