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The number of listed companies on the JSE (formerly known as the Johannesburg Stock Exchange) has declined from more than 350 in 2005 to just above 200 in 2025, leaving pension funds and other institutional investors with a considerably smaller pool of South African companies in which to invest.

The chart below shows the number of companies listed on the JSE between 2005 and 2025.

Taking a longer-term view, the decline is even larger. In the early 1990s, there were more than 700 listed companies on the exchange.

South Africa is not alone in experiencing this trend. Exchanges around the world have lost listed companies as businesses have been acquired, merged, taken private, or chosen other sources of capital.

Over the past 20 years, an average of 6.3% of companies on the JSE have delisted each year, compared with a global rate of 4.0%. The JSE’s delisting rate has therefore been around one and a half times the global rate.

Delistings themselves are not necessarily a sign of poor economic health. According to the World Federation of Exchanges, more than 60% of global delistings are linked to mergers and acquisitions. In South Africa, this proportion has been around 50%.

What does matter is that the decline in the number of companies listed on the JSE gives institutional investors (particularly retirement funds) a smaller pool of potential companies in which to invest.

Listed equities play an important role in pension fund portfolios. They provide access to long-term economic growth while offering daily liquidity, transparent prices, and the ability to spread investments across many companies and industries.

South African retirement funds also operate under Regulation 28 of the Pension Funds Act, which limits their total foreign exposure to 45%. While this does not require the remaining money to be invested in companies listed on the JSE, it leaves substantial retirement savings dependent on domestic investments, and the nature of listed companies makes them a natural fit for retirement and pension funds, which are looking for long-term steady growth.

Already institutional investors account for a significant proportion of the JSE – it is estimated that at least 25% of share capital on the exchange is held by pension and retirement funds.

A decline in companies on the JSE therefore shrinks the potential domestic savings pool significantly for retirement and pension funds.

The challenge facing South Africa is not simply the shrinking size of an exchange, but the shrinking of the investment ecosystem that supports long-term capital formation. A smaller listed market means fewer opportunities for investors to allocate capital, fewer companies able to access public funding, and fewer avenues through which ordinary South Africans can participate in the growth of domestic businesses.

Reversing this trend requires a growing economy that results in more companies being created and encourages existing companies to list, expand, and raise capital locally. In addition, thought must be given to amending Regulation 28 and allowing retirement and pension funds to invest a higher proportion of their clients' capital abroad.