16 SEPTEMBER 2021: The ongoing pandemic continues to wreak havoc on the economy yet there are still bright spots for savvy investors to take advantage of, says an expert at CMTrading.
The COVID-19 epidemic has wreaked havoc on the lives of millions and has devastated global economic development. According to statistics, the virus has slowed global economic growth by as much as 7.6%, and a return of 4.2% - 5.6% is expected by the end of 2021.
There have been a few bright spots, however, especially in forex trading. The South African Rand has recovered more than 10% against the dollar, the world's reserve currency, from this year's intraday lows.
In fact, the Rand has proven resilient against the dollar throughout 2021. Analysts predict that South Africa's currency could gain another 5% in the next 12 months. From financial market trends to factors affecting the economy, Zihaad Israel, CMTrading’s Regional Manager for South Africa, provides insight for traders.
Given the current economy, is it a suitable time to invest?
"Following last year's disaster, South Africa’s economy is on course to expand at its highest rate in a decade, up from a 7% drop last year. In this assessment, we forecast a resumption of 4% growth by 2021.
“South Africa’s government has the chance to make tough policy decisions in an atmosphere where land reform is beneficial to the country's prosperity. This may aid in major advances as well as boost confidence in the country's future as it faces upheaval. As the threat of COVID-19 grows, it will be critical to seize this opportunity and lay the groundwork for future development.”
What drives South Africa’s investment appeal?
“South Africa, in comparison to other African countries, has strong potential for tourism and tech growth. The government's objective of obtaining $100 billion in foreign direct investment by 2023 is driving this trend.
“The majority of the increase in recent years has been attributed to intercompany finance and stock inflows. Beijing Automotive Industry Holding, BMW, Toyota, Nissan, and Mainstream Renewable Energy have all made significant investments in recent years.”
What areas of investment should traders be looking for?
“The financial, mining, manufacturing, transportation and retail sectors receive most of the local investment. The country has many attractive assets for investors, especially in the tourism sector as well as mobile money solutions.
“Despite the passage of the Protection of Investment Act in December 2015, which strengthens legal guarantees for foreign investors, the investment potential is limited by legal ambiguities that deter international investors.”
Indeed, while COVID has had a negative impact on many economies – South Africa certainly being no exception – for those with an astute understanding of online trading, able to decipher reliable trading signals, there may be hope on the horizon, if they stay armed with a touch of perspective and know-how.
For more information on CMTrading, visit their official website at www.cmtrading.com or call +27105008026, and one of their friendly staff will assist you.
CMTrading is the brand name of Global Capital Markets Trading Ltd (A Seychelles company, company no. 104785)