Dr Duarte F. da Silva, Managing Director, Northbound Processing & Chair, Element Investment Managers — in conversation with CNBC Africa, 25 May 2026
“The last kicks of a dying horse.” That’s the picture that has been painted, of South Africa’s capital markets.
Video courtesy of CNBC Africa. Watch on CNBC Africa →
Editorial Summary
South Africa’s capital markets are edging toward a dangerous tipping point unless policymakers, asset managers and market participants act to restore confidence in domestic equities. That was the central message from Dr Duarte F. da Silva, Managing Director at Northbound Processing and Chair of Element Investment Managers, in a televised interview with CNBC Africa following the publication of his open letter to the financial community.
Da Silva said his concern stems from the persistent wave of delistings combined with the growing preference among local asset managers for offshore exposure — a combination that, in his view, is hollowing out the country’s listed market. While delistings are a global phenomenon, he argued the trend is more pronounced in South Africa and carries heavier consequences for the local economy.
“The JSE is increasingly at risk of becoming little more than a post office for companies whose primary operations, revenue bases and strategic focus lie offshore.”
Dr Duarte F. da Silva
He acknowledged that subdued economic growth and weak policy outcomes have undermined South Africa’s appeal as an investment destination — but said the problem cannot be explained by macroeconomic conditions alone. A major part of the challenge, he argued, is that South African institutional capital has not adequately supported South African listed equities. The result: a self-reinforcing cycle in which fewer companies choose to list, more companies delist, and the market becomes progressively less attractive to both domestic and foreign investors.
A key flashpoint in da Silva’s critique is Regulation 28. The 2022 increase in the offshore allocation limit from 30% to 45% — combined with the prevalence of inward-listed global stocks in South Africa’s benchmark indices — has made it possible for asset managers to build portfolios with effectively full exposure to international markets. That, he argued, leaves local businesses seeking growth capital with fewer domestic funding options and pushes them either toward private capital or offshore listings.
Da Silva was careful not to argue against offshore diversification altogether. Instead, he said a balance must be struck between pursuing returns for pension savers and maintaining a commitment to the domestic economy from which those savings are sourced — framing it as part of a broader compact: retirement money benefits from tax incentives granted within South Africa, and that creates at least some obligation to support local capital formation.
He warned that foreign investors are unlikely to commit capital to South African equities if local investors themselves appear unwilling to do so. Using a simple analogy, he compared the market to a row of restaurants in which most are full and one stands empty. In that environment, why would a foreign investor choose the empty venue if domestic participants are signalling a lack of conviction?
The real-economy implications, he stressed, run deeper than portfolio construction. Delistings do not merely reduce the number of companies on the board; they weaken the market’s ability to fund future growth businesses. He pointed to AdvTech as an example of the kind of company that benefited from an active public market in earlier decades — starting from a modest market capitalisation, the education group was able to raise capital repeatedly and scale into a major business with local investor support. That model, he suggested, is becoming harder to replicate.
Da Silva also issued a pointed warning to South Africa’s asset management industry. If increasing amounts of capital are managed for offshore exposure, he said, clients may eventually ask why that capital needs to be managed from Johannesburg or Cape Town at all. A sustained shift away from domestic markets could ultimately undermine not just the exchange, but also the long-term relevance of local fund managers.
Key Takeaways
- Delistings on the JSE are more severe than in comparable markets — and carry heavier consequences for the local economy.
- The 2022 Regulation 28 amendment lifting the offshore allocation ceiling to 45% is a major contributor to the problem.
- Asset managers can now build portfolios with near-total international exposure, reducing capital available for South African growth companies.
- Local disengagement creates a self-reinforcing cycle of lower liquidity, weaker confidence and more delistings.
- Foreign investors are less likely to back South African markets if domestic institutions are not visibly doing so.
- Prescribed assets would be a poor policy response and carries serious risks in a corruption-prone environment.
- There is still time to act — but policymakers and the financial industry need to address the issue directly rather than defer it.
Despite the severity of his diagnosis, da Silva said his intervention was not intended as fearmongering. Rather, he framed it as an appeal to confront a difficult problem before harsher policy responses emerge. South Africa, he concluded, is not yet beyond rescue — but time is running short. The country still has institutional depth, a sophisticated savings industry and a historic exchange with strong foundations. The question is whether those strengths can be mobilised before the erosion becomes irreversible.
Dr Duarte F. da Silva is the Managing Director of Northbound Processing, headquartered in Germiston, Gauteng, and Chair of Element Investment Managers. He has spent more than thirty years in capital markets at Merrill Lynch, Credit Suisse and Macquarie. This interview was conducted by CNBC Africa on 25 May 2026, following the publication of his open letter to the financial community.