South African markets and country-specific exchange traded fund rallied Monday as investors were optimistic that pro-reform candidate Cyril Ramaphosa secured victory in the ruling ANC’s leadership vote.
The iShares MSCI South Africa ETF (NYSEArca: EZA) increased 5.0% Monday and was up 25.8% year-to-date.
Banks were among the best performers in South Africa’s equity market, with the FTSE Johanessburg Stock Exchange sub-index of bank stocks up 6.6% to its highest level on record. EZA includes a hefty 27.6% tilt toward financials, followed by 27.4% consumer discretionary and 12.5% materials.
South African Deputy President Cyril Ramaphosa was elected leader of the African National Congress Monday in a tight vote, vowing to fight rampant corruption in a scandal-plagued party and to revitalize the economy, report Alexander Winning and Nqobile Dludia for Reuters.
“Politicians are under pressure to change and they are getting a reaction not just form the local electorate, but from markets. It will be pressure from both those angles that will force change,” Simon Quijano-Evans, strategist at Legal & General Investment Management, said.