J.P.Morgan on Tuesday downgraded South African equities to “neutral” from “overweight,” citing concerns over an economic slowdown and the effectiveness of the country’s policy reforms.
“While South Africa’s investment case on reforms remains an attractive point of departure, it is unlikely to result in meaningful (economic) growth that’s above 2% in the coming two years,” the brokerage said in a note.
Since the aftermath of the 2008-09 global financial crisis, the government of Africa’s most industrialised nation has struggled to deliver economic growth rates high enough to make a dent in inequality and unemployment.
In January, South African Reserve Bank (SARB) Governor Lesetja Kganyago told Reuters in an interview that the region’s economic growth could be close to 2% in 2025.
Last month, South African President Cyril Ramaphosa said his government would launch a second wave of reforms to try to bolster economic growth, by boosting struggling state companies and investing in infrastructure.
But despite improved
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