While a downgrade to junk for SA’s sovereign debt rating in 2020 is already priced into markets, knock-on effects such as higher inflation and lower local returns from a stagnant economy will erode investor wealth. As a result, capital will continue to flow offshore.

"While SA will present opportunities when the economy settles and some funds flow back into the country, at the moment offshore markets offer better risk-adjusted returns," says Stonewood Capital director Eldon Beinart.

BL Premium

This article is reserved for our subscribers.

A subscription helps you enjoy the best of our business content every day along with benefits such as exclusive Financial Times articles, ProfileData financial data, and digital access to the Sunday Times and Sunday Times Daily.

Already subscribed? Simply sign in below.

Questions or problems? Email helpdesk@businesslive.co.za or call 0860 52 52 00. Got a subscription voucher? Redeem it now