Who will run South Africa?

As South Africa gets ready for another democratic election 30 years into democracy, I can’t help but to wonder if this time will be different. We have seen the reign of the ANC reach it’s peak and now there seems to be a downward trend in support. This does bring uncertainty, especially in financial markets. And of course, timing is everything. At the moment there is also uncertainty in global markets due to global conflict, interest rates and supply issues.

What will we see in the coming weeks leading up to the elections? There will be volatility, but it will be a lot of the same as what we have been experiencing the past 2 years. Currency volatility may also increase leading up to the elections. The Rand is a liquid currency that’s traded very actively, evident in normal fluctuations in a non-election year.

I am of the opinion that nothing will change post elections, and that we will see the ANC run South Africa for another 4 years in the same way as they have been. There will certainly be a few surprise coalitions partners as parties fight for every last percentage. Financial Markets will also return to “normal” and hopefully we will see interest rate cuts later in 2024 which will promote capital inflows to growth assets like equities.

Many institutional and retail investors are simply holding onto their cash now, this means that the banks have billions in fixed deposits and money markets products that will eventually start to move around. This will of course provide a bit of breathing room to South Africans under pressure but will also bring a bit of hope to a dampened South African mood.

There might still be a few smaller bumps in the road caused but political campaigning but don’t believe all the sensationalist news leading up to the elections and don’t deviate from your financial plan. And please vote.

Here are the latest poll findings from Ipsos:

Ruvan J Grobler RFP™ (PGDip Financial Planning)

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