BofA notes shifts in foreign ownership across South African sectors

Published 11/02/2025, 11:32
© Reuters.

Bank of America (BofA) released a report detailing significant changes in foreign ownership (FO) across various sectors of the All-Share index. According to the data, the index, which was 57% foreign-owned at its peak in 2020, has experienced a decrease in foreign ownership. Resources, financials, and industrials have all seen a decline in FO compared to January 2024.

The report highlights that as of January 24, 2025, the resources sector’s FO based on free-float is at 34%, down from 52% the previous year. Financials and industrials are also down to 36% and 28% from 39% and 33%, respectively. Despite this overall decline, select buying was observed, with 57% of stocks sold reaching 4 stock highs and 12 lows.

Notably, companies like Anglo American (JO:AGLJ), Mondi (LON:MNDI), and Investec (LON:INVP) plc, which are inward listed, have contributed to a technical 10 percentage point fall in the All-Share’s foreign ownership.

The analysis by BofA also points out that 87% of the foreign ownership is concentrated in sectors such as precious metals, banks, life insurance, telecommunications, media, technology, and consumer goods.

In terms of currency hedges, 46% of foreign ownership is in South African Rand hedges, while 37% is in domestic stocks. The report indicates a preference for banks over technology, media, and telecommunications (TMT), followed by resources and consumer sectors.

Foreign investors have been selling off their holdings in financial and industrial stocks, with 55% of these stocks sold, which is a slight decrease from 58%. In the resources sector, the sell-off was at 50%, up from 47%.

Since the establishment of the Government of National Unity on June 14, foreign investors have bought a net R44 billion in bonds but have sold a net R85 billion in equities, averaging a 54% sell-off in stocks.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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