Goldman Sees South Africa Asset Rally on Investment Grade Upgrade Hopes

Goldman Sachs Group Inc. believes that South Africa's asset prices are not accurately pricing in the country's potential return to investment grade, leaving room for government bonds, stocks, and the rand to rally.

The country is expected to regain its investment status as soon as 2028, according to a Goldman team led by economist Andrew Matheny. This upgrade would be the result of ratings companies rewarding South Africa's improving finances and economic growth.

Goldman points out that markets are currently not pricing in this possibility, which means that investors may be missing out on potential gains if they do not account for the country's possible return to investment grade.