Rand gains, Naspers leads bourse higher
THE RAND firmed nearly 1 percent yesterday in a broad emerging market relief rally driven by the Turkish lira, while stocks were led higher by bourse-heavyweight Naspers.
At 5pm, the rand bid at R12.4636 to the dollar, 12.54 cents stronger than at the same time on Tuesday, compared to a close of R12.57 overnight in New York. In the previous session the rand lost more than 2 percent after the dollar gained support from rising US bond yields.
“Emerging markets have bounced back quite aggressively,” said Rand Merchant Bank currency trader, Jan Sluis-Cremer.
“There are no real tangible factors driving the rand. It’s all just majority of emerging markets on a bit of a pull back.”
Sluis-Cremer said the main support came from Turkey where the central bank said it would take action against a sell-off in the lira.
The rand was also helped by better-than-expected retail sales data for March, which climbed 4.8 percent year-on-year.
Some traders said the rand would struggle to hold onto the gains.
“Sentiment can change at any second, so trade is going to continue to be very volatile,” said currency trader at Treasury-One, Andre Botha, adding that the currency would probably trade in a R12.30-R12.60 range for the next week or so.
Bonds were also firmer, with the yield on the benchmark paper due in 2026 down 2.5 basis points to 8.465 percent.
On the equities market, the all share index closed 1.26 percent firmer to 58 621.77 points, while the blue chip Top40 index gained 1.51 percent to 52 108.1 points.
Internet and entertainment group, Naspers, rose 5.16 percent to R3 260 after Chinese gaming giant Tencent Holdings, in which Naspers owns a 31 percent holding, clocked a better-than-expected jump in quarterly net profit.
Mining firm Tharisa climbed 1.27 percent to R20 after saying it has bought a 90 percent stake in Salene Chrome Zimbabwe Limited, gaining access to rich chrome deposits and growing its presence in Zimbabwe.
Meanwhile, Wall Street edged higher in afternoon trade as Macy’s strong results helped drive gains in retails stocks and more than offset losses in energy shares.