Standard Bank CEO says investors remain wary of SA rally

South African assets have rallied in recent months, yet the head of the country's biggest bank still sees a cautious approach among many foreign investors who are waiting for the continent's most industrialised economy to deliver on promised reforms.

The formation of a government of national unity, led by president Cyril Ramaphosa after the May elections, sparked renewed confidence in local markets as the coalition includes parties considered business-friendly such as the Democratic Alliance (DA).

The rand has turned its fortunes around to become one of the biggest gainers against the dollar among emerging currencies this year, and both local and hard-currency bonds have outperformed peers from developing economies.

Still, many international investors remain wary, Sim Tshabalala, CEO of Standard Bank Group, said at Bloomberg's Future of Finance event last week.

Memories of the last wave of optimism from 2018 still resonate among investors who are concerned about risks of another market correction if the reform momentum falters or the coalition collapses.

"The level of confidence this time is greater than any other time other than in 1994," Tshabalala said, but he warned that the positive mood will only last if the government can deliver the needed structural reforms as well as investor-friendly policies supporting economic activity.