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 foreigners are rotating out of the stock market suggests that the international investor community is not convinced that the growth-enhancing reforms introduced thus far will suffice to kick start the domestic economy.”

Inflows into the country’s bond market of R10bn in 2019 have partly offset the stock outflows. SA relies on portfolio inflows to fund a current-account deficit that swelled to 3.5% of GDP in the third quarter of 2018.

The country’s stock market is missing out on the “wall of money” heading into emerging markets due to a dovish Federal reserve, thawing trade tension and easing concerns over global growth, according to the Institute of International Finance.