SAVE THE SITUATION - JSE MAGAZINE

SAVE THE SITUATION

The JSE has been at the forefront of initiatives that encourage South Africans to invest more

SAVE THE SITUATION

Most South Africans perceive the stock market as inaccessible or only reserved for the privileged few. The JSE has been working on changing these perceptions over the past few years. A number of education initiatives have been put in place to help ordinary citizens by informing them of the different ways to start investing on the JSE.

Similarly, the government has indicated that as the savings and investment culture in the country is very low, it would like to encourage more South Africans to save or invest money for their future.

The need to develop a savings culture is becoming more crucial. In SA, the savings ratio is around 15% of GDP – far below international standards.

Earlier this year, Minister of Finance Nhlanhla Nene announced the launch of a new savings initiative – tax-free savings accounts (TFSAs). It is aimed at encouraging citizens to save or invest more, to eventually reduce household indebtedness. Following this, the JSE and its network of brokers saw fit to use this opportunity to encourage more people to invest on the stock exchange. Thus, ordinary South Africans can now use the tax-free account to access some of the JSE’s listed products. They can also benefit from the tax-free benefits that come with the account.

It allows the investor access to a number of selected ETFs, diversifying their risk and giving them the flexibility to contribute either monthly or a once-off annual lump sum of R30 000, with a lifetime contribution of R500 000 – these being the limits allowed by Treasury for one to qualify for a tax-free benefit.

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‘Understanding is key for anyone who is planning to invest. This allows them to make informed decisions on investing’

MPHO LEDWABA, HEAD OF MARKETING, JSE

Therefore, individuals will be exempt from tax on interest earned, dividend withholding tax on dividends earned, capital gains tax and securities transfer tax on purchases.

To support this initiative, a marketing campaign has been developed to raise awareness of this opportunity to the public. Moreover, a number of information sessions have been planned to engage with potential investors to make them aware of this great opportunity.

‘Our aim is to make ordinary South Africans realise that they, too, can invest in the JSE –a great opportunity to increase the number of individual investors on the exchange,’ says Mpho Ledwaba, the JSE’s Head of Marketing.

‘This is a great opportunity for those who will be investing on the exchange for the first time, as well as for the existing investors to benefit from the tax exemptions in this account. Most importantly, there are no restrictions for one to withdraw funds from these accounts. However, individuals are encouraged to invest their money for the long term, in order to benefit from the compounding effect of long-term investing.

‘It’s a fabulous opportunity to invest for your children’s education, that deposit on your dream house, retirement savings, a holiday or any of your investment goals or dreams,’ says Ledwaba.

The JSE has also recently launched its online learning modules, which are available on its website and aim to introduce beginners to the world of investing. It covers an array of JSE-listed products and provides a step-by-step guide to understanding the bourse, its role and the different products listed on the stock exchange.

The learning management system also tracks the progress of individuals as and when they complete the set modules.

‘Understanding is key for anyone who is planning to invest their money on the stock exchange. This allows them to make informed decisions on investing their money,’ says Ledwaba.

To invest via a TFSA account, visit www.jse.co.za for information about choosing a stockbroker who will assist in opening the account, as well as give advice regarding future investment needs.

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