South African Stocks Are Hot Property as Coalition Era Starts

(Bloomberg) -- The prospect of a business-friendly South African government has drawn foreign investors back to the country’s stock market, with inflows reaching levels last seen more than two years ago.

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Non-residents have been net buyers of 7.5 billion rand ($417 million) of South African equities in the 10 trading sessions through Friday, according to JSE Ltd. data compiled by Bloomberg. That’s a 10-day daily average of 936 million rand, the highest since March 2022.

President Cyril Ramaphosa unveiled a new cabinet on Sunday that he said would prioritize rapid and sustainable economic growth. The announcement followed weeks of negotiations after an election on May 29 in which his African National Congress party lost its outright majority for the first time in three decades.

Before the turnaround of the past two weeks, foreign investors had been net sellers of South African stocks to the tune of $4.7 billion, amid concerns about a stagnating economy, fiscal challenges and transport logjams. Investors also feared a coalition between the ANC and one or more of its leftist rivals.

Johannesburg’s benchmark stock index jumped more than 1% on Monday, closing in on a year-to-date high.

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