Here’s how markets are reacting to the ConCourt judgement against Zuma

The markets have been closely following the recent events in South Africa, particularly the Constitutional Court ruling against former President Jacob Zuma. Joining CNBC Africa for a conversation on the impact of these developments on the market were Makwe Masilela, Chief Investment Officer at Makwe Fund Managers, and Johann Els, Chief Economist at Old Mutual Investment Group. The session saw the RAND weakening significantly while the JSE strengthened. Masilela attributed this market movement to a combination of global economic recovery hopes and local circumstances. Despite concerns about the Delta variant, markets have been buoyed by positive economic data from the eurozone and the US, as well as infrastructure spending plans. The local market, particularly the industrial sector, has also shown strength. Masilela noted that the impact of Zuma's sentencing on the market was limited, with the RAND remaining relatively stable. On the other hand, Els emphasized the significance of the rule of law in investor perception, highlighting recent policy reforms and the court's decision as positive signals for South Africa's economic outlook. He expressed optimism about improving foreign inflows as investors gain confidence in the country's growth prospects and fiscal management. The market also witnessed a rally in retail shares, signaling renewed interest in the sector. Masilela pointed to recoveries from previous losses and the relative valuation of local retailers as factors driving this trend. However, the Reserve Bank's quarterly bulletin revealed a decline in foreign inflows, partly due to global market conditions and investor sentiment. Looking ahead, Els highlighted the importance of continued policy direction and global economic factors in shaping investor behavior. While caution remains due to potential political uncertainties, Masilela emphasized the importance of investor confidence and the resilience of South Africa's market. Despite lingering political divisions within the ANC, Els suggested that Zuma's influence within the party may be waning, paving the way for policy continuity and economic reforms. Overall, the market reaction to recent events reflects a blend of domestic and international factors shaping investor sentiment in South Africa.