Grey list reality check for South Africa
South Africa will hear its fate over its greylisting tomorrow, 24 October, with markets already pricing in the nation getting off the list.
Because of this certainty, South Africans shouldn’t expect any big waves or market impacts if the country is delisted.
South Africa was placed on the grey list in February 2023 by the Financial Action Task Force (FATF) due to limitations on its ability to stop money laundering and terrorist financing.
The grey list places countries under increased monitoring and scrutiny, with global investors concerned about possible financial risks.
Several institutions, including National Treasury, the South African Reserve Bank and the Financial Intelligence Centre, looked at 22 action items to address these deficiencies.
In June 2025, the FATF said South Africa had addressed the 22 action items, warranting an on-site assessment.
The FATF’s decision on whether South Africa remains on the grey list comes out tomorrow.
Speaking with BusinessTech, Prescient Investment Management Chief Investment Officer Bastian Teichgreeber said that South Africa getting off the list is incredibly likely.
He said that markets have already priced South Africa getting off the grey list, meaning that the announcement is unlikely to result in notable swings in the financial market.
Teichgreeber added that South Africa felt minimal impact from the greylisting, with many investors believing that the nation would jump off relatively quickly, like Mauritius had already done.
However, a significant market reaction would occur if South Africa did not get off the grey list tomorrow, as it would undermine confidence in the nation and hurt domestic asset classes.
Despite this risk, Teichgreeber emphasised that he was over 90% sure South Africa would get off the grey list.
He said that the fact that the FATF have physically come to South Africa means that the decision will likely go in South Africa’s favour.
Small piece of the puzzle
Although getting off the grey list is good news for South Africa, Teichgreeber said it is just one piece of the puzzle.
For instance, regarding the rand, the greylisting will only have a small impact on the currency’s value.
The rand takes cues from several other indicators, as South Africa is an open economy, including movements of the dollar and interest rate decisions.
Teichgreeber noted that coming off the grey list will positively impact the nation, boosting international confidence in South Africa.
This comes as South Africa falls short of the foreign direct investment (FDI) needed to boost the economy.
While South Africa has seen inflows into the nation’s equity and bond markets since the 2024 national election, much of this has been from local investors, with FDI not flowing into these asset classes.
He added that the recent returns on the JSE are multifaceted, such as a weaker dollar and a recent commodity boom. These returns also occurred with South Africa on the grey list.
On top of this, many of the major JSE-listed companies are internationally based and are seeing growth due to global factors, not local developments.
He said there will be further international investor confidence in the JSE should South Africa get taken off the grey list.
However, he noted that substantial equity and bond returns in the short term are unlikely, given the recent rises.
He said that South African asset valuations at the start of the year were cheap, but they are likely closer to fair value following this year’s rallies.
For Prescient itself, Teichgreeber said the company is now taking a conservative approach.
From an investment perspective, the group has pulled back its equity exposure and is focusing on short-term bonds over longer-term ones.
The investment firm, which manages over R160 billion in assets, is looking at safe-haven assets.
This includes dollar-denominated assets and Treasury Inflation Protected Securities (TIPS), which are virtually risk-free.
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