Benchmark South African stocks in gains as Ramaphosa named new president

South African stocks scored their biggest gains since June 2016 after news that Cyril Ramaphosa, a pro-business reformist, would be taking the helm.

The FTSE/JSE Africa All Share Index rose as much as 2.7 percent, while the rand reached its strongest level since February 2015, gaining 0.5 percent at 11.6570 to the dollar in early trade Thursday.

Sectors more sensitive to the economic cycle, such as financials and materials stocks, added the most points to the index, while companies with exposure to South Africa were among the biggest gainers as the rand held near a three-year high after President Jacob Zuma resigned.

Shares in South Africa-exposed financial services group Old Mutual and miner Anglo American rose 4.8 percent and 3 percent respectively, while paper and packaging company Mondi advanced 3.5 percent.

Ramaphosa, the only candidate, was approved without a vote by the parliament in Cape Town when chief justice Mogoeng Mogoeng announced to assembled lawmakers who responded with loud cheers.

Ramaphosa, 65, who won control of the ANC when he was elected as its head in December, is expected to deliver his address to the nation Friday.

Analysts say he must revive the economy and crack down on what he has admitted is rampant government corruption if he is to boost the party’s tarnished reputation before a tricky general election next year.

He is a former trade unionist and Mandela ally who led talks to end apartheid in the early 1990s and then became a hugely wealthy businessman before returning to politics.

See also: South African rand remains near 3year highs after Zuma’s resignation

Zuma’s hold over the ANC was broken in December when his chosen successor — his former wife Nkosazana Dlamini-Zuma, narrowly lost to Ramaphosa in a vote for the new party leader.

He announced his resignation late Wednesday and aimed barbs at the African National Congress (ANC) party for vowing to oust him via a no-confidence vote in parliament.

In a 30-minute televised address, Zuma said he had “come to the decision to resign as president of the republic with immediate effect”.

“I have only asked my party to articulate my transgressions and the reason for its immediate instruction that I vacate office,” he said.

Zuma, 75, who had no formal education, had been embroiled in a divisive power struggle with Ramaphosa, the deputy president.

He was jailed on Robben Island for 10 years alongside Nelson Mandela under apartheid and rose through the ranks of the ANC to take power in 2009.

But his rule was dominated by graft scandals, economic slowdown and falling popularity for the celebrated liberation party.

In a day of high drama, police early Wednesday raided the Johannesburg home of the Gupta business family, which is accused of overseeing a web of corruption in Zuma’s government.

Police said three unidentified people had been arrested in investigations into “Vrede Farm” — allegations that millions of dollars of public money meant for poor dairy farmers were siphoned off by the Guptas.

Local media reported that Zuma had been pushing for a resignation deal that included his legal fees to fight multiple criminal charges — but he denied the allegations in his resignation speech.

One case against him relates to 783 payments he allegedly received linked to an arms deal before he came to power.

Other graft allegations have centred on the three Gupta brothers, who are accused of unfairly obtaining lucrative government contracts and even hand-picking Zuma’s ministerial appointments.

The political standoff in recent weeks plunged South Africa, the continent’s most developed economy, into confusion over who was running the country, with last Thursday’s annual State of the Nation address cancelled at the last-minute.