Rand rally continues on ANC changes

DOMESTIC markets strengthened yesterday, driven by optimism about the prospects for change under the new leader of the ANC.

At 5pm, the rand bid at R12.1149 to the dollar, 9.32c firmer than at the same time on Friday, and 0.49 percent firmer than its New York close on Friday.

The ANC discussed last week removing President Jacob Zuma as head of state but no decision or date for his departure was agreed, secretary general Ace Magashule said yesterday.

There has been widespread speculation in local media that the ANC’s 80-member executive committee passed a resolution at the weekend calling for the removal of Zuma as South African president.

Any sign that Zuma could step down before his second presidential term ends in 2019 has tended to lift South African assets, including the rand.

The rand has rallied to a twoand-a-half year high since union leader-turned-businessman Cyril Ramaphosa won the ANC leadership on December 18 as investors bet he would crack down on corruption and implement policy reforms.

The ANC’s electoral dominance means he will almost certainly be the country’s next president.

On Saturday a government committee headed by Ramaphosa appointed a new board at stateowned power utility Eskom to help tackle governance concerns.

“The financial markets have reacted very positively to these and related developments in the ANC, as have many of the disaffected voices who last year were clamouring for change in the ruling party,” said NKC African Economics analyst, Gary van Staden.

Government bonds firmed alongside the currency, with the yield for the benchmark instrument falling 9 basis points to 8.405 percent.

On the equities market, the all share index rose 0.27 percent to 61 078.26 points, while the Top40 index climbed 0.2 percent to 54 165.85 points.

Banks, which usually respond to political developments, were among the top gainers, with that index up 2.48 percent to 9 627 points.

FirstRand gained 3.15 percent to R66.50, Standard Bank advanced 2.78 percent to R199.91, while Nedbank ended the session 2.5 percent higher at R265.47.

FTSE/JSE Africa Index Series