Global investors eyeing election results

Global investment banks are keeping a keen eye on the election results‚ with at least one pondering the implications of what it predicts will be a “record swing” away from the ANC to the DA and EFF.

In its inital comment on the election on Thursday evening‚ Japan’s Nomura capital said some key trends were already emerging.

It said the DA and EFF’s strong showing in key battleground metros like Johannesburg‚ Tshwane‚ and Nelson Mandela Bay underlined the fact that the ANC was increasingly “becoming a party of the rural vote‚ and hence the focus in recent years on delivering things such as traditional leaders legislation and land reform”.

The bank’s analysts were surprised at the extra strength of the DA support in already stronghold areas such as the Western Cape.

“The DA‚ however‚ has failed to meaningful break higher over 30%… [which] may limit the longer-run growth of the party. They will have to show that their wider foot print can drive momentum in future elections.”

On the subject of President Jacob Zuma’s prospects of retaining office after the elections‚ Nomura cautioned against reading too much into the ANC’s slide in support.

“There will be as much pressure on [Zuma] from his own side as from the other within the ANC – and all focus will shift to winning the elective conference at the end of next year.”

With the battleground metros still too close to call‚ the bank said investors will be keenly interested in the possible coalitions that will emerge.

Commenting on Nelson Mandela Bay‚ in particlular‚ Nomura said‚ “We think that the DA may still be able to take it outright or in coalition with UDM after PR top up seats are allocated.

“The UDM would be an interesting investor-friendly coalition partner vs the more unpredictable possibility of EFF.”