JSE error shows foreigners continue to sell SA equities

Corrected data shows foreigners did not buy nearly R100bn worth of local equities since May.

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:

 

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Hey JSE, I really hope you fire your computer programmers and their managers. This is an absolutely shocking mistake that is so elementary.

Can anyone trust your data if you make such basic mistakes?

Be easy on them programmers…
Executive director of Post-Trade Services, Dr Leila Fourie, has resigned and will not be replaced.

Quite so. It is the ultimate responsibility of the “users” of any system to correctly test all programs before they are installed in the live environment.

I notice Dr Leila Fourie did indicate in Sep 2015 she would be stepping down from her post in mid 2016. She then indicated she will stay on at the JSE but then resigned instead of staying on in another post.

what would you expect from a failed state about to become “junk”!

usual helpful reply from you – go see a shrink.

It can only be Robert that is so good and high and mighty that would already call us a failed state. Did he not indicate he does not invest in the junk in Aus? but globally? and only happens to live in Aus?
At least the JSE is up 69% in 5 years vs Aus All Ord only up 24%. This means Aus is a failed state to the power of nearly 3.

I wonder whether old Bob in Sydney is actually in Sydney. Maybe just a bitter wannabe an ozzie.

it never really made sense given the movement of ZAR!!!! ZAR would have been much much stronger than ZAR14.30/USD. Common Sense Really!!!!

Does this effect the balance of payments? Will the rand will drop again?

Nope…. I doubt it. The value of the ZAR is driven by international supply and demand pressure which I would pretty much wager is independent of what the JSE SARS or any other Gov institution might think the value of the ZAR should be. The question is how will this info be digested within the JSE itself as in could it possibly effect share prices or index fund prices which I would yet again think is independent of this calculation as share prices are derived from day to day trading and index fund prices are a derivative thereof

Credibility shot to pieces. Can we believe anything you say now ?

Ryk/Moneyweb, is the JSE at risk of a regulatory fine (imposed by the FSB) and/or a criminal fine (imposed by the courts) and/or a civil claim?

Civil action is also possible.
I know of investors basing new investments on the incorrect data.

This is very positive actually. The acknowledgement of the mistake and the wording of this statement proves that the JSE is not managed by a ANC cadre.

The statement could have read: “We have found that a counterrevolutionary third force tried to undermine the good story we have to tell by injecting a plus instead of a minus into the system of the JSE. These spreadsheets are also very Eurocentric and needs to be made more compliant with the skills of our people.”

We have got a lot to be thankful for….

Hahaha

Agree

But, (and I know I am about to be stoned) – (I will therefor ask this as a question): there are many more females in senior management than at any other time in the history of the JSE – could this have an influence on the mistake??

Not true.
There 7 females and 8 Males (including company secretary)
Now that Executive director of Post-Trade Services has resigned (and won’t be replaced) then there’s only 6 females.

I hear you, but I am under pressure to disagree with you…….. I always make mistakes, but my wife never makes any….. So, you must be wrong…..

Fingernails are longer hence the problem with the keyboard…………………….pluses and minuses.

Ryk, you blocked my comment under another article – let us see if you are comfortable to publish this being my call for Newton-King to resign.

A fault of this magnitude, that has been undetected so long shows me the top people at JSE are not up to the standard required – even in SA

In the UK, she would be packing her bags by now.

When I saw the report about 2 weeks ago that we had had R100 billion inflow, I suspected that their might be an error.
It was too good to be true.

The sign of things to come? Not just government incompetence.

the thing that always bugs me in these situations is how the person who screwed up tries to downplay the importance.

@ the JSE: if no-one uses your precious/inaccurate report, why bother publishing it then !?

except …. oh dear …. it seems that the report was referenced in the MPC minutes. which means the tosh put out by the JSE influenced a number of key decisions including the setting of the interest rate.

fortunately no-one relies on the MPC or the interest rate to make their decisions.

except …. oh dear ….. IN FACT THEY DO. MILLIONS OF PEOPLE AND BUSINESSES DO.

will someone, anyone, ever take responsibility for screwing something up in this otherwise great country of ours ????

This is not the 1st time major errors or IT systems failing at the JSE.
What bothers me is how can the stats be supplied for 3 months and all trades local and global are done via brokers and not a single broker questions the facts based on their own trade data icw buying and selling of global traders/investors???????
Are brokers not allowed to talk about the data from the JSE?

End of comments.

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