Sun. May 19th, 2019

South African elections 2019: Results and investments

South African elections results investmentsUsing prediction programs to hedge your investment bets.

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Many people, apart from some poor journalists, will probably be quite relieved when the voting on Wednesday comes to an end. But when will we get results, and what should we watch out for.

Official results usually only get announced a few days after the elections. Various groups, however, have developed computer programs which predict the final results reliably as soon as a fair number of voting districts are known.

Read: Here’s what happens if electoral votes tie in South Africa

Election results and statistical projections

So those interested will already have a good indication of which way the wind blows by early Thursday morning. One such program was developed by the author and a few colleagues, so check in regularly on Thursday to see our updated forecasts.

The results of the elections have both political and economic ramifications. It is almost certain that the ANC will again control the country, but some of the provinces, in particular, Gauteng, is much more difficult to call. If the ANC gets less than 50% in a province, we will again be in the realm of coalition politics, as after the previous municipal elections. In such a case it will take a while before those outside the inner circles know what was negotiated.

Economic impact of elections and investment opportunities

Economically things can happen much faster. Both the rand, as well as the value of local shares like banks and retailers, might be influenced.

Currently, it seems as if markets prefer the devil we know to the devil we don’t, and as if a comfortable ANC victory will keep most investors happy. This seems likely: the ANC roughly got 70%, 66%, and 62% in the previous few national elections, so another 4% drop to 58% would make for nice mathematics.

But there has been a lot of political turmoil in the last few years, and the faith in President Cyril Ramaphosa on the one hand, or the continued evidence of corruption on the other, can significantly swing this number to either side. Another factor which plays a role is the strength of the opposition. Markets definitely prefer a strong DA, due to their liberal economic policies.

It is seldom wise to make big investment decisions on a whim. But Thursday morning might be a good time, with the help of some predictions, to tweak one’s investments a little.

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