Just as things were starting to look up for SA’s economy — Zuma struck
Just as things were starting to look up for South African banks with economic growth and lending poised to rebound, President Jacob Zuma struck. The fallout from a midnight Cabinet purge by Zuma on March 31 threatens to stall debt sales by financial-services companies, which had risen to a record on a quarterly basis in the first three months of the year, according to data compiled by Bloomberg. "In this time of uncertainty, growth is going to be constrained and bank issuance will probably be lower than in previous years," said Rashaad Tayob, who oversees about R13.5bn as a portfolio manager at Abax Investments in Cape Town. "If they don’t see credit growth then they won’t need to raise funding." Zuma shocked investors by firing former finance minister Pravin Gordhan, as well as effecting 19 other changes to his administration. The rand plummeted and bond yields soared after the move, while bank stocks were hit particularly hard. Other companies are also feeling the pinch, with at l...
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