Trading Volumes Dwindle as South Africa’s Policy Risks Mount – by Colleen Goko (Bloomberg News – August 8, 2018)

Trading volumes on Africa’s biggest stock exchange have dwindled amid uncertainty about the ruling party’s policies on land and mining ahead of elections set for next year.

The average daily volume of shares traded on the Johannesburg Stock Exchange in the past month fell to 247 million on Wednesday, from as high as 408 million in January, according to data compiled by Bloomberg. On Monday, only 151 million shares changed hands, the lowest number since Jan. 2, when South Africa was in the midst of annual summer holidays.

While the drop-off may be ascribed partly to global factors including the trade war between China and the U.S. and the withdrawal of monetary stimulus by developed-nation central banks, local political developments are also to blame, according to exchange operator JSE Ltd.

The euphoria that greeted Cyril Ramaphosa’s election as leader of the African National Congress in December, which elevated trading volumes in the first quarter, has dissipated, while uncertainty around land reform and mining ownership are rattling investors.

“There is careful scrutiny around the country around our policy discussions and uncertainty as we go into elections next year,” Donna Nemmer, director of capital markets at the JSE, said in an emailed response to questions.

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