The investment bank is now underweight on the country, after downgrading South African consumer stocks to neutral and keeping banking stocks underweight.
Amid the crisis-hit mining sector, BAML downgraded the South African resources sector from “buy” to “hold”, adding that it does not find a “compelling case” for the industry.
Analysts also argued that the wage battle being fought in the mining sector could well spread beyond resources into the public sector.
“If the end result of the strikes is just higher wages, then that means we have plenty of strikes ahead of us as contagion will keep spreading,” it said. “The strikes have plenty of downside if they are not contained.”
Following strikes at its other operations, Anglo American Platinum yesterday said 300 miners at its Kumba iron ore unit are demanding a monthly salary increase of 15,000 rand (£1,056) above what they are already earning.
Two months ago, the Kumba unit agreed a two-year wage settlement for an above-inflation increase of between nine and 12 per cent for workers.
Amplats is losing around 120,000 tonnes of iron ore production a day thanks to the strikes at Kumba.
Meanwhile, South Africa’s union of local government workers yesterday gave notice to embark on a national strike, as the unrest in the mines spread to the public sector.
The action could lead to an indefinite strike among workers on lower incomes calling for parity in wages across Africa’s largest economy.
Almost 100,000 workers, including 75,000 in the mining sector, have gone on strike recently to demand higher wages.
Elsewhere, Stuart Murray, chief executive of strike-hit Aquarius Platinum, yesterday resigned with immediate effect.
TIMELINE OF SOUTH AFRICAN UNREST
Around 3,000 rock drillers down tools during an illegal strike at Lonmin’s Marikana mine, demanding 12,500 rand a month.
At Marikana, South African police kill 34 protestors and wound 78 in the bloodiest day since apartheid ended.
Over 15,000 miners go on strike at Gold Fields’ mine west of Johannesburg. Strikes continue at Marikana.
The world’s largest platinum producer Anglo American Platinum halts operations at Rustenberg amid safety concerns.
Lonmin miners secure a pay rise and agree to end the five-week strike. Unrest continues at Gold Fields and Amplats.
Amplats fires 12,000 striking miners who fail to turn up to a disciplinary hearing. Strikes spread to its Kumba iron ore unit.