Most of the revenue earned by JSE-listed companies is earned abroad. This has important investment implications, says The Johannesburg Stock Exchange is primarily composed of companies registered in South Africa that operate within the country and generate a significant portion of their revenue in rand .
Examples of these so-called rand-hedge shares include Richemont , British American Tobacco , Anheuser Busch , and BHP Billiton, one of the world's leading commodity-producing companies with its primary listing on the Australian Stock Exchange and secondary listing on the JSE. This is evident when comparing the average movement of the top five largest FTSE/JSE All Share companies that earn most of their revenue outside South Africa, with the top five largest companies that primarily generate revenue in South Africa in rand .
Rand-hedge shares generally benefit from a weakening South African currency. But it's important to note that very few rand-hedge shares provide complete protection against rand depreciation, and many demonstrate asymmetric exposure.