The 4,2% move in the rand from a best level of 6,3650 per US dollar on May 20 to a worst level of 6,6350 on May 26 has spurred net foreign purchases of South African assets.
In the past four trading days, foreigners bought a R1,897-billion worth of South African bonds and a net R355-million worth of South African equities compared with net purchases of R490-million of bonds and net sales of R18-million of equities in the prior week.
On Friday, the JSE all share index reached a new record high above 13 800, while the benchmark R153 South African government bond rallied by 11 basis points to 7,865%.
United States residents are in the process of climbing into non-US assets. In March and April, US mutual equity funds that invest outside the US attracted net inflows of $18,2-billion compared with net inflows of only $5,7-billion for domestic equities, according to the Investment Company Institute. – I-Net Bridge