South Africa: For Many SA Businesses, the Grass On the Other Side of the Global Fence Turned Out to Be Dead

analysis

JSE-listed companies are already facing tough times back home with a struggling economy and Covid-19 lockdown measures taking their toll. But corporate South Africa's global risk diversification strategies have also had poor and often disastrous outcomes. So the question now on every investor's lips is, 'where to from here?'

It is impossible to quantify the exact rand value, but Anchor Capital estimates that SA business has destroyed more than R300-billion of value over the past decade through their offshore forays, with the biggest culprits being Sasol, Woolworths and Brait - and that is without even taking into account the R250-billion lost to shareholders in the Steinhoff shenanigans.

To put those losses into context for individual investors, Hein Kruger, CEO and CIO at Kruger International Fund Managers, says if investors simply bought index funds with similar offshore exposure at those prices 10 years ago, the R300-billion would have been worth R1.2-trillion today. That's by including the 56% devaluation of the rand over the past decade, and the returns of markets abroad, in the calculation, he says.

On the other hand, it's hard to blame local companies for looking for growth opportunities elsewhere.

"SA has been stuck in a low-growth rut for...

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