(Bloomberg) -- An index of South African bank stocks jumped to a record Friday as political leaders agreed to a broad alliance to form the next government.

The gauge of banking stocks rallied as much as 5.7%, the most since November 2020. Absa Group Ltd., Capitec Bank Holdings Ltd. and Standard Bank Group Ltd. were all more than 5% higher by 4:27 p.m. local time.

The deal between parties sets the stage for an alliance led by the African National Congress and the business-friendly Democratic Alliance, following an election in which the ANC lost its outright majority for the first time since 1994.

“The government of national unity outcome with the African National Congress and Democratic Alliance is positive for South African banks as it is probably the best outcome for longer term economic growth and investor sentiment toward the country’s economy,” wrote Anchor Securities Stockbrokers Ltd. analyst Craig Smith in emailed comments.

--With assistance from Adelaide Changole.

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