Stocks rally after Zuma steps down, led by Naspers
Media giant Naspers led big gains on the Johannesburg Stock Exchange on Thursday, after South Africans woke up to the news that Jacob Zuma had stepped down as president of the country.
Bloomberg reported that local stocks gained the most since June 2016 after Zuma resigned in a late-night address to the nation on Wednesday. “Banks rallied to a record amid optimism his likely successor, Cyril Ramaphosa, will improve management of the economy,” it said.
By 12h45, the benchmark JSE Top-40 index rose 4.0% to 52,581 points while the broader All-share index gained 3.74%,to 59,543 points.
Naspers, which has struggled in recent weeks, following a damaging analyst report from Investec, added nearly R212, or 6,68% to R3,381 by lunchtime.
Standard Bank Group added 5.08%, FirstRand was up 7.33%, and Nedbank Group gained 6.70% as the sector index gained soared. Capitec added 1.37%, while Absa however, declined 2.09%.
“This is just a euphoric bounce on the back of the news and that could pull back just a bit, but unquestionably, the outlook is positive for South Africa for at least the shorter-term,” Wayne McCurrie, a money manager at Ashburton Investments Management Co told Bloomberg. “This is the Cyril bonus.”
Growth has averaged just 1.6% a year since Zuma took office in 2009, undermined partly by a series of policy missteps and inappropriate appointments that rocked investor and business confidence. Ramaphosa is widely expected to adopt more business-friendly policies, prompting the rand to rise more than any other currency against the dollar since his election as ANC leader in December.
“It’s all positive – the South African shares are positive, mining shares are positive because we’ll probably get a statement on the re-look at the new mining charter, so they’re all flying,” McCurrie said. “Happy days are here again. So it’s just off to the races.”
Read: Ramaphosa’s ‘fantastic plan’ to deliver 3% GDP growth in 2018
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