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In today's blog post we take a look at the latest market statistics from the JSE showing the weekly buying and selling of shares listed in the JSE by foreigners. We will take a look at the numbers for the last 5 weeks
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Are foreigners buying or selling JSE listed shares?
The graphic below shows the total value of net buying/selling by foreigners of JSE listed shares for the year to date as well as the last 5 weeks, net buying or selling of listed shares on the JSE. Its always interesting to see whether foreigners are net buyers or sellers of South Africa shares. Often net selling is accompanied by a weakening exchange rate as foreigners pull money out of the country leading to exchange rate weakness.
The dark grey line shows the net buying/selling values of shares by foreigners for the year to date. A positive value reflects that foreigners have purchased more in terms of value than sold for the year to day. So far for 2018, foreigners have bought about R16.4billion more in shares than what they sold.
However when looking at the dashed red line it shows the weekly net purchases/sales by foreigners. And of the 6 weeks in the above graphic, in only two of the weeks foreigners were net buyers of shares, in the other 4 weeks they were net sellers. For the week ending 18 May, foreigners were net sellers of over R10.7billion in shares. Perhaps they believe in the old saying, sell in May and go away. While the weekly graph shows that sentiment by foreigners have been pretty negative in recent weeks, question is what did these numbers look like a year ago? Was the same trend observed 12months ago? The graphic below compares the net buying/selling of shares by foreigners for the same time period as the above but for 2017.
However when looking at the dashed red line it shows the weekly net purchases/sales by foreigners. And of the 6 weeks in the above graphic, in only two of the weeks foreigners were net buyers of shares, in the other 4 weeks they were net sellers. For the week ending 18 May, foreigners were net sellers of over R10.7billion in shares. Perhaps they believe in the old saying, sell in May and go away. While the weekly graph shows that sentiment by foreigners have been pretty negative in recent weeks, question is what did these numbers look like a year ago? Was the same trend observed 12months ago? The graphic below compares the net buying/selling of shares by foreigners for the same time period as the above but for 2017.
While recent weeks of 2018 has been relatively negative, during the same time of last year, foreginers were net sellers of over R60billion worth of shares from the start of 2017 up to end of May 2017. While currently foreigners are still net buyers of South African shares so far in 2018 of roughly R16billion. In 2017, over the same 6 week period, foreigners were net sellers of shares in 5 out of the 6 weeks.
So while we might think sentiment has turned south, looking back at 2017 over the same period of time one can see that sentiment was a lot more negative 12months ago compared to now.
So while we might think sentiment has turned south, looking back at 2017 over the same period of time one can see that sentiment was a lot more negative 12months ago compared to now.