ANALYSIS: JSE bulls’ run through the gloom may not be over
At a time of a red-hot market, foreign investors have shunned SA. But this could soon turn
The JSE touched record highs of 58,163 points last week. This is remarkable not only because it comes despite the dark clouds over the political economy, but also because of deep aversion from foreign investors. To some extent, it’s a case of a rising tide lifting all boats: overseas, the US S&P 500 index is at a high, as is the MSCI world index. And the MSCI emerging market index is 5% short of a high. But that doesn’t explain the JSE’s giddy rise. While it’s true that foreign investors are scrambling into emerging equity markets on a scale not seen since 2010, their enthusiasm does not extend to SA equity. In the first nine months of 2017, total net equity sales by foreigners hit R49.6bn. This means SA is on track to eclipse the R56.6bn record set in 2008 at the height of the global financial crisis. Foreigners bought more than they sold in only one month this year — July. But, even then, the R10.6bn in net equity purchases were mostly driven by Naspers, which accounted for R9.8bn...
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