Foreign Investors Record Net Capital Inflow into South African Bonds and Stocks for the First Time Since 2022

Forex - The South African Reserve Bank reported in its Quarterly Bulletin published on Friday that South Africa experienced its first net inflow from foreign investors into its debt and equity markets since 2022. According to the Quarterly Bulletin, portfolio inflows reached 45.6 billion rand ($2.7 billion) in the third quarter, whereas there had been an outflow of 20.1 billion rand in the previous three months.

Net local debt purchases by non-residents amounted to 41.4 billion rand, compared to a purchase of 13 billion rand in the previous quarter. Net purchases of domestic stocks listed on the Johannesburg Stock Exchange totaled 4.1 billion rand, a stark contrast to net disposals of 33 billion rand in the second quarter. This marks the first net purchases since the first three months of 2022.

The quarterly report also included the following information: "Due to local entities’ debt repayments outweighing the equity investments made by non-resident parent companies, direct foreign investment outflows in the third quarter amounted to 3.2 billion rand, compared to an inflow of 16.6 billion rand in the previous three months. This represented the first outflow since the third quarter of 2020."

The ratio of household debt to disposable income rose from 61.8% in the previous three months to 62.4% in the third quarter. South Africa's total external debt increased from $158.3 billion at the end of March to $163.8 billion at the end of June.