Locked Stocks

Faced with a steady decline in its foreign-exchange reserves as nervous investors pulled their money out of South Africa, Prime Minister Verwoerd's government last week took drastic measures.

It forbade foreign shareholders to sell out to South Africans, prohibited South Africans from buying stock abroad. Since no sane foreign investor is likely to risk his money in the future on such a oneway street, South African industry will now have to rely solely on the nation's already pinched capital market for new funds. The announcement came only two weeks after South Africa had inserted a lavish, 24-page booklet into the Sunday New York Times, advertising its "favorable investment climate" and pointing out the bargains available, since "stocks have reached new highs on every exchange in the free world with one exception, the Johannesburg Stock Exchange."

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