South Africa's position on world markets "should rally back very strongly" in response to President Jacob Zuma's about-turn on the firing of his finance minister, but there will be "a permanent loss of trust" in his leadership, says emerging markets economist Peter Attard Montalto.

In comments in response to Zuma's shock decision to replace the finance minister he appointed last Thursday, Montalto said that Pravin Gordhan, who was finance minister until the 2014 elections and has now been re-appointed, is "very market friendly, fiscally conservative and a welcome move."

He added that his understanding was that there was such "gloom and pessimism" at the firing on Wednesday of Nhlanhla Nene as finance minister, from civil society, business, unions and others, that members of the ruling African National Congress lobbied internally and forced the change of course.

He suggested that while the firing of Nene had looked like a victory for those who sought personal benefit from government tenders, the fact that Zuma was forced to reverse his decision was "a very damaging move for him personally. It may also speak to a more nuanced and split of ANC with the left and conservative centre left able to still have more influence that thought before."