South Africa stock loses $3.7b as foreign investors withdraw from its market
South Africa, Africa’s biggest economy, is presently experiencing its most extended streak of foreign equity outflows in five years, with investors withdrawing a considerable $3.7 billion from the regional stock exchange because October 2024, an information released by the Institute of International Finance (IIF) revealed.
South Africa, Africa’s largest economy, is currently experiencing its most extended streak of foreign equity outflows in 5 years, with investors withdrawing a considerable $3.7 billion from the local stock market since October 2024, a data launched by the Institute of International Finance (IIF) revealed. South Africa is experiencing significant foreign equity outflows, with $3.7 billion withdrawn since October 2024. Economic stagnation and decreasing per capita income are adding to foreign investor hesitancy.Emerging markets like Brazil, Turkey, and Taiwan are attracting more inflows, contrasting South Africa’s unpredictable foreign investment trends. A Reuters report noted that the recent withdrawal, amounting to almost double the $1.9 billion in outflows taped from 2023 to early 2024, highlights increasing investor doubt towards stocks listed on the Johannesburg Stock Market (JSE), regardless of its status as one of the world’s top-performing markets this year. According to Bank of America, South African equities have actually delivered a 29% return in dollar terms year-to-date, ranking amongst the global top five entertainers, behind just Greece, Spain, Germany, and Italy. This strong performance has actually not equated into sustained foreign interest. Graham Tucker, portfolio supervisor at Old Mutual Financial investment Group, observed: “Financiers are aiming to diversify outside the U.S., but that doesn’t instantly make South Africa a leading destination.” He included that South Africa’s stock exchange appears cheap, however this pricing shows over a decade of financial stagnation and decreasing per capita income, which underlies the cautious investor sentiment. Emerging market shift excludes SA On the other hand, the broader emerging market landscape is witnessing a renewal in specific relative stock exchange. While the South African stock exchange continues to record gains, the nation’s economy remains delicate, as evidenced by stagnant GDP growth in Q1, 2025 According to IIF information, countries such as Brazil, Turkey, Taiwan, and South Korea are drawing in increasing capital inflows as fund managers diversify far from US assets. In contrast, South Africa risks being left behind in this pattern. The JSE has seen higher trading volumes in current weeks, foreign investment remains volatile. Exchange data shows that in the previous week, non-South African investors bought stocks worth over 30 billion rand (roughly $1.6 billion), reportedly the greatest in years, but sold about 24.7 billion rand ($ 1.3 billion) during the exact same period. With simply a couple of weeks into the 2nd half of 2025, non-resident financiers have been net sellers of $5.9 billion in equities, nearly $1 billion more than during the same period in 2024. Tucker even more commented on the circumstance, noting: “Foreign investors tend to behave like travelers. They’ll come for a trade, especially in gold stocks when the product is growing, but they won’t stay without long-term policy certainty.” While the South African stock exchange continues to tape-record gains, the country’s economy remains fragile, as evidenced by stagnant GDP growth in the first quarter of 2025, mainly due to 6 consecutive months of contraction in the mining and production sectors. Economic experts, such as Isaac Matshego, attribute the capital flight to more comprehensive concerns about South Africa’s financial principles. “The increase in overseas trading volumes speaks more to global unpredictability than improved domestic self-confidence,” he kept in mind. Olamilekan Okebiorun
South Africa, Africa’s biggest economy, is presently experiencing its most extended streak of foreign equity outflows in 5 years, with investors withdrawing a significant $3.7 billion from the regional stock market because October 2024, a data launched by the Institute of International Finance (IIF) revealed. He included that South Africa’s stock market appears cheap, but this rates reflects over a decade of economic stagnancy and decreasing per capita income, which underlies the careful investor sentiment. While the South African stock market continues to record gains, the country’s economy remains vulnerable, as evidenced by stagnant GDP development in Q1, 2025 According to IIF data, countries such as Brazil, Turkey, Taiwan, and South Korea are drawing in increasing capital inflows as fund managers diversify away from United States properties.
