Foreign investors sold off South African equities at the fastest pace in more than a year in the fourth quarter of 2024, as they piled into the nation’s bonds, leading to smaller portfolio inflows.
Portfolio inflows fell 26% to R33.4 billion ($1.8 billion) in the quarter, compared with the prior three months, the South African Reserve Bank said in its Quarterly Bulletin published on Thursday.
Non-residents sold as much as R19.7 billion of South Africa domestic stocks traded on the Johannesburg Stock Exchange, reversing a purchase of 4.1 billion in the third quarter.
The last time there was a selloff of that magnitude was in the third quarter of 2023, the central bank said in response to Bloomberg questions. That was in contrast with foreigners acquiring debt securities amounting to R53.1 billion, compared to R41.4 billion in the prior quarter.
The net sales of domestic shares by non-residents was dominated by the selling of stocks in the software and computer services sector and precious metals and mining, the central bank said.
“The persistent sell-off in the domestic secondary share market by non-residents reflected continued global risk aversion due to, among other factors, ongoing geopolitical tensions, uncertainty around US tariffs, China’s economic slowdown,” the central bank said. “The biggest drivers behind foreigners selling indicates a general decline in investor sentiment toward emerging markets and weak domestic economic growth.”
Economic growth in South Africa has averaged less than 1% a year for more than a decade.
Still, foreigners’ net acquisition of debt securities, including proceeds from the government’s two international bond issuances of $3.5 billion, outweighed their disposal of equity securities, the central bank said.
For the full 2024 year, portfolio investment liabilities switched to an inflow of R6.9 billion, up from an outflow of R99.3 billion in 2023.
BLOOMBERG
