Capital Markets

Home to the world’s 19th-largest exchange, South Africa has mature capital markets able to serve not only the domestic economy but also the wider continent. As global risk appetite for emerging market equities returned from mid-September 2012 following concerted interventions by the world’s central banks, South African equities rallied sharply. Bonds also did well in 2012, despite sovereign rating downgrades from two major ratings agencies and macroeconomic imbalances. Its openness nevertheless has also exposed the economy to the volatilities of emerging market portfolio investment. Significant regulatory reform is on the horizon, including the current iteration of the King Code of Governance Principles as well as the “twin peaks” model of oversight. While downside risks remain, the domestic capital markets provide a clear conduit for portfolio investment to Africa and emerging markets. This chapter contains interviews with Dube Tshidi, Executive Officer, Financial Services Board (FSB); and Stephen van Coller, Chief Executive of CIBW, Absa and Barclays Africa.