Standard Bank said on Friday that the African National Congress (ANC) will get enough votes in the upcoming 2024 elections and will not need to form a coalition government.
The banks argued that the ANC will “notch up sufficient votes in the May 29 election to avoid a coalition that could steer policy towards a more populist stance”.
A different tune
Last month at a press briefing, Standard Bank’s chief economist Goolam Ballim said that the ANC had a 75% chance of losing its majority in the 2024 elections.
He did not explain his methodology, but noted that he thinks the ANC has 65% probability of getting between 45% and 50% of the vote and a 10% chance of falling below that.
Standard Bank forecast that the Democratic Alliance (DA) would get around 22.5% of the vote, while the Economic Freedom Fighters (EFF) would get around 11%.
IOL NEWS has reached out to Standard Bank for more information on the data that was used to come up with their predictions and why there has been new developments in their predictions. This is a developing story.
Investors be warned
The bank gave a warning to investors on Friday and said that they should brace for a tumultuous period as the country heads to the polls.
The bank told Business Report that, ”political uncertainty and risk aversion may keep investors sidelined and underweight“ in South African equities.
The best scenario
In the best scenario, the bank noted that there may be a considerable amount of investment in certain sectors.
“If our base-case outlook of the ANC garnering sufficient votes plays out, implying policy continuity, we expect foreign investors to add risk to portfolios and start investing in interest rate sensitive equity sectors such as general retailers and industrials,” the bank said.
Standard Bank said that it expects renewed investor interest in the industrials and general retailers sectors in the second half of 2024, based on prospects for monetary easing and improved job creation as SA’s energy constraints ease.
Political uncertainty
Standard Bank said that there could be political strife going into the elections.
“The political uncertainty going into the elections should keep foreign investors largely defensively positioned in defensive sectors,” the bank noted.
These sectors include food and drug retailers and financials.
Standard Bank noted that this was likely to persist in the near term, “until short interest rate relief is more imminent and there is greater political” visibility or clarity.
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