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JOHANNESBURG - Business chief executive  confidence in South Africa  reached levels last seen in 2012  in the first quarter of the year,  led by a surge in sentiment  among financial services’ sector  head honchos. 

The Merchantec CEO confidence  index surged 56.18 percent  in the quarter to 60 points  from 38.4 points in the last  quarter of last year.  This was also the first time  the index moved above the neutral  score line of 50 points since  the first quarter of last year. 

Merchantec said improved  economic conditions and industry  growth were the biggest  contributors to the massive  confidence leap among chief  executives. 

“Most chief executives have  indicated that the election of  the new president has had a  positive boost on their business.  However, some chief executives  are still sceptical over
economic growth prospects  following policy changes such  as the (VAT) increase as well as  the rumblings of land expropriation  without compensation,”  the research firm said. 

“One prominent chief executive  said that despite the ‘land  issue’, South Africa’s political  outlook and business optimism  has significantly improved  since the December election  of Cyril Ramaphosa as ANC  president.” 

The quarterly index collates  responses from more than 1 000  chief executives, primarily  from the listed environment.  The financial sector  recorded the largest increase  in confidence. Sentiment in  the sector soared 65 percent to  69 points, on the back of a surge  of 105.3 percent increase in confidence  relating to economic  conditions and an increase of  71.1 percent in industry growth  expectations. 

Sentiment in the industrials  sector surged 51.4 percent moving  to a score of 59.27 points,  while confidence in the consumer  services increased by  40.7 percent to 60.88 points.
Confidence in the technology sector increased from 39.11 points to 49.77 points, while consumer goods jumped from 46.52 points to 61.11 points. 

However, the basic material sector saw a marginal decline in confidence, decreasing from 47.14 points to 45.83 points. Outgoing FirstRand chief executive Johan Burger last month became the latest captain of industry to pin his businesses growth hopes on the elevation of Ramaphosa to the country’s head of state. 

Nedbank chief executive Mike Brown was the first banking leader to applaud the elevation of Ramaphosa to head of state, saying the move was a lift in confidence levels across corporate and retail customers, which was favourable for the banking sector.  The sentiment sensitive  banking and financial services  sector has enjoyed a stellar  start to the year, riding the  wave of the positive sentiment. 

- BUSINESS REPORT