The transfer of power in South Africa has pulled the rug from under the feet of some short traders. At stake: more than $5 billion.

Three out of four stocks in Johannesburg rallied on Thursday, sending the benchmark FTSE/JSE Africa All Share Index to the biggest increase since 2014 and the rand to a three-year high, as Cyril Ramaphosa replaced Jacob Zuma as president. The end of a political wrangle that made South African assets among the world’s most volatile left bears staring at potential losses in some of the country’s best-performing equities.

South Africa has underperformed emerging-market peers this year as efforts to oust Zuma turned into a see-saw game, with the defiant 75-year-old leader refusing to resign late as Wednesday. That, and the blow to exporters from a stronger rand, had made bearish bets against the country’s equity market attractive.

But once Zuma stepped down, the outlook seemed to have reversed. For the first time since September 2016, investors are paying a premium to own South African shares rather than global stocks.

Steinhoff Africa Retail, in which short seller Viceroy Research had flagged financial irregularities, jumped 5%. Short positions accounted for 14.7% of the company’s free-floating equity, according to IHS Markit data.

Truworths International, which had 12% of its free-floating share capital shorted, climbed 4.3% to a 22-month high.

The biggest short position was in Kumba Iron Ore, with about $475 million, or 35% of its equity. The share increased as much as 6.1% before erasing gains.

Thursday’s rally also sent Nedbank Group, Shoprite Holdings and FirstRand to record highs. All three shares had witnessed an increase in short positions over the past month.

The one wager that short traders seemed to have got right was in property investment-related stocks. Resilient REIT, which saw pessimistic bets increase to a record, plunged 12%, the most ever. NEPI Rockcastle, Fortress REIT and Greenbay Properties also slumped, boosting gains for short traders.

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© 2018 Bloomberg