A review of the efficiency of the JSE Securities Exchange

The ability of stock markets to function and operate efficiently has long been aquestion posed by academics and investors alike. In an efficient market, allinformation is reflected within share prices and therefore leaves no chance foreconomically viable arbitrage opportunities. Although this notion has beensupported by the Efficient Market Hypothesis, it has come under scrutiny over thelast three decades.This report has attempted to establish the extent to which the JSE SecuritiesExchange is an efficient market, based on the outcomes of previous empiricalstudies done from 1974 and 2006. Using the Historical Research Methodology, ithas been found that overall the JSE Securities Exchange operates as an efficientmarket, in all forms of the Efficient Market Hypothesis. Along with this conclusionhowever, is an indication that the market also show signs of inefficiencies forcertain stock types, which may have been exploited by shrewd investors