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<\/a><\/p>\nAs Goldman embarks on a hiring spree in major emerging economies like China, it\u2019s also expanding its footprint in South Africa, adding fixed-income and foreign-exchange products aimed at corporate and institutional investors to its existing investment-banking services.<\/p>\n
The lender recently won approval from Johannesburg\u2019s stock exchange for a license to trade futures. In 2019, it partnered with Investec on equity trading.<\/p>\n
\u201cWe came in at a time when other banks were pulling out and our balance sheet and willingness to commit capital to corporates has been appreciated,\u201d Penkin said. \u201cThe advisory business has been much busier than it was last year, mainly with M&A.\u201d<\/p>\n
Foreign Outlier<\/strong><\/p>\n The US bank, which has had a presence in South Africa for more than 20 years, is making further inroads after committing to an expansion drive about two years ago.<\/p>\n At a time when several other foreign firms, including Deutsche Bank AG and Credit Suisse Group AG, scaled back operations, Goldman boosted its markets offering and added licenses to build out its business.<\/p>\n Penkin took over Goldman\u2019s Johannesburg office at the end of 2019 after working on Saudi Aramco\u2019s share sale, the world\u2019s biggest initial public offering. A graduate of the University of Cape Town, he was previously chairman of Goldman\u2019s equity capital markets unit for Asia ex-Japan.<\/p>\n Goldman\u2019s top ranks include other bankers with South African roots, including Richard Gnodde, its international head who helped oversee the firm\u2019s expansion in the country starting in 2019.<\/p>\n \u201cFinance and risk management — combining our new brokerage in South Africa together with the advisory side and providing financing and risk-management solutions to corporates — is where we see very significant growth,\u201d Penkin said. \u201cThat\u2019s already happening.\u201d<\/p>\n Goldman is growing its South African business as President Cyril Ramaphosa makes headway on the reforms investors have sought for many years.<\/p>\n The government has started taking action against alleged perpetrators of corruption and raised the limit on private-power generation as the nation\u2019s main electricity supplier Eskom Holdings Soc Ltd. faces ongoing maintenance issues. This month, the country sold off a majority holding in its national airline after its emergence from bankruptcy proceedings.<\/p>\n Path Ahead<\/strong><\/p>\n South Africa\u2019s ability to work out challenges with other embattled state-owned companies and provide financing will be important factors for its growth outlook, Penkin said.<\/p>\n \u201cWe still have an out-of-consensus positive view on growth in South Africa and we think the prospects for inflation may be temporary,\u201d he said. \u201cThat will obviously be positive for the economy as are the reforms announced last week around electricity self-use generation. These will take time to have an effect but it\u2019s a very welcome move.\u201d<\/p>\n Goldman isn\u2019t alone in being upbeat. Standard Bank and FirstRand are among the South African lenders that have also signaled a change in sentiment around the country\u2019s growth prospects as signs of economic recovery begin to emerge.<\/p>\n The nation is expected to bounce back from the Covid-19 outbreak with 4.2% growth this year, according to its central bank, and lenders anticipate better profits.<\/p>\n As businesses race to build scale by taking advantage of consolidation across various industries, South African firms have options. They can \u201ceither double down domestically or look overseas for acquisitions,\u201d Penkin said.<\/p>\n
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