South Africa is a major commodities producer, but that exposure comes by way of precious metals such as palladium and platinum. Africa’s second-largest economy is not anywhere close to being one of the continents major oil players let alone is it a significant contributor to global oil output.
“The trend could, maybe, be anecdotally explained by broad risk-on/risk-off buying/selling. If investors have buying or selling broad emerging-market funds, for instance, based on crude, perhaps the likes of South Africa and Turkey go along for the ride?,” adds Barron’s.
“Investors have cut their short positions in the largest ETF focused on the country to the lowest level since 2010, data from Markit Ltd. show. That accompanied a surge in net capital inflows into 41 ETFs buying stocks in South Africa to a five-year high of $136 million in the first quarter, the data show,” according to Bloomberg.
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