London - Investors have been roiled by President Jacob Zuma's threat to fire his finance minister.
The rand sank by almost 3% and yields on the country's benchmark 10-year bond jumped by as much as 30 basis points on Tuesday after Bloomberg News reported that Zuma had told allies he planned to fire Pravin Gordhan. But, within the course of the morning, investors were starting to pare those losses.
That optimism looks premature. If Zuma fires Gordhan, investors will take it negatively: the finance minister had become the bellwether for South Africa's openness to overseas money. If he gets a stay of execution, investors will still be concerned that internal political conflict could jeopardise their rights in the country.