“There was a survey conducted recently in which the JSE was ranked number one in terms of returns over the past 100 years,” Morgenrood said. “Simply put, it was the best-performing stock exchange on Earth.
"However, that has changed. What we have seen is that around R270bn has flown out of the JSE in the past 18 months. We have also seen average South Africans preferring to invest their capital outside the country in the region of around R80bn.”
Morgenrood cited the lack of economic leadership and the absence of proper economic policy as key reasons for the capital outflow.
“It’s difficult to understand why foreigners are leaving. South Africa has always been seen as a very entrepreneurial country with our chief executives on a par with much of the global players,” she said.
Morgenrood said some of the reasons for the significant capital outflow could be:
- Investors were scared of radical economic transformation.
- The economic downturn.
- Investors will return when they believe they can earn better returns.
- She said it was likely that a combination of these factors influenced the capital outflow.