Johannesburg - Jacob Zuma's election as leader of the ruling ANC could leave markets jittery in the months ahead as they await clearer indications of his policies, economists said on Tuesday.
Zuma launched his remarkable political comeback on a swell of massive support from trade unionists who see him as a champion of the working class, hoping for a change from President Thabo Mbeki's pro-business policies.
The markets, already anticipating a Zuma win, had not stumbled dramatically before the result late Tuesday but could be on edge in months ahead, adopting a "wait-and-see" approach, said T-Sec economist Mike Schussler.
"Markets will look at economic policies and the person, that's where the response will be," he told AFP.
"It will slowly dawn on the markets that Zuma will probably be the next president of South Africa, and that there might be other things at play such as a possible court case in the next few months."
Investors watching
Dawie Roodt, chief economist for investment group Efficient, said current market pressures could not necessarily be ascribed to Zuma.
"I think markets are a little bit on edge, but it's not a serious nervousness that I am picking up," he said, adding that international investors he had spoken to were "not all getting ready to run out of South Africa".
"I don't know what Zuma stands for, I don't know what his economic beliefs are because he has never said anything," Roodt told AFP.
"He owes Cosatu (the Congress of SA Trade Unions) a lot and I know what Cosatu stands for and I don't like that."
The new ANC leader - who still faces possible corruption charges as prosecutors mull evidence against him - has been sympathetic to the concerns of the poor, giving voice to their gripes about education, healthcare, income disparities and massive unemployment in country.
Negative response
"I think if the economic policies are going to be a step backward towards the left then the market response would be reasonably negative. This would lead to a weaker rand and higher interest rates," said Schussler.
Roodt said despite the uncertainty around a Zuma presidency, he was unlikely to be able to change the country's economic course.
"The South African economy is very small and very integrated with the rest of the world. In South Africa the official opposition is not the Democratic Alliance, it's the financial markets."
Saki Macozoma, a high-ranking ANC member and businessman said this week that the people Zuma surrounded himself with, and who were his main supporters, were cause for major concern.
"If some of the things they say come to pass then we will be facing a calamity," he told the Financial Times of London.
Macozoma pointed out that a Zuma presidency would see respected technocrats who have steered the country's economy step down, with few options to replace them.
"We are going to need a time period where the Jabu Moleketis (deputy finance minister) and Trevor Manuels (finance minister) need to be in power for a transitional period at least, otherwise markets will be spooked," said Schussler.
Zuma may need a miracle
While Zuma's appeal may have been that he provides hope to those who feel they gained nothing under Mbeki, Schussler said it would take a "miracle" to serve up some of their demands.
He said South Africa's reliance on foreign capital left "very little room for him to manoeuvre on policy."
As for the working classes demands for job creation, there was no short term solution as South Africa had a huge skills shortage that could only be fixed in the short term by importing skills.
"In developing markets 9.2% have a degree or more. In South Africa its only 3%. Mr Zuma cannot address this any other way than to fix the education system."
"His supporters are definitely hoping for a miracle in that sense."
