According to Bloomberg’s analysis on Monday, the South African economy under President Cyril Ramaphosa is starting to become objectively more attractive to foreign investors.
Bloomberg has called the rand a “resurgent currency” that, along with more foreign investments, have lifted South African government bonds to suddenly offering the best return on investment among emerging market countries.
“Rand-denominated government debt has returned 6.5% in dollar terms this month, the best performance out of 19 major emerging markets tracked by Bloomberg Barclays indexes. The average for developed-nation peers was less than 0.1%.”
It said that in the last quarter South Africa was truly suffering, losing 17% in a massive emerging market selloff.
Ramaphosa has already secured more than $35 billion in foreign investment as he tries to make good on a pledge to bring $100 billion into the country as an economic shot in the arm.
He secured well-publicised and well-received deals with Saudi Arabia, the United Arab Emirates and China.
Foreigners have been net buyers of government bonds for the past three weeks, reversing the record selloff of the past three months.
The rand weakened slightly against the dollar in early trade on Monday but has been largely stable over the past weeks.
At the time of publishing, it was trading at R13.15 to the dollar, effectively the same as its 5pm close of R13.16 on Friday.