South Africa: Too Soon to Jump for Joy (BNP Paribas)

Last month’s election of Cyril Ramaphosa to lead the ruling ANC party in South Africa – an event which investors had partially, but not fully, anticipated – has led to an explosive rally in South African asset prices. The rand enjoyed its strongest six-week gains in recent history. Against this heady backdrop, Marina Chernyak assesses the sustainability of current market levels and identifies the factors needed to maintain or extend the recent strength.
By contrast, there is little market euphoria built into the current pricing of energy shares, at least in general. In the second of our Intelligence Report articles, Daniel Morris reviews the performance of the sector over the past year, particularly the experience of lacklustre returns despite broadly rallying crude oil prices. A closer examination of
the supply and demand dynamics and the associated changes in the shape of the futures curve yields tentative explanations of this conundrum and hints of what to expect in 2018.


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