With local election and global uncertainties, 2019 will be a difficult year, but banking stocks expected to firm up financials

The general financials index, which was one of the hardest hit in 2018, is showing slight recovery, but it remains to be seen if it will keep the momentum for the rest of 2019, especially with the looming general election. The index lost 12.96% in 2018, slightly higher than the JSE which closed 11.37% lower than in 2017. Both recorded the biggest declines in a decade. The general financials index is up 1.67% so far this year while the JSE has firmed up 3%. Jean Pierre Vester, portfolio manager at Fairtree Capital, said he expected some movement on the index although he was not certain at this stage about the level of expected returns. “The election could lead to more movement than usual, since movement is associated with a change in expectations, and there is a chance that the outcome of the election is quite different to what is expected,” said Verster. Financial stocks are among the most sensitive at election time. When Cyril Ramaphosa was elected president of the ANC in 2017, ban...

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