CAPE TOWN - South Africa’s assets gained yesterday with the rand surging as much as 1.7% in part because a parliamentary speaker allowed a secret ballot in today’s vote of no-confidence against President Jacob Zuma.
The prospect of a secret ballot raises the chances of the departure of Zuma, which traders see as a net positive for the rand.
At 5.02pm, the rand firmed 1.17% to R13.2613 to the dollar, giving up some of the gains after strengthening to R13.1825 shortly after National Assembly speaker Baleka Mbete announced the decision.
The decision could embolden members of the ANC to vote against Zuma and puts him in a precarious position as he struggles to fend off opposition accusations of corruption and mismanaging the economy.
“I still think the vote will fail, there is maybe a 30% chance of success, but it won’t be truly secret and there will be intense pressure on MPs. Ultimately a secret ballot wouldn’t have been offered unless Zuma was confident of wining,” said Nomura emerging markets economist, Peter Attard Montalto.
On the bourse, banking stocks rose, extending gains after news that critics hoped would pave way to oust Zuma - who is widely blamed for the country’s loss of highly prized investment grade sovereign credit rating.
The banking index rose 1.1% outpacing a 0.52% gain to 49763.82 in the blue chip JSE Top40 index, with Barclays Africa Group up 1.82% at R149.17 and competitor Nedbank rising 1.69% to close at R229.71.
The broader all share index gained 0.39% to end the session at 56163.6 points.