Last week was an eventful one for the iShares MSCI South Africa ETF (NYSEArca: EZA). The largest US-listed exchange traded fund dedicated to stocks in Africa’s second-largest economy slid almost 5% after the government removed the country’s finance minister and his deputies.
The country is a major gold producer as well as being as one of the top two producers of palladium and platinum in the world. South African miners have been enjoying improved margins due to a surge in prices on raw materials like iron ore and platinum while the rand currency depreciated against the dollar.
Some analysts also believed that palladium could continue to shine as tightening market conditions will continue through 2018. Traders have increased positioning in future market as automobile sales hit record highs, especially with rising automobile sales in China.
Last week, South African President Jacob Zuma removed Finance Minister Pravin Gordhan, news that spooked investors and sent EZA tumbling in the last two trading days of the first quarter.