Market commentators are concerned about the mixed result of the African National Congress’ (ANC) leadership election on Monday.
Three of the Top Six leaders elected, are from Deputy President Cyril Ramaphosa’s camp, including the new ANC president himself, while the other three are seen as backers of his rival Nkosazana Dlamini-Zuma.
BNP Paribas SA’s senior economist Jeff Schultz says it may be difficult for the party to self-correct, given the number of, what he calls, pro-Zuma members in the Top Six.
“We are pretty disappointed, it’s clear that the makeup of the Top Six is split between Cyril Ramaphosa camp and Dlamini- Zuma camp, you have two premier league-rs. We don’t view that as positive market outcome. It’s probably one of the poor outcomes we could have hoped for in terms of the ANC self-correcting between now and 2019. I think some negativity will start creeping back into the currency.
The rand firmed to R12.68 on the news of Ramaphosa’s election. It’s trading at around R12.74 on Tuesday morning.
