Coronation carefully buying abroad
The odd lack of panic among investors in SA could be because of complacency regarding emerging markets
Far from beating a panicked retreat out of SA assets, local and foreign investors have been remarkably sanguine about President Jacob Zuma’s cabinet hatchet job, and the downgrade of SA’s sovereign credit status to junk by ratings agencies Standard and Poor’s and Fitch. The all share index is about 5% up year-to-date, while the rand is still stronger than where it began 2017, though almost 9% off its best levels for the year of R12.43, before Zuma struck. Asset manager Coronation, whose assets under management stood at R576bn as of end-March, reckons the real tipping point may come in December, when the ANC holds its elective conference to anoint Zuma’s successor. Says chief investment officer Karl Leinberger: "SA always had this strong commitment to fiscal discipline and we are at great risk of that discipline being lost or loosened. "We think the market reaction (so far) is interesting ... it’s very benign. The key point that we want to make is: it’s not that the reshuffle is the ...
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