Upcoming South African General Elections

Upcoming South African General Elections

Brexit and the US-Sino trade war are in the news again this week, but we are more focused on our own General Elections taking place in just under a week on the 8th May. We have asked our consulting political analyst, Professor Ivor Sarakinsky, to contribute an exclusive article for our clients on his insights into voter trends, the potential outcomes at both national and provincial levels, and the political landscape post the election. We will compile and distribute further analysis once the election results are known. Find the link below.

Dynasty’s  SA Election Analysis

Dynasty’s view in terms of the election outcome is that we may well have a second wave of positive sentiment (a ‘Ramaphoria Two’ so-to-speak), the first having taken place when Cyril Ramaphosa was elected as president of the country in February 2018. This would be conditional on a minimum support level of 60% for the ANC being achieved. In this scenario, a smaller Cabinet would be formed, but there could still be compromised ministers due to the factional interests within the ruling party. Our opinion is that strong support for the ANC does not at all guarantee that the opposition to President Ramaphosa from within the party will abate. Indeed it could well escalate as the patronage factions continue to frustrate Ramaphosa’s initiatives to introduce structural reforms, policy certainty and high-level prosecutions against those suspected of serious corruption.  Under this scenario, Ivor Sarakinsky’s article entitled The 2019 Elections: Changes in Political Risk? highlights how Ramaphosa may only be a one-term president. Our conclusion therefore is that although we may be on a far more positive trajectory post the election, political risks will, unfortunately, remain elevated and we will need to protect our clients’ investments accordingly.

Global News

  • Britain had local elections yesterday where the populous took the opportunity to display their resentment of Brexit and the prolonged process around it. The Conservative Party have haemorrhaged councillors while the Liberal Democrats and Independent candidates have made large gains.
  • The Fed left rates unchanged on Wednesday, Powell said that they do not see a strong case for either lifting or cutting rates, reaffirming their “patient” stance.
  • A report released by CNBC was celebrated this week as it said that the US and China could have a trade deal by, 10th May 2019.
  • The story making headlines in the US this week has been the unravelling of Attorney General William Barr. It was revealed this week that special counsel Robert Mueller had written a letter expressing concern over Barr’s four-page summary of the Russian investigation report, suggesting that the summary may have mischaracterised some of the report’s findings. Now Nancy Pelosi is saying that Barr “lied” to Congress.
  • Trump lost an attempt to block a lawsuit that claims he is violating the constitution by conducting business in foreign countries.

Local News

  • Follow this link for an article from Investec’s Nazmeera Moola on taking stock of the South African economy in the context of the upcoming elections.
  • A new CEO of Transnet has been appointed. Mohammed Mahomedy is set to replace Tau Morwe as acting CEO.
  • Pieter-Louis Myburgh, the author of the recently published book Gangster State, has been sued by Vikash Narsai a businessman from Durban for defamation. Myburgh’s book alleged that Narsai was embroiled in a corrupt R220 million Free State housing project. Narsai is seeking R10 million in damages.
  • In a landmark case, the Court of Arbitration for Sport has rejected Caster Semenya’s challenge against IAAF rules forcing her to lower her testosterone levels to compete with women. Her legal team say her advantages are no different from other genetic variations celebrated in sport – and that “her genetic gift should be celebrated, not discriminated against”. Follow this link for more.
Source: Dynasty, Stanlib, Prescient, Daily Maverick, Moneyweb, Reuters, RMB, Aljazeera, and Bloomberg Markets, etc

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