South Africa’s stock market is enjoying its strongest gains since June 2016, after president Jacob Zuma confirmed in a late-night address to the nation that he would resign to avoid a no-confidence vote.
Deputy president Cyril Ramaphosa is lined up as successor to Zuma, whose nine years in office have been tainted by allegations of corruption and economic malaise. Among Ramaphosa’s first tasks will be the delivery of South Africa’s 2018 budget next week.
Investors are hopeful that Ramaphosa can transform South Africa’s economic performance. The country’s annual growth has averaged 1.6% under Zuma and the unemployment remains near a historic high of 27.7%. Other problems include rapidly dwindling supplies of water in Cape Town, the second-largest city.
The rand has performed strongly against the dollar since Ramaphosa’s election on December 18 as leader of the African National Congress
The FTSE/JSE Africa All Share index was 2.7% higher in Thursday’s trade, extending recent gains.
Bank stocks were particularly strong, with Standard Bank Group, FirstRand and Nedbank Group advancing by more than 3% to all-time highs as the sector index gained as much as 4.6%.
Mining stocks had their best session since November as some investors expect a Ramaphosa-led government to review proposed new rules for the industry.