South Africa: Growth Falters As Reforms Lag, but the Cult of Optimism Stands Strong

analysis

The local financial markets are well aware of SA's economic and political shortcomings, and share values have long reflected that. So, is our only way up, or are we yet to hit rock bottom? The believers say we still have room to manoeuvre, but we need to get moving.

Shares on the JSE are trading on the cheap and the anticipated overall dividend yield of 6% is not shabby, money managers say. But does it hold enough appeal for investors to dive back into the market?

Analysts say there is value to be had in companies like Bidvest, Capitec the big four banks and even some of the cellphone operators.

Some are taking long positions in Redefine and FirstRand and shorting Kumba.

But Dawie Kloppers, an investment economist at PSG Wealth, says the market has already priced all the bad news into these valuations, and these stocks are trading at attractive levels. He adds that there is not much negative news left that can shock the market.

The only grey area, he says, is whether Moody's will downgrade SA's investment rating. But Kloppers doesn't believe this will happen.

Absa economist Miyelani Maluleke agrees. According to the bank's Quarterly Economic Perspective...

See What Everyone is Watching

More From: Daily Maverick

Don't Miss

AllAfrica publishes around 700 reports a day from more than 140 news organizations and over 500 other institutions and individuals, representing a diversity of positions on every topic. We publish news and views ranging from vigorous opponents of governments to government publications and spokespersons. Publishers named above each report are responsible for their own content, which AllAfrica does not have the legal right to edit or correct.

Articles and commentaries that identify allAfrica.com as the publisher are produced or commissioned by AllAfrica. To address comments or complaints, please Contact us.