Factors influencing stock market participation among South Africa’s black middle class

Abstract

The study explored the factors influencing stock market participation among South Africa’s black middle class. Despite its significant growth post-apartheid, this demographic’s equity ownership of the Johannesburg Stock Exchange remains low. Adopting a qualitative approach, the study explored social, economic and psychological barriers and enablers that shape the investment decisions of this demographic. Significant themes that emerged include accessibility barriers, perceived complexity, early financial socialisation and education, motivators driving stock market participation, financial and economic constraints, lack of exposure and awareness, the impact of online investment platforms, and the lack of trust and fear of financial markets. These findings suggest that though the broader black middle-class has grown in both stature and prominence, the majority remained at the periphery of financial inclusion due to historical factors, limited financial knowledge and resources, and their risk aversion. Those who invested highlighted their early financial socialisation and education and other motivators that shaped their financial behaviour. These insights provide a deeper understanding of what factors hinder or enable stock market participation within this demographic, which policymakers and financial institutions can use to develop solutions to address this disparity and promote greater participation among the black middle class.