THUR, FEBRUARY 15 2018-theG&BJournal-Barely 24 hours later, South Africa has a new president in Cyril Ramaphosa, already sworn in and the markets are happy just as the parliament which celebrated the occasion with songs and dances in the chamber. Bond yields have since fallen to a low last seen since late 2015. Stocks have surged and equities are breathing fresh for the first time since December 2014. The Rand rallied quickly after Jacob Zuma announced he quits late last night. It is still rallying, now at a three year high.
The rand, already the best-performing major currency over the past three months, extended its run, gaining 0.8% to R11.62 per dollar, its strongest level since February 2015. Yields on benchmark government rand notes due 2026 fell nine basis points to 8.3%, while those on 10-year dollar bonds shaved off five basis points to 5.13%.
Cheering and dancing erupted at a special session of parliament in Cape Town on Thursday as it was announced that the speaker had received a copy of Zuma’s resignation letter, following a nationally televised resignation address on Wednesday night.
Ramaphosa, a multi-millionaire businessman and apartheid warrior, led rebels who forced Zuma from power amid a corruption investigation into his links with the powerful Gupta family. Police announced they arrested nine people and are seeking a further five suspects after raids at the Guptas’ home on Wednesday.
Zuma years in office saw the SA economy average 1.6% growth a year undermined mostly by corruption and policy missteps that baffled and scared investors.