On a forward P/E basis, Johannesburg stocks usually traded at a 10% discount to emerging markets, but currently trade at a 35% premium, according to Barron’s. Media firm Naspers, EZA’s largest holding at 13.5%, trades at nearly 29 times forward earnings. With South Africa’s account deficit issues and high unemployment not likely to disappear rapidly, it could take a dovish outlook from the Fed to compel investors to put new capital to work with the country’s expensive stocks.
iShares MSCI South Africa ETF
ETF Trends editorial team contributed to this post.