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South Africa

South Africa’s Stagflationary Tilt
Our EM strategists warn that South African assets are vulnerable to a stagflationary squeeze. Although reform efforts are ambitious, they are slow to materialize as the country faces rising inflation and slowing growth. Higher energy and food prices as well…
Daily Insights by Gabriel Gosselin
South Africa’s Stagflationary Tilt

South Africa’s ambitious reform agenda will take time to bear fruit. Meanwhile, the country faces a stagflationary squeeze as inflation rises while growth slows. South African stocks, bonds, and currency are all vulnerable.

Emerging Markets Strategy by Rajeeb Pramanik
South Africa Under Pressure
The South African Reserve Bank held rates, with higher energy prices adding to inflation and BoP risks. The policy rate remained unchanged at 6.75%, with the central bank citing future inflationary pressures. This is in line with our Emerging Markets…
Daily Insights by Armen Hamazaspyan, Rajeeb Pramanik
Has South Africa Reached Escape Velocity?
Our EM strategists recommend staying underweight South Africa across EM equity, domestic bond, and sovereign credit portfolios, and continuing to short the rand versus an equal-weighted basket of the US dollar, euro, and yen. Despite strong gains in South…
Daily Insights by Felix Vezina-Poirier
Has South Africa Reached Escape Velocity?

The precious metal bonanza has not resolved the South African economy’s plight. Nor did it improve its public debt sustainability issues. Investors should brace for a reversal in South African stocks, bonds, and the currency.

Emerging Markets Strategy by Rajeeb Pramanik, Arthur Budaghyan
South Africa Eases As Growth Slows, Inflation Stays Contained
The South African Reserve Bank cut rates by 25 bps to 6.75%, with more easing expected as growth slows and inflation stays contained. The move aligns with our Emerging Markets strategists’ view that borrowing costs remain too restrictive amid global trade…
Daily Insights by Rajeeb Pramanik, Armen Hamazaspyan
South Africa: Lower Rates, Rising Public Debt
South African inflation will remain at the bottom of the SARB target range, allowing further easing. July CPI came in line with expectations at 3.5% y/y, with core at 3.0%. Our Emerging Markets strategists expect the central bank to keep cutting in…
Daily Insights by Arthur Budaghyan, Armen Hamazaspyan
South Africa Cuts Rates, More Easing Likely As Growth Slows
The SARB cut rates by 25 bps to 7.00%; our EM strategists expect further easing and recommends short ZAR exposure. Real interest rates remain elevated, and high borrowing costs are intensifying debt sustainability concerns, with 10-year yields far above…
Daily Insights by Rajeeb Pramanik
Why Balance Of Payments Matter: A Chartbook

In this chartbook, we look at the balance of payments across DM and EM countries. The US does not fare well, but neither do a few other countries.

Foreign Exchange Strategy by Chester Ntonifor
South Africa: The Coalition Government Honeymoon Is Over

The South African government seems to believe that some fiscal retrenchment can stabilize the public debt-to-GDP ratio. But that’s a misconception. The country will need draconian spending cuts to achieve this.

Emerging Markets Strategy by Rajeeb Pramanik

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