Quick Facts

• JSE is Africa’s largest stock exchange with over 300 companies listed
• You can start investing with as little as R5 on some platforms
• All shares must be bought through FSCA-registered brokers
• Dividends are taxed at 20%, capital gains at an effective rate of 18%
• Tax-Free Savings Accounts (TFSA) let you invest R36,000 per year tax-free

What Are Shares and Why Buy Them?

When you buy a share, you own a small piece of a company. Think of it like owning a slice of a pie. If the company does well, your slice becomes more valuable. You can also earn money when the company shares its profits with shareholders.

The Johannesburg Stock Exchange (JSE) is where companies sell their shares in South Africa. It was founded in 1887 and is now the largest stock exchange in Africa. Over 300 companies are listed, including famous names like Shoprite, Capitec, MTN, and Naspers.

Why people invest in shares: Over the past 10 years, the JSE All Share Index averaged about 10% returns per year. This beats the 2-3% you get from most savings accounts. But remember – shares can go down as well as up.

How the JSE Stock Market Works

Trading hours: The JSE is open Monday to Friday, 9:00 AM to 5:00 PM. No trading happens on weekends or public holidays.

You cannot buy directly from the JSE. You must use a stockbroker or investment platform. These companies are registered with the JSE and the Financial Sector Conduct Authority (FSCA). They buy and sell shares on your behalf.

Share prices change constantly. Prices go up when more people want to buy. Prices go down when more people want to sell. News about the company, the economy, or world events can all affect prices.

✅ Two Ways to Make Money from Shares

1. Dividends: Some companies share their profits with shareholders. This is called a dividend. For example, if you own 100 shares in Shoprite and they pay a R2 dividend per share, you receive R200. Not all companies pay dividends.

Example of dividends in 2025: Capitec Bank shares paid dividends of about R37.50 per share. Thungela Resources offered a dividend yield of nearly 15%, meaning R11 per share.

2. Capital Growth: This means the share price goes up. If you bought Capitec shares at R2,000 and later they are worth R3,000, you made R1,000 profit per share (if you sell).

Real 2025 example: In the first half of 2025, Blue Label Telecoms shares increased by 145%. Investors who bought at the start of the year more than doubled their money. But this is unusual – most shares grow more slowly.

What You Need to Start Investing

Documents required:

• South African ID document or passport
• Proof of address (utility bill or bank statement less than 3 months old)
• SARS tax number (your income tax reference number)
• South African bank account

Minimum money needed: This depends on the platform. Some platforms like EasyEquities let you start with just R5. Traditional brokers may require R5,000 or more. Most experts suggest having at least R1,000 to R5,000 to start building a proper portfolio.

Age requirement: Adults 18 and older can open accounts in their own name. Parents or guardians can open accounts for children under 18.

For non-residents: If you live outside South Africa but want to invest in JSE shares, you need FICA documents (ID, proof of address) and must use international brokers that offer JSE access.

Choosing an Investment Platform

Online platforms (cheapest option for beginners): These let you buy and sell shares yourself through an app or website. Good for people who want to learn and make their own decisions.

Traditional stockbrokers (more expensive, with advice): Banks like Absa, Standard Bank, and Nedbank offer stockbroking services. You get personal advice but pay higher fees. Brokerage fees can be 0.4% to 1% per trade, plus monthly fees.

Financial advisors: They help you plan your whole financial life, not just shares. They can suggest which shares fit your goals. They charge fees or earn commission.

⚠️ All Costs and Fees Explained

Fees can significantly reduce your profits. A R5,000 trade might cost you R25 to R200 depending on where you invest. Here is what you will pay:

1. Brokerage fee (trading fee): This is what the platform charges you to buy or sell shares. It is usually a percentage of your trade value.

2. Securities Transfer Tax (STT): The government charges 0.25% when you buy shares. On a R10,000 trade, that is R25.

3. STRATE settlement fee: This is for the electronic system that transfers shares. Usually around R6 to R12 per trade.

4. JSE fee: A small fee of about 0.0042% of trade value. On R10,000, that is about R0.42.

5. Investor Protection Levy: About 0.002% of trade value to protect investors.

6. Monthly admin fees: Some platforms charge R70 to R150 per month. Others have no monthly fee if you trade regularly.

7. VAT (15%): VAT applies to most fees except STT.

✅ Step-by-Step: How to Buy Your First Shares

Step 1: Choose your platform

Compare fees, minimum investment amounts, and available shares. For beginners, EasyEquities or Clarity offer the lowest barriers to entry. Read reviews and check the platform’s FSP number with FSCA.

Step 2: Register your account

Visit the platform’s website or download their app. Click “Register” or “Sign Up”. You will need to provide your full name, ID number, email address, phone number, and physical address. Create a strong password.

Step 3: Verify your identity (FICA process)

Upload clear photos or scans of your ID document and proof of address. The platform checks these documents. This usually takes 1 to 3 working days. You cannot trade until verification is complete.

Step 4: Add money to your account

Link your South African bank account. Transfer money using EFT (Electronic Funds Transfer). Some platforms clear funds within hours. Others may take 1 business day. You can only buy shares once your money shows in the platform account.

Step 5: Research which shares to buy

DO NOT pick shares randomly. Look at company financial reports, news, and performance history. Check the share’s P/E ratio (price compared to earnings), dividend history, and industry trends. For beginners, consider starting with JSE Top 40 companies or ETFs that hold many shares.

Step 6: Place your order

Search for the company using its JSE code (e.g., “CPI” for Capitec, “SHP” for Shoprite). Enter how many shares you want to buy or how much money you want to spend. Choose between a “market order” (buy at current price) or “limit order” (buy only at a specific price or lower).

Step 7: Confirm and complete

Review the total cost including all fees. Confirm the purchase. The shares appear in your account within 1 to 3 business days. You will receive a confirmation email and can view your portfolio on the platform.

Understanding Tax on Your Investments

You must pay tax on investment profits. There are two types of tax:

1. Dividends Tax (20%): When a company pays you dividends, they automatically deduct 20% tax before the money reaches you. You receive the dividend minus tax. For example, if the dividend is R100, you receive R80. The company sends R20 to SARS. You do not need to declare this on your tax return – it is already done.

2. Capital Gains Tax (CGT): When you sell shares for more than you paid, the profit is a capital gain. You pay tax on 40% of this gain at your normal income tax rate. The effective rate is about 18% for most people (40% × 45% max tax bracket).

Example of Capital Gains Tax:

• You bought 10 Shoprite shares at R200 each = R2,000 total
• You sold them later at R300 each = R3,000 total
• Your profit (capital gain) = R1,000
• Annual exclusion: R40,000 (first R40,000 of gains is tax-free each year)
• Since your gain is under R40,000, you pay NO tax
• If your total gains for the year exceed R40,000, you include 40% of the amount above R40,000 in your taxable income

Tax-Free Savings Account (TFSA) – Pay NO tax: The government created TFSAs to encourage saving. You can invest R36,000 per year (R3,000 per month) with a lifetime limit of R500,000. ANY money your investments earn in a TFSA is 100% tax-free. No dividends tax. No capital gains tax. No interest tax.

Important TFSA rules: If you contribute more than R36,000 in one tax year (1 March to 28 February), SARS charges a 40% penalty on the excess. If you contribute more than R500,000 in your lifetime, you pay a 40% penalty on the excess. Withdrawals do not reset your limit – once you have used your R500,000 lifetime limit, it is gone.

When to use TFSA vs regular investment account: Use a TFSA first if you can afford to. Max out your R36,000 per year. Only after maxing your TFSA should you invest in a regular taxable account. TFSAs work best for long-term investments (10+ years) because tax savings compound over time.

✅ Beginner-Friendly Investment Options

Exchange Traded Funds (ETFs) – Safer for beginners: Instead of buying one company’s shares, an ETF buys shares in many companies. This spreads your risk. If one company fails, you do not lose everything.

Popular South African ETFs in 2025:

• Satrix 40 (STX40): Owns shares in the 40 biggest JSE companies. When the JSE Top 40 index goes up 10%, your investment goes up about 10%.
• Satrix All Share (STXIND): Owns shares in over 160 JSE companies. More diversification than Top 40.
• Satrix Property (STXPRO): Invests in property companies (REITs). Pays regular dividends.
• Coreshares S&P 500 (CSSP500): Gives you access to 500 biggest US companies like Apple, Microsoft, Amazon. Protects against Rand weakness.

Why ETFs are good for beginners: Lower risk through diversification. Lower fees than buying many individual shares. Professional management. Easy to understand. Can start with very small amounts.

JSE Top 40 Index – What is it? This is a list of the 40 most valuable companies on the JSE. It is reviewed every 3 months (March, June, September, December). Companies can enter or exit the index. The Top 40 represents about 80% of the JSE’s total value.

Examples of Top 40 companies (2025): Naspers/Prosus, Anglo American, Richemont, BHP Group, Capitec Bank, Shoprite, MTN, Sasol, Standard Bank, FirstRand, Vodacom, Gold Fields, Impala Platinum.

🚨 CRITICAL: Investment Scams to Avoid

Investment scams are EXPLODING in South Africa in 2025. The FSCA issues warnings almost weekly. Scammers have stolen millions from South Africans. They use sophisticated techniques including deepfake videos of famous businesspeople.

Common scams in 2025:

1. WhatsApp/Telegram Investment Groups: Scammers create groups claiming to be the JSE or legitimate brokers. They promise 20-30% returns in days or weeks. They use the JSE logo and fake executive names. THE JSE NEVER RECRUITS INVESTORS ON SOCIAL MEDIA.

Real 2025 scam examples reported by FSCA:

• Octodec Invest Ltd: Falsely claimed association with JSE. Used JSE trademarks without permission.
• NBSG Securities / Nedbank Securities deepfake: Scammers created fake video of FSCA Commissioner promoting “AI trading tool” with 20-30% returns. This is a LIE – the FSCA never promotes investment products.
• Gold Earnings Hub / Africa Gold Capital: Used deepfake videos of billionaire Patrice Motsepe to promote fake gold investments.
• Swiftkryprtotrade: Impersonated JSE executives on Telegram to solicit crypto investments.

2. Impersonation Scams: Scammers pretend to be from legitimate companies like Avior Capital Markets, Capitec, Sanlam, or Exness. They use real FSP numbers, logos, and names of actual executives. They contact you via WhatsApp, Telegram, or fake mobile apps.

3. “Recovery” Scams: A person claiming to be an “FSCA Chief Executive Investigator” named “Rick Steiner” contacts fraud victims. He says he can recover their lost money if they create and fund a crypto wallet. THIS IS A SCAM. THE FSCA DOES NOT OFFER RECOVERY SERVICES. There is no FSCA employee named Rick Steiner.

RED FLAGS – NEVER INVEST IF YOU SEE THESE:

• Promises of guaranteed high returns (20%, 30%, 50% returns)
• Pressure to invest immediately (“limited time offer”)
• Contact via WhatsApp, Telegram, or unsolicited DMs
• Requests for upfront fees before you can withdraw profits
• Unclear or vague information about how the investment works
• No FSP number or fake FSP number
• Cannot visit a physical office
• Company not listed on FSCA website
• Use of celebrity endorsements (often deepfakes)
• Requests to pay via cryptocurrency or untraceable methods

Remember: If an investment sounds too good to be true, it is a scam. Real investing builds wealth slowly over years, not overnight. The JSE All Share Index averages 10% per year over decades – anyone promising more than this is lying to you.

Your Rights as an Investor

The law protects you. Financial service providers must follow strict rules set by the FSCA. You have rights under the Financial Advisory and Intermediary Services Act (FAIS).

Your rights include:

• Clear information about all fees before you invest
• Advice that suits your financial situation and goals
• Protection against misleading advertising
• The right to complain if something goes wrong
• Compensation if a broker acts dishonestly (limited protection)
• Access to your account information at any time

If you have a problem with your broker or platform:

Step 1: Contact the company’s complaints department. They must respond within 6 weeks.

Step 2: If not resolved, contact the FAIS Ombud (for financial advice complaints):
Phone: 012 762 5000
Email: info@faisombud.co.za
Website: www.faisombud.co.za

Step 3: Report misconduct to FSCA:
Phone: 0800 110 443
Ethics Hotline: 0800 313 626
Email: fsca@behonest.co.za
Website: www.fsca.co.za

For fraud or scams: Report to SABRIC (South African Banking Risk Information Centre) at www.sabric.co.za and open a case at your local police station.

How to Research Shares Before Buying

Never buy shares based on tips from friends or social media. Always do your own research. Here is what to look for:

1. What does the company do? Understand their business. How do they make money? Do you use their products or services?

2. Is the company profitable? Check their financial results on the JSE website or company website. Look for consistent profits over several years. Growing revenue is good. Increasing debt is a warning sign.

3. P/E Ratio (Price to Earnings): This shows if the share is expensive or cheap compared to earnings. A high P/E (above 20) might mean the share is expensive. A low P/E (below 10) might mean it is cheap – or the company has problems.

4. Dividend history: Does the company pay regular dividends? Are dividends growing or shrinking? Companies like Capitec, Shoprite, and Vodacom have consistent dividend records.

5. Industry trends: Is the industry growing or shrinking? For example, technology companies may grow faster than coal mining companies due to global energy transition.

6. News and announcements: Read SENS (Stock Exchange News Service) announcements on the JSE website. These are official company announcements about results, acquisitions, or major changes.

Free resources for research:

• JSE website (www.jse.co.za) – company information and SENS announcements
• Sharenet (www.sharenet.co.za) – delayed prices and basic data (free version)
• Company annual reports – available on company websites
• Moneyweb (www.moneyweb.co.za) – financial news and analysis
• Business Day and Daily Maverick – business news

⚠️ Important Risks to Understand

All investments carry risk. You can lose money. Share prices go down as well as up. Here are the main risks:

1. Market risk: The whole stock market can fall. In 2020 during COVID-19, the JSE dropped 20%. In 2008 during the global financial crisis, it fell 40%. This is normal market behaviour over time.

2. Company risk: Individual companies can fail completely. Shareholders can lose 100% of their investment if a company goes bankrupt. This is why diversification is crucial.

3. Currency risk: If you invest in companies that earn money overseas, Rand weakness helps them. Rand strength hurts them. For example, Naspers earns in US Dollars – when the Rand weakens, their profits in Rands increase.

4. Liquidity risk: Some shares are hard to sell quickly. Small company shares may have few buyers. You might have to sell at a low price to find a buyer.

5. Platform risk: If your broker goes bankrupt, your shares are still yours (they are held separately). But there could be delays accessing your account.

How to reduce risk:

• Diversify – own shares in different industries and companies
• Invest for the long term (5+ years minimum)
• Only invest money you do not need for at least 3-5 years
• Keep an emergency fund in cash (3-6 months expenses)
• Start with ETFs rather than individual shares
• Never invest borrowed money
• Do not check prices daily – this creates emotional decisions

For complete beginners in December 2025:

1. Start with a Tax-Free Savings Account (TFSA). This gives you maximum tax benefits on your first R36,000 per year.

2. Use EasyEquities or Clarity platforms – they have the lowest fees and let you start with as little as R5 to R10.

3. Invest in an ETF like Satrix 40 or Satrix All Share, not individual shares. This gives you instant diversification across many companies.

4. Set up a monthly debit order for R300, R500, or R1,000 – whatever you can afford. Regular investing builds wealth through compound growth.

5. Do not try to time the market. Invest the same amount every month regardless of whether prices are up or down.

6. Ignore short-term price movements. Check your portfolio once per month maximum. Do not panic when prices fall – this is normal.

7. VERIFY every investment opportunity. Check FSCA website for FSP numbers. Never invest based on WhatsApp or Telegram messages.

8. Keep learning. Read company annual reports. Follow financial news. Join free webinars offered by platforms like Satrix and EasyEquities.

9. Plan for the long term. Real wealth from shares comes from holding for 10, 20, or 30 years – not weeks or months.

Remember: Investing in shares is not gambling. It is buying ownership in real businesses. Approach it seriously. Do your research. Start small. Be patient. Your future self will thank you.