South Africa’s commodity windfall is expected to seep into the broader economy, boosting banks, retailers and property stocks as stronger prices improve the fiscal outlook and support lower interest rates, according to Old Mutual Investment Group.
“The surge in precious metals prices has already lifted corporate tax receipts and dividends, creating positive second-round effects for the consumer economy,” OMIG Chief Investment Officer Siboniso Nxumalo said at an event in Johannesburg on Tuesday. “Historically, when there’s been a commodity boom, there are spillover benefits into the economy, which then benefit consumer markets.”