Johannesburg - Foreign investors bought South African equities in the longest stretch of net purchases since October, using liquidity from economic stimulus in Europe to take stakes in the country’s companies such as retailers.
Offshore investors bought a net R2.1bn of shares on Wednesday and the 11th day purchases exceeded sales, according to data from the Johannesburg Stock Exchange.
Inflows in March were R17.6bn, compared with net sales of R2.1bn in February, according to data compiled by Bloomberg.
There were R23.2bn of inflows in the 11 days and net foreign buying of R14.5bnfrom January to April 1, Nicola Comninos, the JSE’s head of equities, equity derivatives and business intelligence, said in an e-mailed response to questions.
“There’s a search from investors globally for growth and for yield, in this regard South Africa ranks well because of its very strong management,” John Morris, South Africa investment strategist at Bank of America’s Merrill Lynch, told reporters in Johannesburg. “Foreign ownership is very high on the retail sector.”
Investors have put money into emerging markets following the start of bond buying by the European Central Bank as a means of economic stimulus.
Massmart and Mr Price Group led a rally among retailers to a three-week high on Wednesday.
“The thing that would drive it in the short term would be liquidity coming from the EU,” Busisiwe Radebe, an economist at Nedbank, said by phone. “There’s nothing fundamentally from what’s happening in the country that would make it that attractive.”
The FTSE/JSE Africa General Retailers Index rose 1 percent to 84 935.78 by the close on Thursday in Johannesburg.
Massmart [JSE:MSM] added 3.6% to R154, while Mr Price [JSE:MPC] increased 1.7% to R270, the highest on record.