A Rand Merchant Bank (RMB) survey of almost 300 finance professionals and foreign investors has found that most respondents are completely uncertain as to whether finance minister Pravin Gordhan will stay or be ousted from his post.
They are unanimous, however, that if he does go their businesses will suffer and the rand will weaken substantially.
The survey was conducted online between Thursday afternoon of August 26 and Monday morning of August 29. Of the 296 responses received, 163 were from finance professionals and 133 from other professionals. More than 10% of respondents were foreigners.
Most respondents put the odds of Gordhan staying in office at 50-50. However, the number saying he would probably or definitely go was almost the same as those saying he would probably or definitely stay.
On aggregate, 87% of respondents thought that the Hawks/Gordhan saga was a threat to their business. Roughly 80% of foreign respondents said it was a threat to their business, while most domestic respondents saw it as a "major threat".
"This difference presumably just reflects that foreigners have less riding on SA than do domestic respondents, rather than any difference in their view of the seriousness of the matter," noted RMB. Survey respondents were also almost unanimous that the rand would weaken if Gordhan left office, whether voluntarily or not.
The weighted average response was that the rand would weaken by just over R3 against the dollar. Given that the rand averaged about R14.30/$ during the survey period, the consensus expectation is for a move to R17.30/$ should Gordhan exit.
The survey also solicited a range of comments, none of which necessarily reflects the bank’s views.
"I think the rand is the least of our worries," wrote one respondent. "Businesses will adjust, there are swings and roundabouts to the rand’s weakness. The long-term macro economy and accountability of state organisations to treasury are more worrying.
"The perception of capture of treasury and its independence will hurt foreign investment, as policy will become less consistent and prone to manipulation."