THE INSIDE VIEW ON JSE OUTFLOWS

When the CEO of South Africa’s major stock exchange, the JSE’s Leila Fourie, hit the headlines recently for saying outflows of foreign capital from the exchange kept her awake at night, many investors would have been left wondering how alarmed they should be and what action they should take. While the country’s structural issues are well-known and have been publicised for years, epitomised by our sovereign credit rating downgrade, Fourie’s comment was not contextualised. Immediate questions for retail investors would have included the timing of what was a seemingly worrying view. What implications do these outflows have for asset prices, liquidity and investor returns on the JSE?

Though the answers appear to be simple on the surface,