Optimism over President Cyril Ramaphosa’s ascendance in 2018 ‘has been partly replaced by impatience over slow progress’, according to a report by Bloomberg.
The report notes that Johannesburg’s benchmark index ‘was held back in 2019 by the dismal performance of the local economy, which is at risk of slipping into recession. The FTSE/JSE Africa All Share Index climbed 8.2%, well short of the 15% gain in the MSCI Emerging Markets Index.’
Against this background, Finance Minister Tito Mboweni’s February budget speech ‘will be scrutinized for evidence that South Africa is doing enough to preserve its last remaining investment grade rating from Moody’s Investors Service’, writes Bloomberg’s Adelaide Changole.
‘South Africa’s budget, due to be presented next month, is looming as a key first-quarter event for investors seeking insights on the outlook for a stock market that failed to keep pace with emerging-market peers last year.
The report points out that South Africa’s economy ‘has contracted in two of the last three quarters, and the International Monetary Fund forecasts sluggish growth in 2020, trailing population growth for the sixth year in a row’.