It’s been a tough month for South Africa stocks.
The rand’s gain has sent traders spilling out of shares of companies that generate dollar earnings, which make up almost a third of the benchmark FTSE/JSE Africa All-Share Index. In addition, foreign investors have cut holdings of South African equities amid a sell-off of emerging-market assets triggered by rising US Treasury rates and escalating trade tensions between Washington and Beijing.
“Rand-hedges are under some pressure now,” said Peter Takaendesa, a portfolio manager at Cape Town-based Mergence Investment Managers. “South African shares as a whole haven’t been immune to the general risk-off in emerging-market stocks.”
The benchmark gauge is down 3.1% since June 15, with mining companies including Sibanye Gold and Impala Platinum among the worst performers as the rand gained 1.8% against the dollar.
In that period, foreigners were net sellers of South African equities for 12 days out of 21, cutting inflows this year to R14.4 billion ($1.1 billion).