Bourse hits record high as rand slips

STOCKS hit a record high yesterday, buoyed by the recent rally by heavyweights such as Naspers with sizeable foreign earnings.

The shares benefited from the rand’s slip to a two-week low. As of 5.37pm, the local unit had dipped to R13.2250 to the dollar, 1.69 percent weaker than its close on Friday.

The bourse has been driven by foreign flows into equities and earnings garnered offshore, at a time when the country’s economy is in a recession.

“It is the case that a handful of shares not linked to the South African economy’s fortunes have done well,” said Feroz Basa, head of Old Mutual’s Global Emerging Markets Fund.

The JSE’s all share index scaled a new peak of 55 366 in intraday trading, but gave up some of its gains to close 0.59 percent higher at 55 207.41 points. The Top40 index was up 0.66 percent at 48 873.13 points.

Naspers, which holds a third of China’s Tencent, led the way, gaining 2.04 percent to R2 908.50. The stock – up 44 percent so far this year – hit a record high of R2•939.97 last week.

Richemont, which has risen more than 23 percent this year, was up 1.54 percent to R112.15.

The rand retreated to its lowest since July 13 after ratings agency Moody’s warned that while the rate cut on July 20 by the central bank would support growth, it signalled growing political pressure on economic policy.

“It’s confirmation that Moody’s sees monetary policy as key to the rating. And if they aren’t happy it means they might downgrade us in the future, but not now,” said currency trader at Rand Merchant Bank, Jim Bryson.

In fixed income, the yield on the benchmark 2026 paper rose.