Rand ex­cited to see the back of tainted Ja­cob Zuma

African Times - - Business - MTHULISI SIBANDA

THE volatile South African cur­rency, the Rand, is fore­cast to strengthen against ma­jor cur­ren­cies if the rul­ing African Na­tional Congress (ANC) suc­ceeds in its plans to re­call Pres­i­dent Ja­cob Zuma.

Zuma’s ca­reer ap­pears to be hang­ing by the thread ow­ing to pre­vail­ing re­ports the ANC Na­tional Ex­ec­u­tive Com­mit­tee (NEC), the party’s high­est or­gan, is work­ing on an exit plan for the scandal-prone politi­cian to re­sign.

His po­lit­i­cal for­tunes have taken a bat­ter­ing af­ter a fac­tion of the party aligned to him, and led by for­mer wife Nkosazana Dlamini-Zuma, lost at the elec­tive con­fer­ence in De­cem­ber.

Then, the Rand re­acted pos­i­tively fol­low­ing Zuma’s party and govern­ment deputy, Cyril Ramaphosa, win­ning the con­test to suc­ceed him.

It firmed by al­most 4 per­cent against the US cur­rency to R 12,55.

On Mon­day, it hit a fresh twoand-a-half year high, trad­ing at12,08 in a move an­a­lysts at­trib­uted to prospects of Zuma’s exit from of­fice as leader of Africa’s most ad­vanced econ­omy.

He has led South Africa since 2009 af­ter tak­ing over from Kgalema Mot­lanthe, who served from 2008, fol­low­ing the res­ig­na­tion of Thabo Mbeki.

John Cairns, the Rand Mer­chant Bank (RMB) Cur­rency Strate­gist, said, “Do­mes­tic po­lit­i­cal devel­op­ments will spur yet fur­ther op­ti­mism to­wards the Rand.”

He said the ap­point­ment of a new board at the be­lea­guered power util­ity, Eskom, as well as the World Eco­nomic Fo­rum (WEF) an­nual in Davos, Switzer­land also raised prospects of a bet­ter per­for­mance by the lo­cal cur­rency.

Govern­ment has ap­pointed busi­ness­man Jabu Mabuza as the new chair­per­son with Phaka­mani Hadebe as the act­ing group chief ex­ec­u­tive.

“Ex­pect fur­ther op­ti­mism as the South African con­tin­gent at Davos talks the talk. South Africa is even, ac­cord­ing to some re­ports, be­ing touted as the emerg­ing mar­ket story of 2018!” Cairns added.

Ramaphosa is lead­ing the South African del­e­ga­tion to Davos.

Zaaki­rah Is­mail, the Stan­dard Bank Fixed In­come Strate­gist, said these mar­ket-per­ceived “pos­i­tive devel­op­ments” saw the Rand in Stan­dard’s first quar­ter 2018 (Q1:1)8 trad­ing range of 12,00 to12,20 to the US cur­rency.

“Our con­struc­tive Rand view as well as the an­nounce­ments over the week­end are im­por­tant pos­i­tive devel­op­ments in terms of the pol­icy steps re­quired ahead of the Moody’s credit rat­ing re­view af­ter the 2018 Bud­get,” Is­mail said.

She also men­tioned govern­ment also an­nounced sev­eral mea­sures to strengthen gov­er­nance at Eskom.

This in­cludes the ap­point­ment of a new board and a di­rec­tive to the board to re­move those ex­ec­u­tives that face al­le­ga­tions of cor­rup­tion.

Absa Cap­i­tal stated it was pos­si­ble the ANC could re­move Zuma af­ter Ramaphosa re­turned from Davos but al­ter­na­tively it could wait to al­low him to give the State of the Na­tion Ad­dress in early Fe­bru­ary, so Zuma could take re­spon­si­bil­ity for the fund­ing costs of his an­nounce­ment on free uni­ver­sity ed­u­ca­tion at the ANC con­fer­ence in De­cem­ber.

“But, re­gard­less of the pre­cise tim­ing of Zuma’s de­par­ture, the de­ci­sion of the NEC is pos­i­tive, in our view,” the firm stated.

Ac­cord­ing to Absa Cap­i­tal, an­other im­por­tant move by the NEC, which fur­ther loosens the grip of the Zuma fac­tion on the ANC, was the de­ci­sion to dis­band the pro­vin­cial lead­er­ships of the Free State and KwaZulu-Natal in­stead of al­low­ing the court-in­val­i­dated lead­er­ships to con­tinue to op­er­ate, but as tem­po­rary pro­vin­cial task teams. – CAJ News

Pic­ture: Den­vor de Wee/ Vis­ual Buzz SA

FU­TURE UN­DE­CIDED: Pres­i­dent Ja­cob Zuma’s ca­reer is hang­ing by a thread.

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