Beware of "JSE Investment" scams

The JSE Limited/ Johannesburg Stock Exchange (JSE) is aware of a several scams (on Telegram and WhatsApp) posing as authorised JSE investment schemes and/or using the names(s) of JSE Executives (including our CEO, Leila Fourie).

In these investment scams, potential investors are urged to deposit money into a bank account and promised quick and guaranteed returns on their investment. These types of groups are not authorised by the JSE and the investments referred to are not authorised or endorsed by the JSE or any members of the JSE Executive. The JSE does not recruit investors in this manner.

The only way to invest on the JSE is via an authorised JSE stockbroker. A list of stockbrokers can be found on www.jse.co.za and then click on 'find a stockbroker' and you will find a list of stockbrokers in your area who will help you to open an account and you can begin your investment journey with the JSE.

Should you suspect a false investment scam group, please report these to the JSE at [email protected].

Debentures are a type of Debt Instrument, similar to a Bond, that companies issue in order to raise capital. Details of Debentures are documented in an indenture, which is a written agreement between the issuer and the holder. Companies pay investors interest for the term of the Debenture. At the end of the lending period, issuing companies usually offer the choice of converting the Debentures into Shares. Debentures are not secured by physical assets or collateral. Investors can buy and sell Debentures through a JSE equity market member.

Who is this for?

Investors who are looking for a fixed income derived from interest which is unrelated to the issuing company’s performance and for investors looking to diversify their portfolios across different asset classes. Companies looking to raise capital could consider doing this through issuing Debentures.

Features

  • Typically provide higher rates of financial return than Government Bonds or bank interest rates.
  • At the end of the lending period, issuing companies usually offer the choice of converting the Debentures into Shares. These are called Convertible Debentures and usually pay a lower interest rate to the lender (the investor).
  • Interest is paid to investors whether or not the issuing company makes a profit.
  • Are transferable (from investor to investor).
  • The debt-equity ratio: The investor should consider the ratio in which debt is used to finance projects and capital compared to that used for Equity. If more debt is used to finance the company, the risk of default should be taken into account.
  • Debentures are unsecured and only backed by the issuing company’s creditworthiness and reputation. The investor is lending money to a business and a Debenture carries all the risks that this involves.

How to get Debentures

To buy or sell Debentures, individuals will need to open a brokerage account with a JSE Equity Market member.

Related Documents

Debentures
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