The JSE has had a strong start to 2019 despite net foreign selling. What does that say about the sustainability of the gains?
In a recent article on Moneyweb Patrick Cairns discusses the apparent contradiction between the JSE’s performance and foreign investor appetite and justifies it to two reasons:
The first is that there must have been a lot of support for the JSE from local investors. If foreigners have been selling so aggressively, the only way the market could be moving upwards is if there is a lot of money flowing in from South African institutions.
The second point that he notes is that if it is not foreigners that have driven the JSE’s rise, then it is more likely that the gains made on the JSE will be sustainable. This is because flows into the market from local institutions do not reverse as easily as those from offshore.
Click here to read the detail of the article that showcases the South African equity exposure of the largest domestic balanced funds as well as the South African equity exposure of selected domestic balanced funds.