Nomura concerned Zuma will use 'scorched earth' strategy

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President Jacob Zuma with Finance Minister Pravin Gordhan in better times in 2009. (File, AFP)
President Jacob Zuma with Finance Minister Pravin Gordhan in better times in 2009. (File, AFP)

Cape Town – President Jacob Zuma is currently in a weakened state with only a “scorched earth” strategy remaining open to him, said economist Peter Attard Montalto of Nomura in a company note on Monday.

According to Montalto, the situation in South Africa is “ultimately unpredictable”, following events last week when Finance Minister Pravin Gordhan was charged with fraud and theft, the delayed release of the public protector's report on state capture, which is subject to an interdict process, as well as Gordhan's court motion on Friday, requesting the court to rule he is not obliged to intervene in the Gupta bank account issue.

Montalto said the unpredictable environment and the market’s concern are partly reflected in higher bond yields, although investors are largely steering clear of the rand at the moment “after being burned by volatility last week”.

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