“Thank you so much for making your "Markets now" report available via audio to your subscribers overseas. Living here in South Africa it was much appreciated. Speaking of which conditions for investment here have in my view deteriorated since I last wrote .. This country and India both had general elections in May and since then the divergent trends could not be more stark. India having chosen a business friendly path under a new leader while South Africa, with a largely uneducated voter base, has chosen more of the same. Structural and current account deficits are widening alarmingly now and governance is, I regret to say, on a downward track. Just the other day we had the spectacle of the Deputy defence minister, no less, accusing the Public Protector of being a CIA spy because of her blistering, evidence driven account of the corruption and wrongdoing over Jacob Zumas palace at Nklanda. A remark not going to be unnoticed in the US, I think. The lady concerned happens to be one of the very few people of influence here who has total integrity and honesty. South Africa, I fear, for some years to come is likely to be a serial underperformer on the International stage.”

David Fuller's view

You are most welcome, and I hope you and other subscribers also saw the accompanying PowerPoint that can be viewed while listening to the Audio discussing the headline points and charts.  It probably works best with Google Chrome.

‘Governance Is Everything’, as I have repeated over the decades and Narendra Modi also has a government majority, giving him a real chance to create some business savvy order out of previous chaos for India, although the challenge is considerable.  

I am sorry to hear that governance is on a downward track in South Africa and I do not question your judgement.  However, most of us feel that we have plenty of reasons to be critical of our own governments, not least because we have an on location view of the problems.  The international investment community may reach a somewhat different conclusion, particularly if they are comparing a country either to its neighbours or what had gone on during the previous administration. 

Additionally, investors who have been driving the SA All Share Index (JALSH) higher are buying some well managed companies, not the South African economy.  Your stock market has had a good run but remains in form, assuming it can continue to consolidate above 50,000.  I would not be too worried unless it accelerated sharply higher relative to the MA, and/or broke beneath the MA for more than a day or two.