Investors are faced with a dilemma here. Do they invest in South African equities which appear to be attractively priced for a re-rating on the back of an economic turnaround? If real economic growth were to suddenly accelerate, could this serve as a catalyst for a firmer Rand and the moderation of monetary policy? Or do they continue to commit money offshore and take advantage of both a currency hedge and the diversification benefits of more liquid growth markets? If investors – retail or professional – get this call wrong, their realised investment returns can be materially impacted. How do we try and work out the real state of the South African economy? Among the millions of data points that we as Prescient Investment Management (PIM) analyse is the corporate liquidations data which reflects compulsory and voluntary liquidations for businesses and Close Corporations. Statistics SA has released this on a quarterly basis since 2000.

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