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.

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