Rand Sours As President Zuma Quits
The Rand soured as the announcement was made that President Zuma was stepping down and ANC President Cyril Ramaphosa was sworn in as the new National President.
In the wake of the announcement, the Rand went up to R11.66/$. This means that the Rand basically returned to what some have described as it’s ‘Pre Zuma’ value. The last time the currency was this strong was around Feb and May 2015. The value then fluctuated over the next day or so.
Though the announcement was not a surprise and has been factored into the currency by most traders, stocks definitely also went up as the announcement was finally made. There was around a 5% uptick in value on the JSE making Thursday 15th of February the biggest trading day for over 3 years.
The banking index (which often sets the tone) surged by 5.8% with FirstRand up by 6.4% and Nedbank up by 5.8%.
This trading was largely seen as based on optimism rather than definitive value increase and is typical of such political activity. It is said that many who had held off South African investment and trading will now venture back into exposure based on what they see as a highly positive development.
Ratings Agencies Now Wait and Watch
Rating agency Moody’s have said they will now watch the new leadership and wait for the upcoming budget and SONA before they reevaluate the countries ratings. S&P have also indicated that time will be needed before they revisit the current “Junk” status ratings.