Zuma departure boosts South Africa
By Vincent-Frédéric Mivelaz
Investors are getting re-interested in South Africa, as the early removal of President Jacob Zuma looks ever more likely. The leader of Zuma’s African National Party, Cyril Ramaphosa, has repeated his intent to wipe out corruption and to replace Zuma before his term of office ends officially in 2019. Rumors abound that Zuma’s resignation could happen as early as 2-4 weeks from now.
The South African Rand (ZAR) and equity markets are moving. Since the beginning of 2018: USD/ZAR -2.95%; EUR/ZAR: -0.25%; FTSE/JSE 40: +3.11%, and MSCI South Africa: +1.98%. On the fundamentals: December 2017 Business Confidence surged, November Retail Sales were up 8.20% (consensus was 3.10%) and inflation is contained at 4.6% (way below the 13.6% rate in 2008). Later this week we’ll see the December 2017 Consumer Price Index and the December 2017 trade balance.