Foreigners did not pile into nearly R100 billion worth of South African equities during a record streak of 36 consecutive trading days since May, but were rather net sellers of securities to the tune of more than R30 billion.
The JSE said in a communication issued on Sunday, that a programming error caused the trading data for the period between May 31 and July 20 to be incorrectly calculated.
Moneyweb reported on this apparent inflow of foreign capital and many commentators attributed the inflow to foreign investors looking for high-yield securities in developing markets. Several commentators also suggested that this capital inflow was a major reason why the rand strengthened against international currencies during the period.
The JSE communication states:
“It has come to our attention that due to a programming error affecting the manner in which we extract statistical data from our core transactional systems, the non-resident (foreign trading) statistics for the Equity Market for the period 31 May to 20 July 2016, were incorrectly calculated.
“The programming error was corrected on 21 July 2016 and daily reports received from 22 July 2016 are accurate as is the source data.
“The correct non-resident statistics for the period are: May 2016 (net sales of R16.1 billion); June 2016 (net sales of R20.3 billion); July 2016 to date (net purchases of R0.05 billion). This compares to the previously published non-resident statistics of the same period: May 2016 (net purchases of R6.4 billion); June 2016 (net purchases of R63.8 billion); July 2016 to date (net purchases of R27.9 billion).
“Subscribers will receive corrected statistics on 25 July 2016 dating back to 23 May 2016.
“We have taken immediate steps to correct the statistics and we are considering additional measures to avoid a reoccurrence. We recognise the importance of this data to all stakeholders and apologise for the miscalculation.”
Several commentators have also expressed their dismay on twitter:
This a massive massive swing – why did it take nearly 3 months to pick up?? https://t.co/KjyVEuMTjM
— Theo Vorster (@sakegesprek) July 24, 2016
So foreign puchases for 31May to 20July were indicated as +R98.1. But they were actually -R35.9b. A swing of -R134b. Big balls-up. #JSE
— Karin Richards (@Richards_Karin) July 24, 2016
JSE computer error massively overstated foreign buying over last three months. pic.twitter.com/BdIcbonkug
— Stuart Theobald (@rationalhill) July 24, 2016
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