Index Change Prompts Record Outflows From South Africa Stocks

(Bloomberg) -- Foreign investors’ sales of South African stocks jumped to a record as emerging-market index changes by compiler MSCI Inc. prompted money managers to adjust their holdings.

. Net outflows surged to 13.3 billion rand ($894 million) of South African shares Tuesday, compared with net purchases of 389 million rand in the previous session, figures from stock exchange operator JSE Ltd. show.

. MSCI added twenty-six China shares, 30 equities from Saudi Arabia and eight Argentine securities to its emerging-market stock benchmarks , at the expense of South African stocks in changes that took effect Tuesday. Net sales of Naspers Ltd. were the largest Tuesday, at 4.9 billion rand. Nedbank Group Ltd., Hyprop Investments Ltd., Bidvest Ltd. and FirstRand were also in the top five, the JSE figures show.

. “South Africa’s weighting went from 6.34% to 6.05% in the MSCI emerging market index,” said Matete Thulare, an analyst at FirstRand Bank in Johannesburg.

. Read about the impact of the outflows on South Africa’s rand

. MSCI is the world’s biggest index compiler and its emerging-markets index is the most important for the asset class, with as much as $1.8 trillion in assets benchmarked to it as of June 2018. South Africa’s main stock index was 0.5% higher as 11:03 a.m. in Johannesburg Wednesday.

. --With assistance from Simbarashe Gumbo and Filipe Pacheco.

. To contact the reporters on this story: Adelaide Changole in Nairobi at achangole2@bloomberg.net;Colleen Goko in Johannesburg at cgoko2@bloomberg.net

. To contact the editors responsible for this story: Blaise Robinson at brobinson58@bloomberg.net, John Viljoen

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Index Change Prompts Record Outflows From South Africa Stocks