South Africa and its related exchange traded funds (ETFs) could have some noticeable changes in store after a political shift took place in the country over the weekend.

President Thabo Mbeki has left the government, but the financial markets in the country so far seem to be taking this shift in stride, reports Robb M. Stewart for the Wall Street Journal. The African National Congress has told parliament it will elect a replacement on Tursday.

Jacob Zuma, the ANC party boss, and Mbeki were in a bitter party leadership contest last year. Now that Mbeki is out, Zuma will be scrutinized for clues about how he will steer the economy if he wins elections, which he is expected to do.

South Africa is the largest economy on the continent, but growth has stalled recently. The state power company struggles to keep up with demand, which has hurt some of the largest industries in the country (such as mining). There has also been a commodities boom, amid which the disparity between the haves and have nots has widened, giving rise to bitterness.

Some are worried about whether Zuma plans to tinker with Mbeki’s generally pro-business economic policies. What happens, though, remains to be seen.

Affected ETFs include:

• iShares MSCI South Africa (EZA), down 19.6% year-to-date
• NETS FTSE/JSE Top 40 (JNB), down 32.3% since May 22 inception

Tags: Emerging Markets, EZA, JNB, South Africa