The JSE will introduce new caps to help investors rebalance weightings after a stock swap between Naspers and Prosus.
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, the 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 spinoff 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. — (c) 2021 Bloomberg LP