(Bloomberg) — South African stocks are having their strongest third quarter for 11 years and investors see the gains extending. The FTSE/JSE Africa All Share Index is up around 10% over the three months, notching 13 record closing highs in the process and outpacing a rally in MSCI Inc.’s gauge of emerging-market equities.
China-exposed tech investor Naspers Ltd. has led the advance, soaring as authorities in Beijing take steps to stimulate the economy. Banks have also driven the main index higher, buoyed by optimism that falling interest rates and a market-friendly broad coalition government will boost growth.
“The start of the global interest rate cutting cycle is a welcome relief and we are continuing to find good valuation support for a number of high-quality companies,” said Peter Takaendesa, head of equities at Mergence Investment Managers. The so-called government of national unity, installed after May’s election, has spurred hopes of fixes for the energy and transportation problems that have hobbled Africa’s most-industrialized economy. Meanwhile, the country’s central bank cut rates for the first time since 2020 on Sept.
19 as inflation slows. “Despite strong gains, we see further room for outperformance, aided by front-loading of rate cuts,” Goldman Sachs Group Inc. strategists including Kamakshya Trivedi wrote in a note, referring to the outlook for South African equities.
Investor sentiment is overwhelmingly upbeat. Bank of America Corp.’s Septe.