SARB's tightening cycle to end soon

The output gap in South Aferican economy is widening for about a year now. Unemployment rates have increased to new cycle highs. Moreover, supply side bottlenecks may subside. Volumes in mining production have been on the upside as extraction increased to compensate for a decline in industrial metals' price. Meanwhile, electricity consumption has been declining since the beginning of the year. 

"An attractive currency valuation will likely bring foreign investors back to the local equity market. The Jo'burg market remains only 10% off the all-time highs in local currency but 28% off the highs in USD. Therefore, SARB's tightening cycle is expected to be short lived", argues RBC Caoital Markets.