Investors Are Looking Past South Africa’s Dismal Economy?
- Rand hedges, gold stocks help drive three days of gains
- Foreign investors have been net buyers for five sessions
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After a shocking reading on the state of the South African economy and with muddled messages from the ruling party on the central bank’s role hastening the rand’s slump, you might think Johannesburg stocks would be in retreat. But that’s not the case.
Sure, shares in banks and other domestically focused “South Africa Inc.” companies got punished after figures Tuesday showed the worst contraction in the economy for a decade. That news, along with confusion over statements from the ruling African National Congress over the central bank, pushed the rand to eight-month lows. South Africa’s benchmark stock index has taken this all in its stride, and is set to rise for a third day as of Wednesday afternoon.