A study by Alternative Prosperity on behalf of the JSE found that direct black ownership was 10% and indirect black ownership through institutional funds amounted to 13% in 2013.

It said, however, its findings did not necessarily mean that “fully 10% of the shares of listed companies are in the hands of black investors”.

It said for some companies, black ownership had been achieved through the transfer of stakes in subsidiaries rather than at the level of the listed group.

“A narrow focus on the ownership of shares of listed entities would, therefore, disregard the extent to which black ownership has been facilitated through various forms of BEE schemes,” the study said.

“For this reason, BEE transactions at the subsidiary level can be counted towards ownership under the broad-based black economic empowerment (BBBEE) codes – and are also included by Alternative Prosperity in their estimates of black ownership.”

Alternative Prosperity provides a broad range of products and services relating to BBBEE, sustainability and responsible investment.

The estimates were based on an analysis of the vested rights of beneficiaries in retirement funds, life policies and collective investment schemes, using a sample drawn from the largest institutions investing in JSE-listed companies, said the report.

Together, retirement funds, long-term insurance companies and collective investment schemes held R2283 billion of JSE-listed equities at the end of last year – representing 36% of total assets under management at these institutions. It said these holdings accounted for an estimated 34% of the market capitalisation of JSE-listed shares held on strate.

It said the structure of ownership reflected several important aspects of the South African economy, linking to policy priorities on transformation and inclusive growth, macroeconomic and financial stability, and competition.

The report showed that listed companies were typically expected to have diverse ownership – characterised by a large number of relatively small shareholdings – although many would also have one or more strategic shareholders with a significant influence in the company.

However, it said a complication in assessing trends in black ownership arose from the structure of BEE transactions. “BEE schemes typically have a period during which the beneficiaries are locked in, forming part of the financial structure for the transfer of ownership. Following maturity of the deal, beneficiaries may opt to sell their holdings, potentially leading to a dilution of black ownership over time.”

The report stated that a declining share of black ownership of the company should not necessarily be considered a signal of failure in terms of transformation, as black beneficiaries were able to use the net wealth accumulated through the BEE process to diversify their assets and pursue new investments.

It said this was reflected in the current BBBEE codes, which allowed for the recognition of black ownership after the sale or loss of shares by black participants. The use of the principle of “once empowered, always empowered” has been the subject of debate for amendments to the codes.