Why are foreign investors still avoiding SA's dirt-cheap stocks?
Offshore investors have been net sellers of South African equities for 11 straight days, the longest streak of outflows in six months
South African stocks are the cheapest on record relative to their emerging-market peers, but they are still not cheap enough for foreign investors. Offshore players were net sellers of South African equities for 11 straight days to the end of Tuesday, the longest streak of outflows in six months, according to JSE data. They have sold a net R25.4bn in the year to date, the largest outflow for the corresponding period since Bloomberg started compiling the data in 1999. The JSE is the cheapest relative to the MSCI emerging markets index since Bloomberg started tracking the data, based on estimated price-earnings ratios, a key attraction for value buyers. But stagnant economic growth, worries over electricity supplies and the volatile rand have deterred potential investors in Africa’s biggest equity market, with a capitalisation of about $473bn. “Chronic economic growth underperformance has exerted a drag on the JSE,” ETM Analytics economist Jana van Deventer said. “The fact that foreig...
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.
Subscribe now to unlock this article.
Support BusinessLIVE’s award-winning journalism for R129 per month (digital access only).
There’s never been a more important time to support independent journalism in SA. Our subscription packages now offer an ad-free experience for readers.
Cancel anytime.
Questions? Email helpdesk@businesslive.co.za or call 0860 52 52 00. Got a subscription voucher? Redeem it now.