Friday, 18 September 2015 00:23
JOHANNESBURG: South African stocks rose on Thursday, lifting the benchmark index to its highest level in more than a month as traders bet against an interest rate increase in the United States.
Investors have dumped emerging market assets in anticipation that US rates could start rising in September, but those expectations have now largely been pushed back to December.
“We don’t think the Fed is going to hike, but tomorrow’s market moves will all be about the tone of the statement and what is said at the Fed press conference (later on Thursday),” said Bart Stemmet, an analyst at NKC African Economics.
The benchmark JSE Top-40 index was up 1.2 percent at 46,137 and the broader All-share index added 1.07 percent to 51,573. Both indices have gained for four straight sessions.
On the foreign exchange market, the rand traded 0.86 percent weaker against the dollar to 13.3800 by 1553 GMT, after weakening more than 1 percent at midday.
“Given that the Fed decision is black or white, hike or no hike, it is hard to see an outcome which does not move the rand much one way or the another,” said John Cairns, a currency strategist at Rand Merchant Bank.
“Since a Fed hike is not fully priced in the market, a hike would impact the rand more than a lack of move.”
On the bourse, SABMiller added the most points to the index, extending gains into a second straight day after rival Anheuser-Busch InBev made a takeover approach that would create a global beer giant.
Shares in the company, which are also listed in London , ended 2 percent higher at 754.11 rand.
Richemont climbed 1.75 percent to 108 rand, a day after the luxury goods maker beat estimates with a 4 percent increase in sales for five months to August.
Investec gained 1.7 percent to 110.96 rand after the investment bank and asset manager flagged higher first-half profit.
Yields on bonds edged up, with the paper due in 2026 adding 4 basis points to 8.500.
The benchmark issue has added 150 basis points in the last month with the take-up of emerging market bonds subdued ahead of the US rate decision.
