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


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...

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