Markets not bothered by Zuma

By Staff Writer
Markets not bothered by Zuma

Yesterday the National Prosecuting Authority decided to drop the charges of corruption against African National Congress President Jacob Zuma.

There was a lot of comment about this ranging from wild hair tearing to wild jubilation.

The fact of the matter is though that the markets did not even respond.

The Times came in with the headline 'Markets shrug off Zuma decision'.

Jacob Zuma is widely expected to become the next State President of the Republic of South Africa.

The markets seem to have accepted this.

There was a lot of conjecture that a president with corruption charges hanging over his head would be damaging to the economy. But Zuma has done his rounds of the business people, he has spun the lines that they want to hear and they have apparently accepted him.

Having a corrupt head of state is not that an unusual thing.

The French kept Jacques Chirac on for ages.

He even changed the law so that he could not get prosecuted.

And don't forget that it was a French company that is implicated in the corruption scandal.

The bare fact is that the corruption amounts that were allegedly paid have already been priced in, they are not a risk, so the markets don't need to panic, the pay off if it was paid off has already been paid.

The other factors are that regardless of what Zuma may or may not have done there are a number of good things going for South Africa at the moment.

The economy is one of the strongest in the world right now, we are still in a growth phase, the 2010 World Cup is coming and infrastructure development is booming.

The Mail and Guardian reports that Trevor Manuel is positive about the economic bust and believes that it will usher in an era of prosperity for the developing world.

The article quoted him as saying 'There is also an opportunity now to re-shape the international financial and developmental architecture to bring about both greater transparency and better resource flows to support the developing world'.

Business Day noted that the 'Rand (is) at (a) six-month high as investors pile in'.

The rand has been boosted by 7% in the last week.

Fin24 wrote that 'Consumers breathe easier' following the effects of the interest rate decreases, and that the economic stress index wasn't looking as, well, stressful as it was at the end of last year.

There are a number of feel good factors at play here, which have all probably fed into the reaction to the Zuma affair.

The sun is peeking out from behind the clouds and Zuma has indicated that he will be a one term President only, so don't pack for Perth (unless you really want to go live with that lot) get your self a savings account and look forward to your end of year holidays, the world is not ending!

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