Emerging Markets Strategy Weekly: There is only one game in town

Research evidence excerpt

Emerging Markets Strategy Weekly: There is only one game in town

Emerging Markets Strategy Weekly

23 July 2026 Citi Research

Figure 9. Global refinery output has fallen sharply Figure 10. We were losing around ~5mb/d of refinery output

compared to what might be expected by historical in May/June compared to what might normally be expected

standards based on normal capacity utilization (2011-2019)

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Source: Citi Research, Bloomberg, FGE, Olix, IEA Source: Citi Research, Bloomberg, FGE, Olix, IEA

On the ZAR front, we believe it is too early to expect politically driven noise in

ZAR assets. The upcoming local elections will likely be a potential moment for the

two GNU dominant parties to reassert their messages and emphasize their

different views. The case for sub-40% support to the ANC in the upcoming

elections looks quite feasible, in our view - which could be a strong reminder that

the South African political system is undergoing important structural changes

away from ANC dominance. Municipality finance will be at the very heart of the

discussions ahead of these local elections. The National Treasury has started

releasing the ZAR 13.6bn in July equitable share allocations withheld from 69

municipalities over unfunded budgets, unpaid creditors, inadequate action against

unauthorised, irregular, fruitless and wasteful expenditure (UIFWE), and weak

consequence management.

But it is possible to envision a cautious ANC (not willing to shake things up at the

GNU level), given the internal doubts on future changes of leadership. In the

meantime, a firm stance on monetary policy and terms of trade dynamics are