Foreign investors circumspect ahead of SA's most pivotal polls since 1994 - Analysts
The slip expected in the support for the country’s governing party, the ANC, has sparked fears that a market-unfriendly coalition government might emerge after the country votes next week.
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JOHANNESBURG - Some analysts believe foreign investors have adopted a wait-and-see approach as South Africa heads to its most pivotal polls since 1994.
African National Congress (ANC) support is expected to slip when the country votes on 29 May, sparking fears a market-unfriendly coalition government may emerge after elections.
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The chief investment strategist at Investec, Chris Holdsworth, said there’s very little incentive for global investors to take big positions before the elections.
“I think what we will likely see is foreign investors sitting on the sidelines until we get to the results or even post the results.
“We need to see what impact those results are going to have on domestic policy, and that’s going to take a little while to come about.”
The healthcare equity analyst at Investec, Letlotlo Lenake, said costly policies like the National Health Insurance (NHI) would also affect investor sentiment.
“If the NHI bill is implemented in its current form, without any material changes, it presents a material risk to our fiscus. That is very clear.”