Cap­i­tal out­flow from SA was sig­nif­i­cant

The Star Early Edition - - COMPANIES - Vi­asen Soo­bra­money

MORE THAN R350 bil­lion has left South Africa over the past 18 months, rep­re­sent­ing a sig­nif­i­cant cap­i­tal out­flow.

PSG Wealth re­gional di­rec­tor Amelia Mor­gen­rood yes­ter­day told Busi­ness Re­port that she be­lieved a com­bi­na­tion of fac­tors had prompted the out­flow.

“There was a sur­vey con­ducted re­cently in which the JSE was ranked num­ber one in terms of re­turns over the past 100 years,” Mor­gen­rood said. “Sim­ply put, it was the best-per­form­ing stock ex­change on Earth.

“How­ever, that has changed. What we have seen is that around R270bn has flown out of the JSE in the past 18 months. We have also seen av­er­age South Africans pre­fer­ring to in­vest their cap­i­tal out­side the coun­try in the re­gion of around R80bn.”

Mor­gen­rood cited the lack of eco­nomic lead­er­ship and the ab­sence of proper eco­nomic pol­icy as key rea­sons for the cap­i­tal out­flow.

“It’s dif­fi­cult to un­der­stand why for­eign­ers are leav­ing. South Africa has al­ways been seen as a very en­tre­pre­neur­ial coun­try with our chief ex­ec­u­tives on a par with much of the global play­ers,” she said.

Mor­gen­rood said some of the rea­sons for the sig­nif­i­cant cap­i­tal out­flow could be: • In­vestors were scared of rad­i­cal eco­nomic trans­for­ma­tion. • The eco­nomic down­turn. • In­vestors will re­turn when they be­lieve they can earn bet­ter re­turns.

She said it was likely that a com­bi­na­tion of th­ese fac­tors in­flu­enced the cap­i­tal out­flow.

S&P warns more sov­er­eign down­grades likely this year

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