Foreign investors are selling off South African bonds and equities at the fastest pace on record to the tune of R70-billion.
JOHANNESBURG - More than R70-billion has flooded out of South Africa’s bonds and equities in just six months.
This is because foreign investors have decided to take their money elsewhere.
In addition, the value of the bonds has also decreased significantly.
Despite the outflows, the country’s main stock index has increased to almost 11 percent, which means local investors are helping prop up South African assets.
Should the situation get worse, government will need to seek help.
Inkunzi Wealth Group director Owen Nkomo said there is a loss of confidence in the country.
"This latest move to help Eskom... picture how this looks from the other side.
"Looking at the impact it has on the fiscus, it's creating a different picture, and it's not good," he said.
IRR chief economist Ian Cruickshanks said we need foreign investors because we need their capital.
"We need to somehow switch to a capital-rich country," he said.
Moody’s is the only rating agency that still grades South African debt higher than junk status.