President Donald Trump recent remarks on South Africa’s new decree on land reform highlights the potential risks to the emerging market financial system and country-specific ETF.

The iShares MSCI South Africa ETF (NYSEArca: EZA) declined 2.6% Thursday, reversing a four day positive streak, after President Trump tweeted that he asked Secretary of State Mike Pompeo to look into the overhaul land ownership and “large scale killing of farmers” in South Africa.

The ruling African National Congress said it plans to change the constitution to allow the expropriation of land without compensation in an effort to overcome deep inequalities in land ownership the country, the Wall Street Journal reports.

White South Africans who make up 8% of the country’s population own 73% of agricultural land, according to the farmers association Agri SA.

However, South Africa’s state-owned Land Bank has stated that this plan to allow the state to seize land without compensation could trigger wide defaults that would translate to a loss of 41 billion rand, or $2.8 billion, to the government if the bank’s right as a creditor is not protected, Reuters reports.

9 billion rand of debt

Land Bank Chairman Arthur Moloto previously said in a report that the bank has approximately 9 billion rand of debt, including a standard market clause on “expropriation” as an event of default. If expropriation without compensation were to occur without protection, it would trigger an immediate repayment of 9 billion rand.

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