Investors in South African stocks can thank trade hostilities between China and the US for turning this month into the worst August they\u2019ve experienced in 21 years.<\/p>\n
Johannesburg\u2019s benchmark index has fallen 4.5% since the month started, as of Wednesday\u2019s close, the biggest August decline since 1998 and the steepest retreat for any month since October last year. Conflict over tariffs between the world\u2019s two largest economies has spurred investors to flee riskier assets, including net sales of R23.4 billion ($1.5 billion) of South African stocks since Aug. 1.<\/p>\n
\u201cWhen two elephants fight, it is the grass that suffers,\u201d said Peter Takaendesa, a money manager at Mergence Investments in Cape Town, which oversees about R35 billion. \u201cThe impact of their war is being felt in the emerging markets.\u201d<\/p>\n
The picture could have been worse: the benchmark index has been propped up by gains in rand-hedge stocks benefiting from the currency\u2019s 6.5% retreat against the dollar this month because of revenue earned abroad, and by the best month for gold shares since February 2016 as jittery investors take refuge in the traditional haven of bullion.<\/p>\n
\u201cThe rand hedges have helped, because domestic counters are down even more than that, particularly retailers and banks,\u201d Takaendesa said by phone. \u201cDomestic South African stocks have been much weaker than is shown by the index.\u201d<\/p>\n
General retailers have tumbled more than 8% this month as companies including Mr Price Group Ltd bemoaned the state of the South African economy and weakness among consumers. Bank stocks have lost 6%, pummeled by the slide in the currency.<\/p>\n