Swissquote Bank Research Team
Swissquote Bank Ltd
Following President Zumas’ reelection in 2014, his recent rejection by the ruling party African National Congress (ANC) and his 783 related charges upheld by the South African Supreme Court of Appeal, investors have become optimistic, thus reinforcing the South African Rand (ZAR) and equity market since the beginning of 2018 (USD/ZAR: -2.95%; EUR/ZAR: -0.25%; FTSE/JSE 40: +3.11%, MSCI South Africa: +1.98%). Initiated by its new party leader Cyril Ramaphosa who’s confirming his willingness to wipe out corruption matter within the country, the ANC has initiated talks to replace Zuma before the end of his mandate, formally ending in 2019. Rumors even arising mention that the resignation could occur as early as within two to four weeks according to local analysts.
The World Economic Forum (WEF) is therefore a great opportunity to show investors how attractive South Africa remains and to regain investor confidence. South Africa has proven strong economic achievements since the beginning of the year: December 2017 Business Confidence surged by 96.4, November Retail Sales of 8.20% (consensus at 3.10%) and inflation is contained at 4.6% (way below the 13.6% hike in 2008). For these reasons we maintain our stance that South Africa is on its way to further economic growth for the 2018 outlook. This week we will be looking at December 2018 Consumer Price Index (January 24th 2018) and December 2018 Trade Balance (January 31st 2018).
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This report has been prepared by Swissquote Bank Ltd and is solely been published for informational purposes and is not to be construed as a solicitation or an offer to buy or sell any currency or any other financial instrument. Views expressed in this report may be subject to change without prior notice and may differ or be contrary to opinions expressed by Swissquote Bank Ltd personnel at any given time. Swissquote Bank Ltd is under no obligation to update or keep current the information herein, the report should not be regarded by recipients as a substitute for the exercise of their own judgment.
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