A FUND manager at South Africa’s largest investment firm believes there’s a low probability that the ruling African National Congress will coalesce with leftist parties after this month’s elections should it fail to get a national majority.
Ninety One’s view contrasts with that of other investors, who appear to be pricing in a scenario in which the ANC’s support drops to around 40% after the May 29 vote, leading it to tie up with the Economic Freedom Fighters, or uMkhonto weSizwe Party.
Both parties favour the nationalisation of the central bank and land expropriation without compensation.
The valuation and positioning that investors have taken on the country’s locally focused stocks indicates that the market is 80% sure of such an outcome, Ninety One Value Fund’s portfolio manager, John Biccard, said in an emailed note. – Bloomberg