J.P. Morgan's Outlook on South African Equities Sparks Concern

J.P. Morgan has downgraded South African equities to 'neutral' from 'overweight', citing economic slowdown concerns. Despite policy reform efforts, growth remains limited. Global relations with the U.S. add uncertainty, while local investors face challenges amid execution of reforms. The brokerage favors Emerging European equities over MENA stocks.

On Tuesday, J.P. Morgan downgraded South African equities from 'overweight' to 'neutral', raising alarms over the country's slowing economy and the effectiveness of its policy reforms.

Despite the South African government's efforts and optimistic reform plans, economic growth is expected to remain just under 2% in the coming years. Recent political moves, such as U.S. President Donald Trump's executive order to cut financial aid, further complicate the investment landscape.

J.P. Morgan suggests a cautious approach to investing in South African assets due to strained international relations, recommending a preference for Emerging European equities within the CEEMEA region over MENA equities.

(With inputs from agencies.)