The South African Rand has had an interesting year as shown below. The market movements has been associated with President Jacob Zuma who has faced multiple no confidence votes for the massive corruption in his government. The main corruption case related to his association with the wealthy Gupta family who were accused of State Capture; where they influenced government tenders.

This week, South Africans will know who the next leader of ANC will be. The ANC leader will automatically be the next president.

The seat will be taken by either Cyril Ramaphosa or Dlamini Zuma. The latter is the current vice president and the latter is the ex-wife of Jacob Zuma.

Investors confidence lies on Ramaphosa, who was Mandela’s choice for the party leadership. After his exit in politics, he founded Shanduka Group, a leading conglomerate in Africa with stakes in major corporations like Standard Bank. He speaks the language of investors and though he has served under Zuma, he has not been accused in any corruption case.

Dlamini is the ex-wife of Zuma and the mother of two of his children who have been prominently named in the corruption cases. She has been a cabinet minister and the chair of African Union. Her win could be read by investors as status quo.

As shown below, the Rand gained last week as hopes of a Ramaphosa win became public after the initial provincial voting.

This week, I expect the Rand to continue its rally which may see it going to below $13 if Ramaphosa wins. Under this scenario, the pair may fall to 12.72 a three-month low and then proceed to 12.31.

In the unlikely event that the delegates settle on Dlamini Zuma, a major reversal could happen, forcing the pair to move up to a high of 16.09 which may head to 17.85.

My bet is however on a Ramaphosa win which may lead to the former scenario.