12 February 2018
The economic implications of the South African political landscape
In this video, Justice Malala, John Haynes and Paul McKeaveney assess the economic impact of the ANC Elective Conference against the backdrop of an ever-changing world.
The world and South Africa are both going through turbulent times – and it’s not just the politics we have to keep an eye on, but trends in technology, demographics and economics too. Ronelle Hutchinson talks to John Haynes and Paul McKeaveney of Investec Wealth & Investment, as well as political commentator and journalist Justice Malala to discuss some of these trends.
Watch video: the economic implications of the ANC elective conference
John Haynes, Head of Research, Investec Wealth & Investment UK, contextualises some of the political uncertainties South Africa is facing at the moment, drawing parallels with the UK in the wake of last year’s Brexit vote.
However, he notes that South Africa and the UK are the exceptions and that as investors we need to acknowledge the positive forces at work in the global economy – which are manifesting themselves in positive, synchronised growth across the major markets.
"The politics are part of an upshot of the profound changes to our society that are coming about as a result of the technology hurricane that we’re all living through, and it’s forcing us to reinvent ourselves."
John Haynes, Investec Wealth & Investment
Our special guest, Justice Malala, predicts a very narrow victory for Cyril Ramaphosa in the ANC Elective Conference and believes that if this happens, South Africa's economic recovery will be swift.
Justice says however that it won't be doom and gloom if another candidate wins as South Africa has a strong civil society and institutions, manifest in a free press and independent judiciary, which means that politicians can be called to account.
"If the result is a good, positive one, the turnaround for South Africa will be swift, the inflow of confidence in the system will be huge and we will be back to being a winning country very very quickly."
Justice Malala, political commentator
Portfolio manager Paul McKeaveney discusses Investec Wealth & Investment’s portfolio positioning in the light of these local and global trends. He notes that despite the uncertainties, South Africa is at a point of great opportunity, should the Elective Conference give a market-friendly result.
If the global growth momentum is maintained, it will provide a positive backdrop for a political leadership ready to tackle key issues, such as addressing state capture and dysfunctional state-owned enterprises.
Paul adds however that even in the case of a positive outcome, a South African investor should try to hold a considerable portion of their investment portfolio offshore, simply to take advantage of some of the available global opportunities.
"South Africans should have a considerable portion of their assets invested offshore not just purely because of what could happen in South Africa, but the opportunity set globally is obviously much wider."
Paul McKeaveney, Investec Wealth & Investment
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