Research firm warns of rising equities risk premiums ahead of 2024 elections

London-based economic research firm Capital Economics says investors are underestimating the possibility of SA’s public finances deteriorating further after next year’s elections, causing increased risk premiums of the country’s equity market, with weakness in the Chinese economy another headwind.

Thomas Mathews, senior markets economist at Capital Economics, said growing concerns about the direction of SA’s public finances have caused the bond yield curve to steepen as risk premiums have risen, a trend that may continue as the elections approach…