Rand within range, stocks recover

THE RAND stayed within a tight range yesterday trading between R13.19 and R13.29 to the dollar, with focus on the South African Reserve Bank’s monetary policy committee (MPC) meeting this week.

The MPC is widely expected to keep interest rates stable amid currency and fuel price risks.

Maura Feddersen, economist at PwC Strategy, said global trade tensions and developed market monetary policy tightening had contributed to the outflow of capital from emerging markets, including South Africa.

“On a trade-weighted basis, the rand depreciated by 4.6 percent, while also weakening 6.9 percent against the US dollar since the last MPC meeting,” said Feddersen.

At 5pm, the domestic currency was largely unchanged against the dollar with a bid of R13.23. Against the pound, the rand was 10c stronger at R17.41 and to the euro it firmed 4c to R15.46.

TreasuryOne senior currency dealer Andre Botha said the encouraging thing was that the rand tested lower and reached a level of R13.165 on Monday, “which is not a million miles away from the June 14 low of R13.1”. He said this suggested that the downward momentum had not stalled.

“We feel the rand could be very sticky on the way down. On a positive note, we have seen bond inflows for the past couple of days which always gives the rand a shot in the arm. A break below R13.16 or above R13.35 will indicate a change in momentum in the rand,” said Botha.

Meanwhile, JSE stocks recouped some of Monday’s losses with the blue chip Top40 index up 1.33 percent to 49 995.66 points, while the broader all share index ticked up 1.21 percent to 56 113.06 points.

Top gainers included Imperial Holdings, which grew 4.73 percent to R207.13, followed by the JSE, which added 4.48 percent to R169.

Kumba Iron Ore rose 3.92 percent to R304.48, African Rainbow Minerals ticked up 3.58 percent to R113.42 and MTN was up 3.29 percent to close at R107.80.

The biggest losers were Globe Trade Centre, which dropped 5.56 percent to R34, followed by Pioneer Foods, down 3.55 percent to R108.99.

Italtile declined 2.61 percent to R12.67, Astral Foods fell 2.32 percent to R307.93 and British American Tobacco gave up 1.76 percent to end the day at R665.