Betting on South Africa’s Ruling Party Winning the Election

A South African election outcome that sees the ruling party win 55-60 percent of the vote could boost shares in banks and insurers, retailers, locally focused industrial companies, property firms and telcos, according to UBS Group AG. An opinion poll released Monday showed the ANC is likely to secure 61 percent support. UBS has listed a basket of 20 stocks correlated to rand strength, including financials, retailers, industrials, property and telcos. The second of the six-month products is based on a group of 10 domestically focused, “South Africa Inc.” stocks tipped to benefit most from lower bond yields, a stronger currency and improved growth and consumer sentiment. While South African equities look expensive, “opportunities exist within sectors such as financials and property stocks benefiting from lower bond yields, and retailers and food producers on attractive valuations relative to history and exposed to the consumer,” Pillay said.

SOURCES: BLOOMBERG

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