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Foreign investors have pulled billions out of SA thanks to government

Foreign investors have pulled billions out of SA thanks to government

Financial research group, Powerstocks has released a set of graphs showing a mass exodus of international investors from the JSE.

“Since the September 2013 foreign-flows peak – achieved two months before SA fell into a business cycle recession – foreigners have dumped an unprecedented net R286 billion in SA equities and government bonds,” said Dwaine van Vuuren, CEO of Powerstocks.

“JSE shares accounted for 74% of the outflows which brings the total rolling annual (12-month) outflows to R163 billion,” he said.

Van Vuuren specifically noted that while emerging markets have experienced outflows within the last few years, these have been isolated to China. In fact, emerging markets as a group have experienced inflows for every quarter since the end of the financial crises in 2009.

According to van Vuuren, the majority of the money lost by South Africa could have been prevented as they were primarily caused by factors well within the country’s control.

He cited the following eight reasons why international outflows had increased so drastically, based on factors cited by international ratings agencies.

  • SA’s working age population is growing faster than its economy, and unemployment is at 13-year highs and growing.
  • The SA economy is going nowhere, and its growth rate is far below its African and EM averages.
  • Government finances are perilous – its debt is at record levels and growing, State owned enterprises (SOE’s) are bleeding us dry and corruption/wasteful expenditure is widespread and unchecked.
  • Lack of clear policies across various sectors has led to a plunge in confidence and a widespread private sector investment strike.
  • Government, business and labour are focussing on narrow self-interests instead of working together in unison for the best of the country as a whole.
  • Most interventions by the government in the economy are focused on regulation and red tape, as opposed to growth enhancement and confidence building.
  • Protracted political tensions generate policy uncertainty and impede structural reforms.
  • The economy has failed to benefit from the collapsing rand (the rand is no longer a traditional shock-absorber).

The graphs below outline outflows over the past 12 months

Read: Nando’s could be heading to the stock market: report

BusinessTech's Staff Writer is directly plugged into the South African Internet backbone, and spits out press releases and other news as they receive it. They are believed to be cl...
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  • victory

    Stop being selfish guys now bcouse absa is implemented for wrong doing investors pull out? Selfish selfish

    • Guy Morel

      ahahahahhahaha. you . are . FUNNY!

  • kid black

    Well if you alienate the “white monopoly”, kill and rape their kin, and squander their tax money… what do you expect.. all of us sitting around a campfire singing kumbaya?

    • Because whites can’t dance?

      • Chris

        Well I most certainly cant dance

  • samoan_tiger

    Oros did say the economy and rand must fall

  • Blapartheid Zulu

    exactly what the anc wanted. Go create jobs and make billions somewhere else.

  • koos

    This is scary stuff!!! Possibly the main reason behind recent rand strength?? If so expect a dramatic rand weakness post budget???

  • Robert Dixon

    And only yesterday Rob “red” Davies was ranting on about how the guvvamunt would tell everyone to push off if it did not like how things are!
    Stampede time!

  • MelcolmX

    Imagine if SA was only one party like….ANC Welcome to the Republic of Zombies!

  • Lacrimose Wolfe

    We’re not a country any more. South Africa’s just a high-stakes poker game & the fix is in. Every day we read how we’ve been played, robbed of gazillions. This govt playing Russian Roulette with 52 million people’s lives and they are just being allowed to carry on.

    • Runnin Bare

      But hey, the banks must be fined heavy for collusion. ANC is a law unto themselves, never any consequences for wrong doing.

      • Lacrimose Wolfe

        Ja, kind a crazy when the banks are defrauded etc then they will pursue perps for years to the nth degree until they get a conviction but when shoe is on the other foot they want to negotiate a 10% fine!

  • Chris

    Well done to the cANCer and showerhead! Strange how we were less than R4 per dollar in 1994. Well done once again!

  • Lagmygataf

    UK is a Kingdom as it is ruled by a King.
    Japan is called an Empire as it is ruled by an Emperor.
    South Africa is for sure a Country

    • 小杜 (xiao du)

      Never a truer word spoken!

    • L BS

      Ha ha ha ha you just made my entire weekend!

    • L BS

      Ek Lagooknoumyalieaf ☺ Het dit gedeel!

  • SA First

    Investors (who create jobs and growth) are bullish on SA, but bearish on Zuma and Saxonwold Shebeen people

    • Oran Gutan

      As someone else said: “Give any African country to whites and they will make it a paradise in 15-20years. Give Switzerland to blacks and it will be a desert in the same amount of time.”

  • Peter the Observer

    Another good story to tell proudly brought to you by the ANC!!

  • Oran Gutan

    SA – the slow train smash!

    And the Showerhead Emperor is playing the fiddles.

  • BallsToTheWall

    @ Staff Writer: Why not flip the coin and also show us some figures for inflows for the same period?

    • Wollie Verstege

      Doesn’t really matter when the NET outflow is R286 billion since 09/2013. That means the Actual outflow was higher but offset by some inflows.

      • BallsToTheWall

        Ok, but where did you pick up these were net outflows in the article?

        • Wollie Verstege

          Second paragraph in bold letters.

  • Louis Botes

    Jabba the Hut and his minions rules this big shebeen called ‘Suff affica’

    Investing in South Africa is similar to playing monopoly blind-folded.

    Imagine where SA would really be without Pravin Gordhan…

  • paterdear

    It’s called radical economic transformation, or theft.

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