Enter your keyword

South Africa Update: Goldman Sachs and the Big Emerging Market Story

Welcome to the newly launched Barak Fund Management Blog.

South Africa Update: Goldman Sachs and the Big Emerging Market Story

South Africa Update: Goldman Sachs and the Big Emerging Market Story

February 2018 – The new year for South Africa promises to be an interesting one, in many different areas of focus. The underlying factor influencing all of these areas is undoubtedly the political situation within the country, and how the current movements are being perceived from a global perspective.

National Congress (ANC). Jacob Zuma, for the time being, is hanging on to his position as the South African president, but is not the president of the ANC. This position is held by Cyril Ramaphosa as at December 2017, and is widely viewed to steer the country to a strong 2018 and beyond. General presidential elections will take place in 2019, but recent movements indicate that Jacob Zuma may not last long enough to see the remainder of his term out.

Mr. Ramaphosa has a particularly strong business background, primarily within the mining industry in South Africa, and is keenly aware of the influence of attracting regular inflow of FDI into the country if GDP growth, and ultimately jobs, is to have a chance. He championed for South Africa particularly aggressively at the World Economic Forum in Switzerland at the end of January, and brings with him an air of supreme confidence at being at the helm of a political party that holds so much influence over the well-being of the country’s prospects.

Goldman Sachs, the world’s third largest investment bank, have been recently compiling a list of emerging market countries with massive potential, and South Africa is looking increasingly like it could emerge at the top of the pile for 2018. When Goldman Sachs run some numbers, views and reports, the investment world generally sits up and listens. Their research says there will likely be some serious improvements in rates and FX, and less in credit and equity. As they put it, there is large “catch up” potential.

Barak’s exposure to South Africa remains its largest across its portfolio at c.25%, and will likely to continue running strongly amidst the outlook. Opportunities are rife, and with the conclusion of the Mining Indaba in Cape Town this week, deals across the sector (and others) are prolific.