A South Africa country-specific exchange traded fund stood out Friday as President Cyril Ramaphosa pushed to reopen parts of the economy next month after a five-week coronavirus lockdown.
The iShares MSCI South Africa ETF (NYSEArca: EZA) was among the best performing non-leveraged ETFs of Friday, rising 1.9%.
Ramaphosa announced Thursday night that South Africa will begin a phased easing of lockdown restrictions, Reuters reports. Starting on May 1, some industries will open for business while internal travel restrictions are eased.
“While a nation-wide lockdown is probably the most effective means to contain the spread of the coronavirus, it cannot be sustained indefinitely. Our people need to eat. They need to earn a living. Companies need to be able to produce and to trade, they need to generate revenue and keep their employees in employment. We have accordingly decided that beyond Thursday 30 April, we should begin a gradual and phased recovery of economic activity,” Ramaphosa said in an address to the nation, according to Pound Sterling Live.
South Africa’s pummeled economy, surging debt and widening fiscal deficit have weighed heavily on the rand currency, the worst-performing emerging market currency.
Looking ahead, economists project South Africa’s economy is set to contract between 6% and 10% this year.
“There are at least two different elements for where investors can look upon South Africa in a positive light. One of them is that it actually has a plan to loosen restrictions,” Head of Strategy at FXTM Jameel Ahmad told Reuters.
“Secondly, and this is the most important reason of them all, is because South Africa managed to react relatively early to all of this compared to peers in far more advanced places, and this has helped prevent an extended outbreak,” he added.
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