Rand reacts badly to ANC manifesto
The statement on ‘prescribed assets’ in the governing party’s election manifesto spooked foreign investors
The rand suffered on Monday morning as Asian markets digested Saturday’s ANC rally in Durban. Areas of concern for foreign investors from the policies announced by the ruling party ahead of this year’s general election included ordering pension funds to invest in state-owned enterprises (SOEs) and maintaining Eskom’s monopoly.
As international banks analysed the ANC’s manifesto, the rand slid 1% from Friday’s R13.77/$ to R13.91/$ on Monday at about 5.20am South African time. The rand was trading at R13.90/$, R15.95/€ and R17.86/£ at 6.45am. The most alarming statement in the ANC’s manifesto was probably the following: “Investigate the introduction of prescribed assets on financial institutions’ funds to mobilise funds within a regulatory framework for socially productive investments (including housing, infrastructure for social and economic development and township and village economy) and job creation while considering the risk profiles of the affected entities.” Intellidex a...
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