(This is part of a brief note I sent out to clients this morning)

Nelson Rolihlahla Dalibunga Mandela,  95, died last night on Thursday December 5 2013.

  • There may be short-swings in some South African financial instruments but it is unlikely that this will be a longer term driver of the markets. Nelson Mandela has been ill for some time and has not played a role in South African politics since the late 90’s.
  • There will be intense world focus on the country – and much of that focus is likely to negatively compare the current crop of leaders with Nelson Mandela (but the martyred and canonised version of the man). It should be noted that investors in South African equities and bonds appear increasingly bleak about the environment (labour unrest, labour productivity, uncertain mining legislation – as well as uncertainty about a host of other regulatory and legislative interventions by the government –  corruption and cover-up around the President’s Nkandla residence, the use of state security apparatuses to advance certain interests of politicians, uncertainty about the infrastructure build programme, the difficulties in achieving fiscal consolidation and the possibility of further ratings downgrades). Those uncertainties will increase with Mandela’s death, although his passing is unlikely to impact significantly on the real situation.
  • The country will be crawling with celebrities and senior politicians from other countries (including as many as 5 current and former US presidents) – which will be highly disruptive in a number of different ways. There is also likely to be a period of formal national mourning, which could feed through into already anaemic GDP growth numbers for the 4th quarter.
  • For the African National Congress the opportunity emerges for the ruling party to run an election campaign centred around the great and popular ex-president – and we should expect Nelson Mandela to be alongside Jacob Zuma in many posters and promotional material. Of course the risk is that this makes the comparison more obviously unfavourable for the incumbent. But on the whole we think the ANC election campaign will benefit from foregrounding the key role played by Nelson Mandela at all times casting himself as a loyal member and leader of the ANC.
  • As I say in the final paragraph below: the financial market is unlikely to react wildly or in a sustained manner to this single event … but then the financial markets do not list the price of everything that is important.

Here is an updated version of some comments I have made on previous occasions (including here) when his death seemed imminent:

The country will initially be bathed in a blinding light and then buried in mountains of obscuring verbiage taller and wider than the verbiage that covers the September 11 attacks on the World Trade Centre, the US invasions of Iraq and Global Warming combined.

It is only the usually skittish financial markets that I expect  to take the old man’s passing with equanimity.

For those who comment on South African financial markets, Nelson Mandela’s death should be considered “investment neutral” – but in an investment environment that looks anything but neutral from a political risk perspective.

But there are more important meanings than prices in financial markets.

Nelson Mandela is the last symbolic link to the full ambit of the struggle of all Africans, but black South Africans in particular, to free themselves from colonialism, Apartheid and slavery.

Crucially, he is also the symbolic representative of the compromises and tolerance that characterised the negotiations from 1990 and the election in 1994.

If that was not enough for the symbol to carry, Nelson Mandela’s 27 years in prison and his calm forbearance have come to represent for many throughout the world the manifestation of the human spirit in its best possible form.

His passing will give focus to the anxieties many feel about  South Africa’s future – but also to anxieties about the world, about the predation of humans on each other and on the planet. He was, after all, as much a global symbol and leader as a South African one.

Our feelings about the lives and deaths of “great” men and women allow us an emotional link to the grand scope of the history we live in and through.  The death of Pope John Paul II and of Diana Spencer gave a sense of how, in the age of celebrity, the so-called ‘general public’ becomes emotionally connected to the grand human drama that can usually only be understood a long time afterwards and at many degrees of abstraction.

Nelson Mandela’s death will be such a moment for humanity, because it will represent the drawing together of important threads of the last several hundred years of human history.

The point, however, for South African financial markets is that little will change in South Africa with the passing of the man. The real running of the country and the dealing in the compromises between the old South Africa and the new, has long moved on from Nelson Mandela.

It has now become a truism that even in his last years as president Nelson Mandela was already more important as a symbol than as a politician and statesman.

There is real and visceral grief from comrades, friends and citizens who have participated with him in the struggles for African liberation. I imagine too, that throughout the world there will be an unprecedented outpouring of emotion that will elevate the symbol even higher than the man.

South Africa, for one last time, will be bathed in light and the centre of puzzled global attention – as it often has been since the formal beginnings of Grand Apartheid in the late 40′s and early 50′s.

But  South African financial markets – the currency, the equities, the bonds and products that derive from these – are unlikely to falter.

But that only tells us one thing: that the ticker tape does not list the price of every important thing.

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