A US election has nailed South African assets all over, with the stock market and bond market rising, and the rand rising at its highest level since the pandemic. The surprises that the voting results yield, like a divided US government, are interpreted by investors as favorable for risk assets, even if they are equal.
The US election did not prove a third panic event of the year, after Covid-19 and the September overvaluation correction, and has an initial turbo boost for the world’s stock markets and a promising fill in the risk assets , such as emerging market stocks, bonds and currencies.
The South African stock market rose sharply, the rand rose above the R16 to the dollar level to R15.51 – its strongest level since the end of February 2020 – and the local bond market experienced an inflow of almost R10 billion.
All of this took place against the backdrop of an election that holds many surprises and a political break after the election that would indicate more. Despite a convincing victory for Joe Biden, President Donald Trump refused to concede and looks like he wants to fight to the bitter end, firing his defense minister and paving the way for the Department of Justice to …