London — The transfer of power in SA has pulled the rug from under the feet of some short traders. At stake: more than $5bn. Three out of four stocks in Johannesburg rallied on Thursday, sending the benchmark FTSE/JSE Africa all share index to the biggest increase since 2014, as Cyril Ramaphosa replaced Jacob Zuma as president. The end of a political wrangle that made South African assets among the world’s most volatile left bears staring at potential losses in some of the country’s best-performing equities. SA has underperformed emerging-market peers this year as efforts to oust Zuma turned into a see-saw game, with the defiant leader refusing to resign as late as Wednesday. That, and the blow to exporters from a stronger rand, had made bearish bets against the country’s equity market attractive. But once Zuma stepped down, the outlook seemed to have reversed. For the first time since September 2016, investors are paying a premium to own South African shares rather than global stoc...

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