However, the situation changed dramatically in May 1998 when non-residents reviewed their investment strategy and started to withdraw some of the funds they had previously invested in South African bonds. During the four months January to April 1998, non-resident investors increased their holdings of South African bonds by approximately R16 billion.
Over the next four months, that is from May to August 1998, they reduced their holdings of South African bonds by about R19 billion. This dramatic change of strategy had an almost immediate negative effect on the overall demand and supply conditions in the South African financial markets.