Following an election, there’s always a bit of scepticism surrounding the future of the economy.

A potentially unstable government isn’t helping things along, either.

There is hope, though.

The nation’s stocks have attractive valuations, according to Morgan Stanley strategists Marina Zavolock and Regiane Yamanari, reports BusinessTech.

“Investors will now view South African equities as a ‘show me’ story around economic reform implementation, given investors’ initial optimism and then disappointment on South Africa’s recovery last year and the slower than expected pace of reform implementation in Brazil more recently,” Morgan Stanley said in a note to clients dated 14 May.

A lot has been done to improve the regulatory and governance foundation laying the groundwork for increased economic reform moving forward.

Morgan Stanley predicts that the election results will lift up South Africa’s macroeconomic and reform prospects. They reckon the following companies as best placed to expand their margins over the next two years:

• FirstRand;
• Capitec Bank;
• Standard Bank;
• Tiger Brands;
• Pick n Pay;
• Dis-Chem Pharmacies;
• Anglo American;
• Glencore.

So if you’re keen to invest, you might want to look into the above. That’s according to Morgan Stanley, of course, not us.

There’s no time like the present to expand that portfolio.

[source:businesstech]