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<\/a><\/figure><\/div>\n\n\nAlmost two-thirds of respondents said they\u2019d be most likely to increase exposure to South Africa if the election results in a coalition between the ANC and the official opposition Democratic Alliance, while 19% said they would do so if the ANC won outright, but with a reduced majority. <\/p>\n\n\n\n
More than 90% of respondents said they expect assets to rally in the event of an election outcome that ensures policy continuity.<\/p>\n\n\n\n
\u201cIf the election turns out reasonably you could see quite a bit of foreign buying coming into our markets,\u201d said Peter Armitage, chief executive of Anchor Capital. <\/p>\n\n\n\n
The Johannesburg-based money manager said he became more bullish on South African stocks about two months ago, and has bought \u201cquite heavily\u201d into banks, as well as retailers including Shoprite Holdings Ltd. and some real estate firms.<\/p>\n\n\n
<\/a><\/figure><\/div>\n\n\nTo be sure, investors were quick to point out that any rally will be short-lived unless the new government makes some dramatic reforms. In the survey, which took place between May 6 and 17, the majority of investors said curbing crime and corruption and easing the nation\u2019s debt burden are the most pressing challenges.<\/p>\n\n\n\n
\u201cThe durability and extent of that rally will be determined by the ANC addressing long-standing challenges such as security, growth and fiscal issues,\u201d said Thys Louw, a portfolio manager at Ninety One UK Ltd. <\/p>\n\n\n\n
\u201cThe challenges are immense, but going into the election, we\u2019ve actually seen improvement in areas such as fiscal, which is encouraging.\u201d<\/p>\n\n\n
<\/a><\/figure><\/div>\n\n\nMarkets in Africa\u2019s most industrialized economy have been on a tear in recent weeks. The rand has touched a 15-month high against the dollar, yields on 10-year government bonds have dropped 60 basis points from their 2024 highs, and the benchmark stock index is near a record high.<\/p>\n\n\n\n
There is room for further gains, according to Kamakshya Trivedi, head of global FX, rates and emerging-market strategy at Goldman Sachs Group Inc. <\/p>\n\n\n\n
Goldman sees South African stocks outperforming emerging-market peers ex-China, and prefers domestic cyclicals and banks over export-oriented sectors.<\/p>\n\n\n\n
\u201cSouth African local assets \u2013 especially local bonds but also the rand and equities \u2013 are not expensive,\u201d Trivedi said. \u201cIf the election results allow more decisive action to address these fiscal or growth challenges, then there is room for the current rally to extend.\u201d<\/p>\n\n\n