Johannesburg - The JSE all share index yesterday firmed 0.54 percent, shrugging off the JSE’s embarrassing error that saw it distribute incorrect information about foreigners piling on South African equities when they were, in fact, net sellers.
The JSE Top 40 index was up 0.56 percent, while the financials index surged 1.05 percent. The industrials index gained 0.8 percent and the rand remained marginally unmoved, opening at R14.30 to the dollar, hitting a high of R14.42 at 4.25pm before paring the losses to R14.3853 at 5pm.
The resources 10 index was, however, down 0.87 percent.
The JSE on Sunday apologised for distributing incorrectly calculated data to the equity market for the period between May 31 and July 20.
The bourse blamed “a programming error” which, it said, had since been corrected.
Miscalculation
It said a programming error affecting the manner in which it extracted statistical data from its core transactional systems caused the miscalculation. The glitch saw the JSE put capital inflows for the period at R98.1 billion, when, in fact, there had been an outflow of R36.4bn.
The incorrect JSE data for foreign investors’ equity transactions showed net foreign purchases of R6.4bn in May, R63.8bn in June and R27.9bn in July to date.
But the correct data showed that foreigners had been selling South African equities with net sales of R16.1bn in May and R20.3bn in June. There were net purchases of R50 million in July to date.
“We have taken immediate steps to correct the statistics and we are considering additional measures to avoid a re-occurrence.
“We recognise the importance of this data to all stakeholders and apologise for the miscalculation,” JSE director for information services Leanne Parsons said on Sunday.
The SA Reserve Bank said yesterday that the incorrect data did not have any bearing on its monetary policy committee’s decision last week.
In its statement, the committee made reference to a “sharp” increase in “non-resident” inflows to the domestic bond and equity markets last month (June) and this month (July).
It said since the beginning of last month, net purchases by foreign investors were R107.3bn.
The bank said last week that since the previous meeting in May the rand had appreciated by 11 percent against the US dollar, by 12.9 percent against the euro and by 23 percent against the pound.
“(The revised JSE data) tells us that there are other reasons why the rand is stabilising,” said Stephen Meintjes, an investment analyst at Momentum SP Reid Securities.
Inflow
Peter Attard Montalto, a senior emerging markets economist at Nomura, said the market was largely taking the massive R130bn data error on foreigner flows data in its stride.
In the year to date, the total inflow into the South African bond market was R22bn, according to Investec.
Econometrix chief economist Azar Jammine said the rand had been expected to weaken with capital outflow.
“That has not been the case. The rand has been remarkably stable. That is surprising,” Jammine said. “Capital inflows into the bond market because of attractive interest rates in South Africa supported the rand.”
BUSINESS REPORT