This is a fast moving story, as you can
anticipate. So right now, you were just mentioning
that model. It's important to note what it actually
is. It's from the Council for Scientific and
Industrial Research or C. S i r and it is a government agency has
a 2% margin of error and in the past has been quite accurate.
And so what it is showing, as you were mentioning, A and C right now based on
the votes cast is is on course to win 42% of the vote in Wednesday's national
election. And that is right now we're just at
about just over 12% of voting districts that are counted, which is important to
note. And as you mentioned, this would
potentially, if this continues, would be the first time that the ANC does not get
this majority and potentially could be the reason why we are seeing the
reaction in the dollar or in the rand excuse me, the models also showing some
interesting stats. It shows the main opposition party, the
Democratic Alliance, likely to win just over 22% of the vote nationally.
The EFF, which we've been speaking about quite a bit, just over 9%, and former
President Jacob Zuma's party, just over 12%.
And so, as I mentioned, you know, it's still relatively early, but clearly
having an impact on investor sentiment. Okay, let's talk about that investor
sentiment, Jen, Why is the possibility of a coalition making investors nervous?
Right. So, Guy, we had been talking about this
leading up to the election and it really was not the best case scenario that we
would potentially see the ANC dip below the 50%.
And that is because really, if we look at the local level across South Africa,
coalition governments have been quite unstable.
And so investors were a little bit jittery about if this were to happen,
that the ANC gets below the threshold, they're going to have to partner with
some of the smaller opposition parties, not necessarily the main opposition
party, the Democratic Alliance, which is a bit more market friendly.
And so that really is part of the reason why we are seeing the rand down by a
weakening by as much as 1.6% against the dollar.
We're also seeing the Johannesburg Stock Exchange tumble.
And it just seems like the volatility may continue until we get a bit more
clarity whether or not the ANC or where the ANC falls in terms of their
percentage of support. But then also, what does a coalition
potentially look like if it is one of the smaller parties like the EFF, they
may demand or ask for more say over the economy, potentially ministerial
positions. And so it seems like investors are just
watching quite closely as to what this could actually mean moving forward.
