Rand firmer as downgrade fears fade

THE RAND firmed yesterday, buoyed by Moody’s decision to delay ratings decision on the sovereign that was scheduled for last Friday.

At 5pm, the rand was bid at R13.2932 to the dollar, 19.30c stronger than at the same time on Friday.

Government bonds also firmed, with the yield for the benchmark paper falling.

“They (rand and bonds) were supported by the Treasury’s announcement late last Friday that Moody’s was not planning to make a sovereign rating decision soon because things haven’t changed since the June review,” 4Cast analysts said in a note.

The Treasury said Moody’s could not publish its rating decision on Friday as the firm had already made two changes to the country’s debt status.

Moody’s, which in June cut its rating to one notch above investment grade with a negative outlook, was instead expected to publish a rating opinion on South Africa today.

A downgrade by Moody’s could have left South Africa rated “junk” by all three major agencies after the sovereign debt was cut to sub-investment by Fitch and S&P Global Ratings in April after President Jacob Zuma fired Pravin Gordhan as finance minister.

Meanwhile, on the bourse, Naspers topped the gainers’ list on the benchmark JSE Top40 index, tracking a rebound in its Chinese money maker Tencent Holdings.

Naspers, whose one-third stake in Tencent dwarfs its own market capitalisation, climbed 2.91 percent to R2 845.

The Top40 index rose 0.7 percent at 49 108.55 points and the all share index added 0.56 percent to 55 465.65 points.