Rand inches higher, Brait caps JSE gains
THE RAND inched higher yesterday, adding to the previous session’s gains, with political and economic uncertainty in Britain and the US encouraging investors to search for higher yields elsewhere.
At 5.28pm, the rand traded 0.35 percent firmer at R12.7750 to the dollar compared to its close of R12.82 overnight in New York.
“Despite a backdrop of decline and downgrades from all of the ratings agencies, the rand continues to trade resiliently, technically the current levels would suggest the potential for a move toward the (R)12.5000 level, although local fundamentals do not appear to support that scenario,” Nedbank analysts wrote in a note.
The rand has gained around 1.5 percent since Moody’s downgraded the country’s credit by one notch on Friday with a negative outlook, which still left it as the only major agency to rate South Africa as investment grade.
Globally, traders eyed the start of a two-day US Federal Reserve meeting. In Britain, investors were still cautious after the shock outcome of last week’s election.
Government bonds weakened, with the yield for the benchmark instrument due in 2026 rising.
Meanwhile, stocks trod water as falls in gold shares and Brait curbed further gains.
The benchmark JSE Top40 index rose 0.21 percent to 45 264.87 points, while the broader all share index ticked up 0.12 percent at 51 625.07 points.
The biggest faller on the bourse, Brait, reported a 43 percent fall in full-year net asset value weighed down by unfavourable currency movements and a weak showing at New Look, its British no-frills clothing chain.
Brait yesterday closed 4.55 percent lower at R62.51.