Banks, retailers lift bourse, rand gets a breather
STOCKS rose on Thursday thanks to gains for firms including banks and some retailers, while the rand stabilised after a torrid week which saw the currency set several new three-month lows against the dollar.
South African markets were closed on Friday for the Freedom Day public holiday.
At 5pm on Thursday, the rand was steady at R12.4282 to the dollar, having fallen as far as R12.5325 on Wednesday, its weakest since January 10.
“We expect the rand to regain lost ground as soon as global conditions stabilise. The recent change of leadership points to structural improvements in the South African economy and should underpin confidence,” currency analysts at UBS said in a note.
President Cyril Ramaphosa has staked his reputation on revitalising the economy and rooting out corruption, which marred his predecessor Jacob Zuma’s nine years in power. Since Ramaphosa’s election in February, business and consumer confidence have risen.
Government bonds were little changed, with the yield on the benchmark government bond due in 2026 up 1.5 basis points to 8.220 percent.
On the bourse, the benchmark Top40 index rose 0.89 percent to 50 684.22 points, while the all share index gained 0.82 percent to 57 453.04 points.
“We’re seeing a bit of a breather after a sharp sell-off in the last three days,” said FFO Securities portfolio manager, Wilmar Buys. “We are recovering on low volumes.”
Most sectors closed higher, with banks, utilities, retailers and telecoms seeing gains. Rand hedge stocks, which investors use to position for a weaker rand, came under pressure.
Mr Price closed 3.79 percent higher at R272 after saying it expected full-year earnings per share to rise by up to 22 percent.
Sasol gained 3.48 percent to R443.20, Barclays Africa Group was up 3.2 percent at R176 and Capitec Bank advanced 3.09 percent to R872.13.
Crisis-hit retailer Steinhoff was an outlier, closing down 11.3 percent to R1.96 after falling as much as 17 percent, when former board member and shareholder Christo Wiese said he was launching a $5 billion (about R62bn) lawsuit against the company.