The exchange traded fund (ETF) iShares MSCI South Africa Index (EZA) could see movement on the news that its largest holding, Sasol, announced plans to transfer 10% of the group to employees and black investors. This would be the biggest single black economic empowerment (BEE) deal in the country to date, according to Mathabo Le Roux for Business Day. Sasol (SSL), a petrochemicals company, makes up 11.1% of EZA. The company plans to sell 3% of the group’s equity to the black South African public, and 1.5% will be made available to BEE groups such as empowerment groups involved in Sasol’s business, broad-based BEE groups with a skills development focus, and womens groups. Sasol’s 2,700-person workforce below management level will receive a 4% stake in the company.
EZA benefits from South Africa’s role as the financial backbone of Africa. Its gross domestic product (GDP) is four times that of its southern African neighbors and comprises about 25% of the entire continent’s GDP. In addition, the country leads the continent in industrial output, mineral production and electricity generation, according to SouthAfrica.info.com. Currently, EZA is up 11.2% year-to-date.
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