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South African stocks rose even higher on Monday as investors applauded optimism about the outlook under Joe Biden’s US presidency.
Democratic candidate Biden was elected the 46th president of the United States of America over the weekend, beating incumbent Republican Donald Trump in the presidential election. Biden got 50.6% of the vote, and Trump got 47.7%.
The FTSE / JSE Africa All Shares Index rose as much as 1.4% to the highest intraday level since August 27, and was up more than 1% in mid-morning trading as risk sentiment helped boost 101 of the 141 listed companies. , Bloomberg reported.
“Joe Biden’s victory saw risk assets gain momentum, with markets betting on greater stability, while a divided Congress will still guarantee low interest rates for longer and possible fiscal stimulus,” said Bianca Botes, Director Executive of Peregrine Treasury Solutions.
Investec chief economist Annabel Bishop said in a note last week that the leader of the Democrats is expected to bring greater controls to flatten the Covid-19 curve and generate a sustainable economic recovery, creating positive market sentiment.
“The Democratic Party is expected to undo a number of policies implemented by Trump, including harsher ones on immigration, the return to the global climate accords (and in particular the reinstatement of the Paris Agreement) and the improvement of the policy. outside the United States, “Bishop said. .
“A Biden presidency is expected to lay the foundation for a long-term, sustainable future for the US and global economies, as well as providing as much fiscal stimulus as possible to ensure a sustainable economic recovery in the short and medium term, free of politicking.” .
“A Biden presidency with a Republican Senate is probably the best possible scenario for emerging market assets and if this result holds, it should provide a very strong backdrop for the asset class,” Eric Stein, chief investment officer Eaton Vance fixed income in Boston told Bloomberg. “Biden should have a less confrontational approach to China and other countries than Trump.”
He reported that Biden’s biggest change from Trump will likely be his focus on allies. While Trump has targeted traditional American partners such as Japan, South Korea and Europe for taking advantage of defense commitments and cheating on trade, Biden has vowed to work closely with them to force Chinese cooperation on priorities ranging from the commercial ties with Hong Kong up to 5G technology. Bloomberg said.
I’m not going in silence
Nedbank warned in a note that Trump’s legal team has filed lawsuits challenging the counting of votes in some of the states, and Trump rejected the election result saying the ballots were “fraudulent, manufactured or cast by ineligible voters or deceased “.
Tellingly, Bloomberg reported that the Trump-appointed General Services Administration administrator has so far not formally acknowledged that Biden won the election, as required by the 57-year Presidential Transition Act.
Nedbank noted that in his first speech as president-elect, Biden called for the unity and healing of the nation. Democrats control the House, but no candidate managed to get the 50% required by electoral law to control the Senate.
“The second round elections will be held in January, just before the new Senate meets. If the Republicans retain control of the Senate, there is likely to be a confrontation between the two sides when it comes to certain economic policy issues, ”he warned.
The changing of the guard at the White House has also pushed the rand to its best in eight months, with predictions that it could get even stronger.
Rand 15.57 this is fair value. Expensive is around 15.20. Could go there
– Wayne McCurrie (@WayneMcCurrie) November 9, 2020
South African President Cyril Ramaphosa took to social media to congratulate President-elect and Vice-President-elect Kamala Harris.
“We look forward to working with you and deepening our ties of friendship and cooperation,” the president said.
We congratulate the president-elect @Joe Biden and vice president @KamalaHarris and the American people on their choice. We look forward to working with you and deepening our ties of friendship and cooperation. pic.twitter.com/aajOxmL8KI
– Cyril Ramaphosa 🇿🇦 #StaySafe (@CyrilRamaphosa) November 7, 2020
The Nelson Mandela Foundation was less than complementary to the outgoing Trump, calling his defeat a relief.
“It is with a sense of relief that we have seen President Donald Trump defeated in the US presidential elections. Like many around the world, we celebrate the fact that we will not have to watch him undermine democratic institutions and hear him discredit the world’s most powerful office for another four years.
“Now begins America’s daunting task of undoing the deepening of racism, sexism, xenophobia, afrophobia and many other intersecting vectors of prejudice and hatred,” the foundation said in a press release over the weekend.
The foundation congratulated Biden and Harris on their election campaign. “We hope to see the White House filled with a leadership team that understands the central importance of human dignity. We are especially pleased that Mz Harris is the first woman in the history of the United States to serve as Vice President.
“We wish Mr. Biden and Ms. Harris the best in what will be a difficult transition. We call on Mr. Trump to embrace the democratic process, support the transition, and begin contributing to the healing of a deeply fractured society. As Nelson Mandela used to say, a good leader knows when to resign. And how to do it properly. It is not too late for Trump to embrace dignity, for himself and for others. “
Read: Trump advisers view legal challenges for Biden to win as futile
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