SA market 'not sexy'

Cape Town - South Africa's popularity as a destination for global investors declined in October.

Bank of America Merrill Lynch's monthly survey of international investors indicates that South Africa is the fifth-least popular emerging market.

Malaysia is the most unpopular, followed by Chile, Taiwan and Israel.

These markets are underweight in investment portfolios. This means exposure to shares in these emerging markets is smaller than their proportional representation in the MSCI index for emerging markets.

Russia, Turkey and Brazil are the most popular countries for emerging-market investors, who have large overweight positions there.

South Africa had a larger underweight position than it had in September.

Investec Asset Management portfolio manager John Biccard said South Africa is currently regarded as one of the less "sexy" emerging markets. "Investors are currently looking for risk and turning to countries like Russia and Brazil, which are showing higher growth."

The global appetite for risk has reached its highest level in more than three years.

The global survey took place between October 2 and October 8, and involved 229 fund managers who together administer $616bn.

Investment strategist John Morris pointed out that the rand strength is also making fund managers cautious, and South Africa's economy is inclined to recover more slowly than the economies of other emerging countries.

Technology shares remain investor favourites.

Fund managers are also more optimistic about the economic outlook and company profits.

For the first time in 12 months investors believe that companies have too little debt on their balance sheets.

- Sake24.com

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