Rand touches one-week highs, JSE rises

THE RAND raced to a one-week high yesterday as traders bet the currency was poised for a sustained rally as political fears eased and the economy showed signs of recovery.

At 5pm, the rand was bid at R13.2196 to the dollar, 11.12c firmer than at the same time on Tuesday, its strongest since August 8, shrugging off a warning by Moody’s that political turmoil inside the ANC risked derailing policy reforms.

Data on Tuesday showed South African retail sales rose 2.9 percent year-on-year in June. Together with trade surpluses for the last five months and a narrowing current account deficit, the short-term outlook for the rand was positive, economists said.

“Very encouragingly, in the past three months from April to June retail sales rose by a substantial 2.1 percent, which should help to boost the Q2 (second quarter) 2017 GDP growth estimate, helping to pull South Africa out of recession,” said Stanlib economist, Kevin Lings.

Traders said minutes of the US Federal Reserve’s recent meeting, due out after the close of local trade, was unlikely to impact the rand as expectations for at least one more US rate hike this year were priced in already.

Meanwhile, local shares also rose, led by heavyweight Naspers after its subsidiary Tencent Holdings trumped forecasts to deliver its best-ever quarterly results.

The benchmark JSE Top40 index gained 1.14 percent to 49 211.76 points while the all share index rose 1 percent to 55 534.6 points.

Naspers rose 2.93 percent to R2 887.15 after Tencent beat forecasts to report its best-ever quarterly results, driven by higher income from smartphone games, payments and online advertising.