ZAR: Focus on ANC successor voting – Danske Bank

In South Africa, the ANC party delegates will cast their votes today for a successor to Jacob Zuma, points out the research team at Danske Bank.

Key Quotes

“There are two front-runner candidates: 1) Zuma’s candidate, and ex-wife (!), Nkosazana Dlamini-Zuma, is leftish leaning candidate promoting more rights to the black population and 2) Deputy President Cyril Ramaphosa, a pro-business businessperson, who is seeking to distinguish himself from Zuma’s administration and corruption charges.”

“Ramaphosa is currently the front-runner (benefiting the ZAR), but the outcome is far from given. As the voting begins, the ZAR hits its three-month high against the USD at 13.08, posting 7.3% of 1M total return. If Mr. Ramaphosa wins, the USD/ZAR may break below the 13 benchmark. However, in such event, there may still be a messy aftermath with Jacob Zuma fighting for his political survival as he can still sit out the term until the presidential election in 2019, but there overall there are downside risks to our current forecast of 13.7 in 3M for USD/ZAR.”