by Abram Molelemane

According to the South African  Reserve Bank’s quarterly bulletin, South Africa managed to attract foreign portfolio capital inflows at a faster pace in the first quarter of 2012.

The bulletin, which was released on Thursday, showed that the net inflow capital on the financial account accumulated to R50, 5 billion, compared with last’s year inflow of R19, 9 billion in the fourth quarter.

In addition, the bulletin showed an increase in foreign investment inflows regardless of the current global economic situation, where international investors selectively substituted their holdings of emerging markets equity securities in support of those in developed economies. This response  followed a slightly positive sentiment in the global financial markets in the first quarter of 2012.

Foreign direct investment (FDI) into South Africa registered an inflow of R7, 7 billion, which was a smaller amount in the first quarter compared to an inflow of R18, 7 billion in the previous the quarter.

The continuous strengthening of economic ties between China and SA also contributed to the  increase in long-term inward investment, reported the local press.

South Africa’s foreign portfolio investment went up by R28, 9 billion in the first quarter following an increase of R12, 5 billion.

According to the Reserve Bank,  the attractive domestic incomes on South African government bonds may have encouraged foreign investors to remain buyers of domestically issued debt securities over the period.

The surge in portfolio investment liabilities was further increased by the proceeds from a $1, 5 billion international bond issued by the South African government during the first quarter.