South Africa is in a heap of trouble
You see, South Africa is one of the ‘Fragile Five’ countries.
Morgan Stanley coined the phrase which shows emerging economies such as Indonesia, Turkey, India, Brazil and South Africa are in a vulnerable position.
This group of countries represents about 7% of the global economy and they all have two things in common: A massive current account deficit and the fact they’re all emerging markets.
The current account deficit shows their trade gap – and means they rely heavily on international financing. In other words, these countries have relied on money flowing into their borders for economic growth.
So what’s the big deal? I mean, some countries have had deficits for ages.
But this time it’s different.
Why our country is more at risk than the rest
You see, it’s the first time there’s been a stimulus program on this scale. In fact, earlier this year when the Fed merely HINTED at cutting down its bond-buying (stimulus) program, emerging market currencies weakened drastically.
Our currency dropped by nearly 13% at the time!
And compared to the other ‘Fragile Five’, our country is in a tougher spot.
Of the five, we’re the only one whose central bank hasn’t raised interest rates.
Normally, the Reserve Bank would take early action. But raising rates just before an election will mean less votes for the government. And also, raising rates will slow down growth, which is already dismal compared to our African counterparts.
So all this means is that our currency is even more vulnerable. When the stimulus program comes to an end it should see money flowing out of our country – sending our rand further down the drain.
But there is a way you can protect yourself from this story… And even profit from it!
How you can profit from South Africa’s biggest weakness
The best way to profit from this weakness is to buy shares. But not just any share. You want a share that is easily accessed through the JSE AND will profit from our rand plummeting.
And that’s why you should invest in a company like Sasol.
Because Sasol has operations all over the world and sells oil and gas, it earns more money when our currency weakens!
Just this year alone it benefited from the rand and made gains of 31.78%.
With the threat of our rand weakening even further you should put yourself in a profitable position and add Sasol shares to your portfolio.
Thrive in your possibilities,