South Africa’s stocks soar as investors rush back in
South African stocks extended their winning run to eight consecutive months in October, marking the longest such streak since early 2013. The benchmark FTSE/JSE Africa All Share Index climbed 1.5 percent during the month as investors responded to improved domestic economic prospects and expectations for easier monetary policy worldwide.
Banking, technology and telecommunications companies drove the rally, joining earlier gains from precious metals producers. Analyst Lester Davids at Unum Capital attributed the momentum to macroeconomic confidence and a shift toward developing nation assets. He noted that domestically focused companies have attracted interest due to their cheaper valuations compared with international counterparts. The advance forms part of a broader emerging markets surge, with that sector’s benchmark poised for 10 straight monthly increases.
South Africa received additional support after being removed from a financial crimes watchdog list on Oct. 24. The Paris-based Financial Action Task Force acknowledged government progress against money laundering and terrorism financing. Bank stocks have drawn buyers seeking high dividend payouts and low price-to-earnings multiples. Technology investor Prosus and parent company Naspers have benefited from recovering Chinese tech equities. Mobile operator MTN Group surged roughly 20 percent in October on stronger results from Nigeria and Ghana.
