20180326-法国巴黎银行-South_Africa__Investment_thesis_9页_423kb

报告摘要

South Africa Investment Thesis Summary

Core Content

This document outlines the investment outlook for South Africa, focusing on the potential for economic recovery and increased investment activity, particularly in the private sector and foreign direct investment (FDI). It is authored by Jeffrey Schultz, a Senior Economist at BNP Paribas South Africa.

Key Points

1. Credit Ratings and Political Stability

Credit ratings risks are expected to be resolved for at least the next 12-18 months.
A more stable domestic political and policy environment is anticipated to support investment recovery.

2. Private Investment Recovery

Private investment is projected to bounce back in 2018, driven by a reduction in corporate savings glut and improved political risk.
A virtuous cycle of investment, confidence, and growth is anticipated if policy actions in mining and land reform are managed effectively.

3. Foreign Direct Investment (FDI)

FDI outflows are likely to have peaked in 2017, indicating a potential return to modest net FDI inflows.
There is anecdotal evidence suggesting a slow return of FDI to South Africa, which may contribute to broader investment stability.

4. Inventory and Investment Growth

Fixed investment and real inventory growth are expected to increase in 2018 due to improved economic conditions.
This growth is critical to raising potential GDP and improving the weak potential growth rate of about 1.2%.

5. Corporate and Household Savings

Corporates continue to hold a large amount of savings, while households were net savers in 2017 for the first time since 2005.
This shift may support potential investment activity in the future.

6. Investment and Productivity

Higher fixed investment and productivity gains are essential for sustainable economic growth.
The capital stock needs to grow alongside productivity to increase potential GDP.

Charts Summary

Chart 1: Investment and inventories are expected to turn the corner in 2018 as the domestic environment stabilises.
Chart 2: The PMI leading indicator has reached multi-year highs, suggesting improvement in the supply side of the economy.
Chart 3: Private-sector investment still lags behind government investment, but is expected to pick up the slack from 2018 onwards.
Chart 4: Gross fixed capital formation by type shows that transport equipment and residential/commercial building could see increased investment.
Chart 5: The corporate savings glut is likely to be drawn down, supporting future investment.
Chart 6: A virtuous cycle of investment, confidence, and growth is possible, though policy actions in mining and land reform remain a risk.
Chart 7: Net FDI and broader investment are expected to stabilise due to reduced outflows and a more stable political climate.
Chart 8: A sell-down of foreign equity by a major local corporation is the first sign of improvement in FDI fortunes.
Chart 9: Higher capital stock and productivity improvements are necessary to increase potential GDP.

Legal and Regulatory Information

The document is a marketing communication and not investment research.
It is non-independent research and may be subject to conflicts of interest.
Legal Disclaimer: The information provided is not investment advice, and users should not rely on it for making investment decisions.
Confidentiality: The document is intended for specific recipients and may not be distributed without prior consent.
Performance Data: Any performance data may be simulated and not indicative of future results.
Regulatory Information: The document includes regulatory disclosures for various countries, including the UK, France, Germany, Belgium, Ireland, Italy, Netherlands, and Portugal, highlighting the authorizations and supervisions by relevant financial authorities.

Conclusion

South Africa's investment thesis is becoming more compelling as credit rating risks ease and political stability improves. Private investment is expected to recover in 2018, supported by lower corporate savings and improved confidence. FDI outflows are likely to stabilise, with potential for modest inflows. The economy's potential growth depends on increased fixed investment and productivity gains. However, policy actions in key sectors like mining and land reform remain a critical watch.