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South Africa
SEB MERCHANT BANKING – COUNTRY RISK ANALYSIS April 14, 2008
 
important
 
your attention is drawn to the statement on the back cover of this report which affects your rights.
Analyst: Jenny Nordgren. Tel 
 
: +46 8 
 
763 96 05. E-mail 
 
: jenny.nordgren@seb.se Political and economic uncertainty has increased. However, the economy benefits from an improved fiscal position, a flexible exchange rate and a strong track record of managing economic shocks.
Country Risk Analysis
oçÄìëí=Äìí=ãçÇÉê~íáåÖ=ÖêçïíÜ
K=qÜÉ=ÉÅçåçãó=Ü~ë=Éñé~åÇÉÇ=êçÄìëíäó=ÇìêáåÖ=íÜÉ=ä~ëí=Ñçìê=óÉ~êë=ïáíÜ=~å=~îÉê~ÖÉ=dam=ÖêçïíÜ=çÑ=R=B=ÇêáîÉå=ã~áåäó=Äó=~=Åçåëìãéíáçå= Äççã=ëéìêêÉÇ=Äó=ê~éáÇ=ÅêÉÇáí=Éñé~åëáçåK=få=OMMTI=ÜçïÉîÉêI=~=ëìêÖÉ=áå=áåÑê~ëíêìÅíìêÉ=áåîÉëíãÉåíë=J=ã~áåäó=éìÄäáÅ=Ó=ëí~êíÉÇ=íç=êÉéä~ÅÉ=éêáî~íÉ=Åçåëìãéíáçå=~ë=íÜÉ=ã~áå=ÇêáîÉê=çÑ=ÉÅçåçãáÅ=ÖêçïíÜ=~ë=ÜçìëÉÜçäÇë=ïÉêÉ=Üáí=Äó=íáÖÜíÉê=ãçåÉí~êó=éçäáÅóK=qÜÉ=åÉÉÇ=íç=áãéêçîÉ=éççê=áåÑê~ëíêìÅíìêÉ=~åÇ=éêÉé~êÉ=pçìíÜ=^ÑêáÅ~=Ñçê=íÜÉ=OMNM=cfc^=tçêäÇ=`ìé=ëÜçìäÇ=ÅçåíáåìÉ=íç=ëéìê=áåîÉëíãÉåí=ÇÉã~åÇ=áå=íÜÉ=åÉñí=ÑÉï=óÉ~êëI=Äìí=åçí=ÉåçìÖÜ=íç=ëí~îÉ=çÑÑ=~=ëäçïÇçïå=áå=ÖêçïíÜ=íç=PJQ=B=íÜáë=óÉ~ê=ÇìÉ=íç=áåíÉêÉëí=ê~íÉ=ëéáâÉë=ëáåÅÉ=ãáÇJOMMSI=~=ïÉ~âÉê=ÖäçÄ~ä=ÉÅçåçãó=~åÇ=ÉäÉÅíêáÅáíó=ëÜçêí~ÖÉë=ÜìêíáåÖ=íÜÉ=ãáåáåÖ=ëÉÅíçê=áå=é~êíáÅìä~êK==
mêìÇÉåí=ÉÅçåçãáÅ=éçäáÅÉë
K=qÜÉ=ÑáëÅ~ä=éçëáíáçå=Ü~ë=Öê~Çì~ääó=áãéêçîÉÇ=~åÇ=êÉëìäíÉÇ=áå=~=ëíÉ~Çó=êÉÇìÅíáçå=çÑ=éìÄäáÅ=ÇÉÄí=íç=dam=íç=ÄÉäçï=PM=BK=i~êÖÉ=êÉîÉåìÉ=Ö~áåë=Ñêçã=êçÄìëí=ÉÅçåçãáÅ=ÖêçïíÜ=Ü~îÉ=~ääçïÉÇ=íÜÉ=ÖçîÉêåãÉåí=íç=áåÅêÉ~ëÉ=ëéÉåÇáåÖ=çå=áåÑê~ëíêìÅíìêÉ=~åÇ=ëçÅá~ä=ëÉêîáÅÉë=ïÜáäÉ=âÉÉéáåÖ=íÜÉ=ÑáëÅ~ä=éçëáíáçå=áå=~=ëã~ää=ëìêéäìëK=qÜÉ=ÄìÇÖÉí=áë=ÉñéÉÅíÉÇ=íç=ÅçåíáåìÉ=íç=ëÜçï=~=ëã~ää=ëìêéäìë=çîÉê=íÜÉ=ãÉÇáìãJíÉêã= ÄìÇÖÉí~êó=ëíê~íÉÖó=éÉêáçÇ=ìé=íç=ÑáëÅ~ä=óÉ~ê=OMNMLNN=ÉåÇáåÖ=j~êÅÜK=qÜÉ=`Éåíê~ä=_~åâ=Ü~ë=êÉëéçåÇÉÇ=íç=íÜÉ=ÇÉã~åÇ=Äççã=~åÇ=êáëáåÖ=ÜçìëÉÜçäÇ=áåÇÉÄíÉÇåÉëë=E~äãçëí=UM=B=çÑ=Çáëéçë~ÄäÉ=áåÅçãÉF=Äó=ê~áëáåÖ=íÜÉ=êÉéç=ê~íÉ=ëáåÅÉ=ãáÇJOMMS=Ñêçã=T=B=íç=NNKR=B=~åÇ=áåíêçÇìÅáåÖ=íáÖÜíÉê=äÉåÇáåÖ=ëí~åÇ~êÇë=áå=ãáÇJOMMT=Ek~íáçå~ä=`êÉÇáí=^ÅíFK=^ë=~=êÉëìäíI=íÜÉ=ëíáää=ê~éáÇ=ÅêÉÇáí=Éñé~åëáçå=ãçÇÉê~íÉÇ=ëäáÖÜíäó=ÇìêáåÖ=Ñ~ää=OMMT=íç=~=Äáí=ãçêÉ=íÜ~å=OM=B=éK~K=ïÜáäÉ=íÜÉ=áåÑä~íáçå=ê~íÉ=ÅçåíáåìÉÇ=íç=êáëÉ=íç=ãçêÉ=íÜ~å=V=B=áå=cÉÄêì~êóI=é~êíäó=ÇìÉ=íç=ëìêÖáåÖ=ÑççÇ=~åÇ=ÉåÉêÖó=éêáÅÉë=~åÇ=íÜÉ=ÉñÅÜ~åÖÉ=ê~íÉ=ÇÉéêÉÅá~íáçåK===
táÇÉåáåÖ=ÅìêêÉåí=~ÅÅçìåí=ÇÉÑáÅáí
K=píêçåÖ=ÇçãÉëíáÅ=ÇÉã~åÇ=~åÇ=ÜáÖÜ=çáä=éêáÅÉë=ïáÇÉåÉÇ=íÜÉ=ÅìêêÉåí=~ÅÅçìåí=ÇÉÑáÅáí=íç=~=êÉÅçêÇ=TKP=B=áå=OMMT=ÇÉëéáíÉ=ëç~êáåÖ=ÅçããçÇáíó=éêáÅÉëK=píêçåÖ=éçêíÑçäáç=áåÑäçïë=Ü~îÉ=ìåíáä=êÉÅÉåíäó=ÜÉäéÉÇ=Ñáå~åÅÉ=íÜÉ=ÇÉÑáÅáí=~åÇ=ÉîÉå=~ääçïÉÇ=~=ÑìêíÜÉê= ÄìáäÇJìé=çÑ=áåíÉêå~íáçå~ä=êÉëÉêîÉë=íç=ãçêÉ=íÜ~å=rpa=PM=ÄáääáçåK=páåÅÉ=ä~íÉ=OMMTI=ÜçïÉîÉêI=éçêíÑçäáç=áåÑäçïë=Ü~îÉ=í~áäÉÇ=çÑÑ=éÉêÜ~éë=ÇìÉ=íç=íÜÉ=ÖäçÄ~ä=ã~êâÉí=íìêãçáä=~åÇ=áåÅêÉ~ëÉÇ=éçäáíáÅ~ä=ìåÅÉêí~áåíó=ïÜáäÉ=caf=EÑçêÉáÖå=ÇáêÉÅí=áåîÉëíãÉåíF=Ñäçïë=áåÅêÉ~ëÉÇK=bñíÉêå~ä=ÇÉÄí=íç=dam=áë=êÉä~íáîÉäó=äçï=~í=ÄÉäçï=PM=B= Äìí=áåÅêÉ~ëáåÖK=qÜÉ=Åçãéçëáíáçå=áë=~äëç=ÅÜ~åÖáåÖ=ê~éáÇäó=íçï~êÇë=~=ãìÅÜ=ä~êÖÉê=
 
External Balance
Source: Reuters EcoWin 
02 03 04 05 06 07
   Z   A   R    (   b   i   l   l   i  o  n  s   )
-50-40-30-20-1001020304050
CurrentaccountPortfolio investment, netFDI, net
 
SEB Merchant Banking Country Risk Analysis April, 2008
 
2
ëÜ~êÉ=çÑ=ëÜçêíJíÉêã=ÇÉÄíI=åçï=~ÅÅçìåíáåÖ=Ñçê=ãçêÉ=íÜ~å=RU=B=çÑ=íÜÉ=íçí~ä=ìé=Ñêçã=äÉëë=íÜ~å=~=íÜáêÇ=áå=OMMRK==i~êÖÉ=ÑçêÉáÖå=çïåÉêëÜáé=çÑ=íÜÉ=ëíçÅâ=ã~êâÉí=ENU=BF=~åÇ=åçå=êÉëáÇÉåíÛë=ÜçäÇáåÖë=çÑ=äçÅ~ä=ÅìêêÉåÅó=ÇÉÄí=EQM=B=çÑ=ÉñíÉêå~ä=ÇÉÄíF=ã~âÉ=íÜÉ=Ä~ä~åÅÉ=çÑ=é~óãÉåíë=îìäåÉê~ÄäÉ=íç=ÖäçÄ~ä=áåîÉëíçê=ÅçåÑáÇÉåÅÉK==
fåÅêÉ~ëÉÇ=éçäáíáÅ~ä=ìåÅÉêí~áåíóK=
få=ä~ëí=aÉÅÉãÄÉêI=g~ÅçÄ=wìã~=ï~ë=ÉäÉÅíÉÇ=íÜÉ=åÉï=äÉ~ÇÉê=çÑ=^ÑêáÅ~å=k~íáçå~ä=`çåÖêÉëë=E^k`F=ÇÉÑÉ~íáåÖ=mêÉëáÇÉåí=jÄÉâá=Äó=~=ïáÇÉ=ã~êÖáåK=qÜáë=Ü~ë=ê~áëÉÇ=ÅçåÅÉêåë=~Äçìí=íïç=ÅÉåíêÉë=çÑ=éçïÉêÓ=áå=íÜÉ=ÖçîÉêåãÉåí=~åÇ=íÜÉ=^k`=Ó=ïÜáÅÜ=ã~ó=~ÑÑÉÅí=íÜÉ=ÉÑÑÉÅíáîÉåÉëë=çÑ=íÜÉ=ÖçîÉêåãÉåí=~åÇ=íÜÉ=ÇáêÉÅíáçå=çÑ=ÉÅçåçãáÅ=éçäáÅáÉë=áå=íÜÉ=êìå=ìé=íç=íÜÉ=OMMV=ÖÉåÉê~ä=ÉäÉÅíáçåëK=pçãÉ=ÑÉ~ê=íÜ~í=~=wìã~=éêÉëáÇÉåÅó=ÅçìäÇ=äÉ~Ç=íç=ãçêÉ=äÉÑíJïáåÖ=éçäáÅáÉë=çïáåÖ=áå=é~êí=íç=íÜÉ=ëìééçêí=ÜÉ=Éåàçóë=Ñêçã=íÜÉ=`çåÖêÉëë=çÑ=pçìíÜ=^ÑêáÅ~å=qê~ÇÉ=råáçåë=E`lp^qrF=~åÇ=íÜÉ=pçìíÜ=^ÑêáÅ~å=`çããìåáëí=m~êíó=ÇÉëéáíÉ=êÉéÉ~íÉÇ=ëí~íÉãÉåíë=Äó=wìã~=íÜ~í=íÜÉ=Äêç~Ç=íÜêìëí=çÑ=ÉÅçåçãáÅ=éçäáÅáÉë=ïáää=íÜÉ=ëí~ó=íÜÉ=ë~ãÉK=eçïÉîÉêI=wìã~=áë=Ñ~ÅáåÖ=Åçêêìéíáçå=ÅÜ~êÖÉë=áå=~å=ìéÅçãáåÖ=íêá~ä=áå=^ìÖìëí=ïÜáÅÜ=ÅçìäÇ=éêÉîÉåí=Üáã=Ñêçã=êìååáåÖ=Ñçê=çÑÑáÅÉK=få=~=äçåÖÉêJíÉêã=éÉêëéÉÅíáîÉI=pçìíÜ=^ÑêáÅ~=ÅçåíáåìÉë=íç=Ñ~ÅÉ=ã~àçê=ëçÅáçÉÅçåçãáÅ=ÅÜ~ääÉåÖÉëK==
bñÅÜ~åÖÉ=ê~íÉ=îçä~íáäáíó=~åÇ=êÉëáäáÉåÅÉ
K=mçäáíáÅ~ä=ìåÅÉêí~áåíóI=ïáÇÉåáåÖ=ÅìêêÉåí=~ÅÅçìåí=ÇÉÑáÅáí=~åÇ=ïÉ~âÉê=ÖêçïíÜ=éêçëéÉÅíë=Ü~îÉ=éìí=Ççïåï~êÇ=éêÉëëìêÉ=çå=íÜÉ=ÉñÅÜ~åÖÉ=ê~íÉK=qÜÉ=ê~åÇ=Ü~ë=ÇÉéêÉÅá~íÉÇ=~êçìåÇ=NR=B=~Ö~áåëí=íÜÉ=rpa=íÜáë=óÉ~ê=~åÇ=íÜÉ=ÉñÅÜ~åÖÉ=ê~íÉ=áë=äáâÉäó=íç=êÉã~áå=îçä~íáäÉK=vÉíI=pçìíÜ=^ÑêáÅ~=Ü~ë=éêçîÉÇ=êÉëáäáÉåí=íç=ëÉîÉê~ä=ëÜçÅâë=áå=íÜÉ=é~ëí=~åÇ=~ÅÅçêÇáåÖ=íç=çìê=êáëâ=ëÅÉå~êáç=~å~äóëáë=íÜÉ=ÉÅçåçãó=ëÜçïë=~=êÉä~íáîÉ=ÜáÖÜ=ÇÉÖêÉÉ=çÑ=êÉëáäáÉåÅÉ=ÉîÉå=áÑ=íÜÉ=ìåéêÉÅÉÇÉåíÉÇ=êÉÅÉåí=ïáÇÉåáåÖ=çÑ=íÜÉ=ÅìêêÉåí=~ÅÅçìåí=ÇÉÑáÅáí=áåÅêÉ~ëÉë=íÜÉ=ìåÅÉêí~áåíó=çÑ=êÉëìäíë=Ä~ëÉÇ=çå=ÜáëíçêáÅ=Ç~í~K=låÉ=çÑ=íÜÉ=ê~íáåÖ=~ÖÉåÅáÉëÛ=Ü~ë=àìëí=ëí~íÉÇ=íÜ~í=íÜÉáê=ê~íáåÖ=ÜçäÇë=Ñçê=~=ÇÉéêÉÅá~íáçå=çÑ=ãçêÉ=íÜ~å=OM=B=~Ö~áåëí=íÜÉ=rpaK=JJ
˘
JJ=
 ^ë=êÉÖ~êÇë=íÜÉ=ÉÅçåçãóI=êçÄìëí=ÉÅçåçãáÅ=ÖêçïíÜ=~åÇ=éêìÇÉåí=éçäáÅáÉë=Ü~îÉ=êÉëìäíÉÇ=áå=~å=áãéêçîÉÇ=ÑáëÅ~ä=éçëáíáçåI=~=ÄìáäÇ=ìé=çÑ=ÑçêÉáÖå=êÉëÉêîÉë=~åÇ=ÜÉäéÉÇ=Åçåí~áå=íÜÉ=ÖêçïíÜ=çÑ=ÉñíÉêå~ä=ÇÉÄíK=eçïÉîÉêI=~=ïáÇÉåáåÖ=ÅìêêÉåí=~ÅÅçìåí=ÇÉÑáÅáí=~åÇ=ÜáÖÜ=êÉäá~åÅÉ=çå=éçêíÑçäáç=áåÑäçïë=Ñçê=áíë=Ñáå~åÅáåÖ=ã~âÉë=íÜÉ=ÉÅçåçãó=îìäåÉê~ÄäÉ=íç=~=ëÜáÑí=áå=ÖäçÄ~ä=áåîÉëíçê=ëÉåíáãÉåíK=kÉîÉêíÜÉäÉëëI=~=ÑäÉñáÄäÉ=ÉñÅÜ~åÖÉ=ê~íÉ=~åÇ=~=ëíêçåÖ=íê~Åâ=êÉÅçêÇ=çÑ=ã~å~ÖáåÖ=ÉÅçåçãáÅ=ëÜçÅâë=~êÉ=íÉëíáãçåáÉë=íç=íÜÉ=ÅçìåíêóÛë=êÉëáäáÉåÅÉ=~åÇ=~Ç~éí~ÄáäáíóK=lå=íÜÉ=éçäáíáÅ~ä=ëáÇÉI=éçäáíáÅ~ä=ìåÅÉêí~áåíó=êÉä~íÉÇ=íç=íÜÉ=ÉäÉÅíáçå=çÑ=wìã~=~ë=íÜÉ=åÉï=^k`JäÉ~ÇÉê=~åÇ=äçåÖJíÉêã=ëçÅáçÉÅçåçãáÅ=éêÉëëìêÉ=ïÉáÖÜ=çå=íÜÉ=ê~íáåÖK==
=
hÉó=ÑáÖìêÉë OMMU
mçéìä~íáçå=EãáääáçåëF QVdamLÅ~éáí~=EAF SNQSdam=EÅÜ~åÖÉF QBfåÑä~íáçå=TB`ìêêK^ÅÅK=Ä~ä~åÅÉLdam JTBoÉëÉêîÉëLáãéçêíë=EãçåíÜëF Q_ìÇÖÉí=Ä~ä~åÅÉLdam NBdçîÉêåãÉåí=ÇÉÄíLdam OQB
Graph:
The pentagon shows Turkey's risk worsethan average in all respects including to itstraditional competitor, Brazil, reflecting weakerliquidity, macro balance and absence of event risk.
bñíÉêå~ä=ê~íáåÖëW=
cáíÅÜW===__JLéçëjççÇóDëW=_~P=pCmW==__JLéçë=
 
dê~éÜW
=qÜÉ=éÉåí~Öçå=ëÜçïë=pçìíÜ=^ÑêáÅ~Dë=êáëâ=éêçÑáäÉ=ïÜÉêÉ=áí=ëÅçêÉë=ÄÉííÉê=íÜ~å=~îÉê~ÖÉ=Ñçê=~ää=ÉãÉêÖáåÖ=ã~êâÉíë=çå=êÉëáäáÉåÅÉ=~åÇ=áåÑçêã~íáçå=ïÜáäÉ=áí=ëÅçêÉë=ÄÉäçï=~îÉê~ÖÉ=çå=äáèìáÇáíóI=ã~Åêç= Ä~ä~åÅÉ=~åÇ=~ÄëÅÉåÅÉ=çÑ=ÉîÉåí=êáëâ=J=ã~áåäó=éçäáíáÅ~ä=êáëâK=
bñíÉêå~ä=ê~íáåÖëW=
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eìåÖ~êó=fåÇá~=oìëëá~
-1135791113
ResilienceLiquidityInformationAbsence of eventriskMacro balance
South AfricaAverage EM
How to read the chart? Moving out from the center reduces risk.
=
 
 
SEB Merchant Banking Country Risk Analysis April, 2008
 
3
Key data: 2002 2003 2004 2005 2006 2007 2008 2009
GDP (bill. US$)112168217242258280300320GDP/capita (US$)24003569456650555342575561466524GDP, real (change)3.7%3.1%4.9%5.0%5.4%5.1%3.8%4.3Investments/GDP15%16%17%17%19%21%22%23%Budget deficit/GDP-0.1%-2.2%-2.0%-0.3%0.6%0.7%0.9%1.0%Govt debt/GDP40%38%36%36%32%27%24%21%CPI inflation (%)9.2%5.9%1.4%3.4%4.6%7.1%7.4%5.5%Money demand (%)6.3%5.5%17.3%15.2%16.0%12.0%7.2%5.9%Stock prices (%change)16%-13%24%34%44%33%Interest rates12.011.77.87.17.69.610.68.9Exch. Rate ($)10.57.66.46.46.87.07.67.7Trade/GDP (%)53%44%45%46%52%55%56%56%Oil price (Brent)$2529385465738777
Billions US $
Export of goods31.938.748.355.363.973.979.686.6Imports of goods27.135.348.656.370.080.687.993Other:-3.9-5.3-6.7-8.7-10.4-13.8-12.0-11.5Current account0.9-1.9-7.0-9.7-16.5-20.5-20.2-18.2% of GDP0.8%-1.1%-3.2%-4.0%-6.4%-7.3%-6.7%-5.7%Net FDI1.90.2-0.65.6-6.72.12.75.9Loan repayments-3.8-2.0-1.5-2.0-3.8-7.5-10.0-12.5Net other capital flows0.94.013.212.532.133.628.726Balance of payments-0.10.44.16.45.07.71.12.1Reserves5.76.110.116.521.529.230.432.4Total debt24.726.627.229.633.935.538.040o/w short term debt7.87.47.79.013.220.626.831.3
Source: OEF (Oxford Economic Forecasting) and SEB estimates 
Rating history
Fitch BBB-BBBBBBBBB+BBB+BBB+Moody's Baa2Baa2Baa2Baa1Baa1Baa1S&P BBB-BBBBBBBBB+BBB+BBB+
Type of government:
ANC majority government headed by president Thabo MbekiNext electionsParliamentary elections 2009.
Other:
Latest PC dealn.a.Recent IMF programsCompensatory and Contingency Financing Facility (CCFF) in December 1993.%.3.9.6
E x c h a n g e r a t e
Source: Reuters EcoWin 
0 0 0 1 0 2 0 3 0 4 0 5 0 6 0 7 0 8
   U   S   D   /   Z   A   R
567891 01 11 21 31 4
C r e d it t o t h e d o m e s t ic p r iv a t e s e c t o r
c.o.p 12 months
Source: Reuters EcoWin 
0 2 0 3 0 4 0 5 0 6 0 7
   P  e  r  c  e  n   t
051 01 52 02 53 0
S to c k m a r k e t
Source: Reuters EcoWin 
0 2 0 3 0 4 0 5 0 6 0 7 0 8
   I  n   d  e  x
5 0 0 07 5 0 01 0 0 0 01 2 5 0 01 5 0 0 01 7 5 0 02 0 0 0 02 2 5 0 02 5 0 0 02 7 5 0 03 0 0 0 03 2 5 0 0
In f la t io n a n d r e p o r a t e
Source: Reuters EcoWin 
0 1 0 2 0 3 0 4 0 5 0 6 0 7 0 8
   P  e  r  c  e  n   t
34567891 01 11 21 31 4
R e p o r a t eC P IX
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