Market Commentary 18 July 2018

Given the stark change in SA’s political direction since Cyril Ramaphosa’s victory at the ANC elective conference, many commentators have been drawing parallels between SA and Brazil – concluding that SA’s “Brazil moment” has arrived.

To provide context to these parallels, Dilma Rousseff – Brazil’s then corrupt president – was impeached on 31 August 2016 in a process which had begun in December 2015. This saw the Brazilian iBovespa Stock Exchange Index (Bovespa) rise by 86% since the impeachment process was initiated, and by 45% since Rousseff was impeached inAugust 2016:

Figure 1: Brazilian Bovespa Index – rebased to 100 at 2 December 2015 (impeachment proceedings started)

The JSE jumps in June, despite trade-war talk The JSE jumps in June, despite trade-war talk