Bullish on South Africa: The next weeks will herald a new dawn
The performance of South African financial markets since Ramaphosa became president of the country in 2018 has been atrocious to say the least. Yes, emerging markets came under pressure, global economic activity slowed down as the Sino/US trade war intensified and Brexit worries rattled markets. But the real reasons go deeper than that.
Since the end of the first quarter last year, when President Ramaphosa took the reins, the rand slumped by nearly 30percent against the US dollar and fell by nearly 15percent against an equity market-weighted basket of emerging market currencies.
The losses on the JSE were nearly double that of emerging market equities, while South African bonds as measured by the All Bond Index lost 15percent in terms of dollars, in stark contrast to global bonds as measured by the JPMorgan Global Government Bond Index’s positive return in excess of 11percent in terms of dollars.
One does not have to search far to ascertain the causes behind the very disappointing returns of the South African financial markets.
Source: iol.co.za
