JOHANNESBURG: South Africa’s rand inched firmer on Thursday, regaining the momentum injected by Cyril Ramaphosa’s election to lead the ruling African National Congress.
At 1500 GMT the rand had firmed 0.2 percent to 12.7250, slightly down from a session best of 12.6800 in midmorning trade, with technical indicators suggesting there was still room for further gains as far as 12.26.
The unit looks certain to close below the 12.9945 200-day weekly moving average, offering attractive buying levels for investors still searching for long plays on the rand.
The rand’s rally was ignited by Deputy President Ramaphosa’s victory in the race to be leader of the ANC following a campaign pinned on tackling corruption and pushing business friendly policies.
The rand has gained nearly 7 percent against the dollar since last Friday.
Moody’s, the last of the top three agencies that still rates Pretoria’s local currency debt at investment grade, cited Ramaphosa’s victory as a positive for economic policy.
Some investors however warned that the euphoria may be overdone and that the currency will remain volatile in the closing weeks of the year.
“Although the rand has continued to hold the gains posted recently, it will require real impetus to extend the potential gains beyond the recent lows in the 12.50’s in the short term,” said Nedbank’s Reezwana Sumad.
Bonds were weaker, with the yield on the benchmark paper due in 2026 adding 8 basis points to 8.695 percent.
“The Johannesburg Stock Exchange All Share Index traded higher this week in line with stronger emerging market equities and improved investor sentiment following Ramaphosa’s victory,” said analysts at NKC African Economic in a note.
The benchmark Top-40 index climbed 1.59 percent at 52,082 points while the All-Share index gained 1.27 percent to 58,771 points.
Mediclinic rose 6.55 percent to 104.70 rand, market heavy-weigh Naspers climbed 4.53 percent to 3450 rand, while British American Tobacco gained 2.39 percent to 855.23 rand.
Source: Brecorder.com
