GIULIETTA TALEVI: SA stocks rocket — despite the ominous threat of EFF violence

It’s been a while, but SA Inc shares finally copped a break from their general market malaise on Wednesday.

Banking and retail stocks flew — barely 24 hours after the devastation of the government’s response to Covid-19 was laid bare in truly horrendous GDP numbers, as the economy contracted 16.4% in the second quarter compared with the first.

Shoprite, for example, rallied another 10%, taking its gains over two days to 21% since Tuesday’s results; Standard Bank gained 9% and Nedbank 8.9%.

As Piet Viljoen, one of SA’s stalwart value investors, put it: “Some days — and on not very many days over the last three years — it is really, really good to be a value investor. Today is one of them.”

He added that he wasn’t gloating; it was “just a sigh of momentary happiness — actual satisfaction is still a long way away from here”.

It may be that people think it can’t get much worse. Or it may be that a big international buyer is sweeping up SA stocks, which would explain the rand strengthening back to around R16.65 yesterday.

Or maybe it’s just the jubilation of an imminent move to level 1 of the lockdown. Or, as FNB’s Wayne McCurrie said on Wednesday, maybe it’s just that local stocks are cheap.

Speaking of level 1, President Cyril Ramaphosa, in his first real engagement with the press in months on Wednesday night, has committed to answering more questions from the press — something we haven’t seen very much during his presidency.

Apparently Ramaphosa will be addressing the nation next week, and the expectation is that level 1 is around the corner — basically, a resumption of normal life.

For more detail on what Ramaphosa said, read the take of FM deputy editor Natasha Marrian here, and that of News24 here.

Maybe it’s the prospect of a return to normal life which has led SA’s most spectacle-fixated political party, Julius Malema’s EFF, seeking to reassert the relevance it seemed to have lost during the Covid lockdown.

The EFF’s grotesque form of politicking — a vicious social media blizzard followed by violent protest — has made all the news this week. If you haven’t yet, read Adam Habib’s searing article in the Daily Maverick on “our new generation of activists”.

Habib writes: “President Cyril Ramaphosa has as his strategic goal the attraction of foreign investment to reinvigorate the economy. Yet he needs to ask himself which investor in their right mind would be willing to invest in a country where a minority party in parliament can muscle a company and close its operations through violence and/or the threat of it without a single murmur from government?”

That, in one sentence, is why the state and business community need to care about what happened at pharmacy group Clicks this week.

On a much lighter note, and as glorious spring weather in Joburg has unshackled our pandemic-panicked selves, The Atlantic published a delightful article this week about the return of the gym-goer.

“In a quest for normalcy over the past few months of closures, the desire among gym-goers to get back at it has seemed subordinate only to people’s urge to return to bars and restaurants,” it writes.

Read it here, and understand why South Africans are flooding into the streets, pandemic or not.

*Talevi is the FM's Money & Investing editor.

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