South Africa ETF Weighed by Slowdown | ETF Trends

The economy of South Africa has slowed to an alarming rate, enough to caution the market and exchange traded funds (ETFs).

Growth was almost at a standstill at an annualized 0.2% for the third quarter, which is the slowest pace in more than a decade. A recovery is not in the near future as the global credit crisis has taken away the demand for platinum and gold, report Nasreen Seria and Mike Cohen for Bloomberg.

The good news is for the South African rand, which has rallied to its highest level in three weeks after the Federal Reserve announced the $800 billion plan.

The plan is intended to thaw credit markets and create liquidity, which in turn has fueled demand for higher-yielding currencies, reports Garth Theunissen for Bloomberg.

The South African rand has advanced to a two-week high and has gained against United States and European markets. In turn, the FTSE/JSE Africa All Share Index was up 6.9%, the biggest jump since October.

  • WisdomTree Dreyfus South African Rand (SZR), down 17.6% since July 8 inception

South African Rand ETF

  • iShares MSCI South Africa (EZA), down 47.3% year-to-date

South Africa ETF

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.