ASSET MANAGEMENT: It’s about being calm
It could be that investors regard Pravingate and the downgrades as a path to ‘good’ change
Investors would have been perfectly justified in throwing up their hands in despair at the beginning of the month. Pravin Gordhan had just been fired, and ratings agencies had downgraded the country’s debt to junk. Not even 18 months prior, the firing of Nhlanhla Nene had sent markets into a tailspin, the rand had tanked and investors had panicked. What fate awaited SA investors this time? Another rand plummet? How badly would the markets react? If all the predictions were to be believed, a bloodbath was due. Except that it wasn’t. There was pain, but less blood than expected as the rand shed about 10% by the end of the first week in April. The JSE Alsi was actually up more than 1% in that same week. The muted response to this latest crisis was surprising. But based on recent global events and outcomes, who can say what "normal" is any more? "We shouldn’t have expected a bloodbath," says Peter Brooke, fund manager of the Old Mutual Flexible Fund. "The reason for that is there is the...
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