Rand softer as dollar rebounds, JSE gains

THE RAND weakened against the dollar yesterday as the greenback rose amid signs the US may negotiate a resolution to a trade dispute with China, while stocks edged higher.

At 5pm, the rand bid at R11.9806 to the dollar, 8.92 cents softer than at the same time on Wednesday.

The dollar bounced after President Donald Trump’s economic adviser said the US administration was negotiating with China, not engaging in a trade war, easing investor fears about tit-for-tat measures hurting global growth.

The rand has lost more than 1 percent against the dollar since March 29, according to Thomson Reuters data, as the trade tiff between the world’s two largest economies escalated.

ETM analyst, Halen Bothma, said the rand was also undermined by concerns about the government’s fiscal position, highlighted this week by the tax service admitting it had missed its revenue collection target, and Moody’s downgrading state power giant Eskom.

A survey yesterday showed South African business confidence fell in March, in a sign that momentum in the economy has slowed since a sharp rebound in the wake of Cyril Ramaphosa’s election as leader of the ANC in late December.

A separate survey showed private-sector activity expanded at a slower pace in March as the rate of increase in output and new orders eased.

In fixed income, the yield for the benchmark government bond fell 3 basis points to 8.04 percent, reflecting firmer bond prices.

In the equities market, the benchmark JSE Top40 index rose 2.18 percent to 49 097.22 points, while the all share index bounced back from the previous sessions lows, up 2.12 percent to 55 761.15 points.

The market recovered in line with other emerging stocks as buying came back into previously oversold shares, with the banking sector lifting 2.17 percent to 9 884.77 points and general retailers rising 1.87 percent to end the session at 8 503.71 points

“There seems to be a lot of opportunistic buying and bargain hunting for shares that are down here. We have seen a lot of foreign investors coming back into our market over the last few months,” said Vasili Girasis, equity trader at BP Bernstein.