While some stock investors may choose to flee SA as political turmoil engulfs President Jacob Zuma, HSBC analysts argue the noise around the embattled leader and his ruling party makes it a good time to buy. That’s because a pick-up in the South African economy and a favourable commodity price cycle as China, the biggest consumer of metals, avoids a hard landing are positive for the local market. In addition, elections due in 2019 should deter the ANC from policies that harm the economy for fear of defeat at the polls, the analysts, led by John Lomax, head of global emerging-market equity strategy at HSBC, wrote in a report. "We are overweight the South African equity market and think that any rise in the political risk creates a buying opportunity in the context of a positive commodity cycle and domestic economic upturn," they wrote. Financials, consumer staples and technology shares are preferred by the HSBC analysts and their highest conviction buy-rated stocks have the potential...
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