Foreign investors sold South African equities and bonds valued at just more than R20bn over the past week, putting a figure to the sharp drop in the value of the rand. SA suffered a collateral damage as sentiment towards emerging markets deteriorated, which played out in the selling of local banks and retailers in particular. An index of the leading banks has tumbled 8% over the past week, in its biggest weekly drop in more than a year, while that of general retailers sank at least 6%. Markets have generally been twitchy about emerging markets in recent weeks amid high expectations that interest rates will increase at a faster pace in the US than initially envisioned, thus leading to capital outflows from emerging markets. Foreigners were net sellers of local equities to the value of R10.6bn this past week, trimming the year-to-date net purchases by about R18bn, according to the JSE’s weekly data. An additional net R10bn left local bonds in the review week, helping push up bond yiel...
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