Citigroup expects South African equities to overcome recent weakness and outperform emerging market peers, as the new governments pro-reform agenda tempers headwinds linked to the US election outcome.
Citis head of African markets George Asante noted that South Africas coalition government, which took office following elections in May, was prioritising economic growth, which alongside lower interest rates should play in markets favour. While the Johannesburg bourse and the rand have endured steep losses since Donald Trumps US election win on Nov. 5, Asante said a stable political environment and the relative ease of doing business are positives for South Africa.
'Market sentiment is that there is a clear plan to return to sustainable growth,' Asante told Bloomberg in an interview. Thats 'boosting confidence in South Africa Inc., and its going continue for a while.'
As interest rates fall in South Africa and most other countries, there would be more 'clarity in pricing new investments,' Asante added.
