Resumption of vaccine roll-out will stabilise markets

SOUTH Africa was expected to resume using the Johnson & Johnson (J&J) vaccine to immunise healthcare workers soon, a move that was expected to bring stability in the markets as Covid-19 cases are on the rise.

Confidence in the global economic recovery has been rising, due to the success of vaccination roll-outs in various countries, with investors in South African markets keeping a keen eye on the speed of vaccine delivery and the infection rate.

The government said yesterday that the temporary suspension of the J&J vaccine on the Sisonke Vaccination Programme would be lifted, but a date had yet to be confirmed.

The Department of Health last week temporarily suspended the J&J vaccination programme as a precautionary measure after six people developed a rare type of blood clot in the US. The suspension led to the rand sliding in cautious trade as risk sentiment soured.

The suspension of the vaccine rollout had brought slight uncertainty to the financial markets.

Acting Minister in the Presidency Khumbudzo Ntshavheni said the reviewed data had confirmed that South Africa had not experienced any rare blood clots among healthcare workers who had been vaccinated.

More than 292 623 healthcare workers had been vaccinated under the Sisonke Vaccination Programme by the middle of this month.

Ntshavheni said the Cabinet had been in discussions with the SA Health Products Regulatory Authority (Sahpra) over their concerns about suspending the vaccination programme.

Sahpra recommended that the pause in the Sisonke study be lifted, provided that specific conditions were met, including strengthened screening of participants at high risk of a blood clotting disorder.

Investors this week dumped emerging-markets currencies as countries such as India and Brazil continue recording high Covid-19 infection rates.

The rand has been stuck in a narrow trading range as it has struggled for direction against the dollar.

FXTM’s senior research analyst, Lukman Otunuga, said it felt like the rand was searching for a fresh directional catalyst before making its next move.

He said a sense of caution continued to linger amid concerns about the surge in global coronavirus cases.

“Even the latest inflation figures failed to move the currency, with the rand trading around R14.28 to the greenback,” he said.

“If investors adopt a defensive approach and risk-off returns, this could hit emerging-market currencies, including the rand,” Otunuga said.