JOHANNESBURG: South Africa’s banks index rose in Johannesburg to levels not seen since before President Jacob Zuma unexpectedly fired finance minister Nhlanhla Nene in December.
The seven-member FTSE/JSE Africa Banks Index climbed as much as 4.2 percent on Thursday in the city to its highest since December 4. The biggest gainers were Barclays Africa, which rose as much as 6.3 percent, and Standard Bank, the continent’s largest lender by assets, which jumped as much as 6 percent. The rand, which tumbled after Zuma’s move, has rebounded to be 0.4 percent higher this year.
The day after Nene was removed on December 9 and a little-known lawmaker appointed to the post, the banks index crashed by a record 14 percent. That turned into the deepest two-day decline since the end of apartheid in 1994 as more than R150 billion was wiped off the value of bank shares. While Zuma backtracked and named Pravin Gordhan finance minister four days after the Nene announcement, bank stocks have taken more than 10 weeks to recover.
“There are quite a few developments in the last two to three weeks that have been positive for South Africa, the rand and for the banks’ funding costs,” Nico Smuts, an analyst at 360ne Asset Management in Johannesburg, which oversees the equivalent of about $650 million, said by phone. “Those have come together to form a much more positive outlook for the banking sector for the year ahead.”
