The Mad King

We have had numerous queries regarding the resilience of the ZAR in the wake of Jacob Zuma’s most recent cabinet re-shuffle. In reality, yesterday’s re-shuffle served as an affirmation of what we already know. The new Energy Minister, David Mhlobo, is well a known Zumalite. In September, Mr Mhlobo accompanied two former jailbirds–turned–politicians, Gayton Mckenzie and Kenny Kunene to Russia as part of an investment delegation for Russian-led gas projects.  READ:  NUCLEAR DEAL.

Some commentators where surprised not to see presidential hopeful Nkosazana Dlamini-Zuma appointed to cabinet. Last week saw Julius Malema and Bantu Holomisa calling NDZ’s candidacy a smokescreen, teeing up Zweli Mkhize as Zuma’s real chosen successor. So yesterday’s events further connected the already partially connected dots. The big unknown is who succeeds Zuma and we’ll only have the answer in December. Every move the Mad King makes before then is largely “predictable”. We believe investors and ratings agencies are waiting on the medium-term budget speech to re-affirm the inevitable decision to downgrade SA’s local debt issuances, here-in lies the true risk to the ZAR.

Diarise November 24^th and pay attention!