Rand touches 2-week highs, JSE gains
THE RAND reached its firmest level in two weeks yesterday as the suspension of new mining laws and weak data from the US pushed the currency past crucial technical levels and lured back investors hungry for high yields.
At 5pm, the rand was bid at R12.9238 to the dollar, 10.77c stronger than at the same time on Friday, softer than the session-best R12.89.
“The disappointing US inflation numbers and the mothballing of the mining charter, that momentum is still coming through today,” said currency dealer at Treasury, One Andre Botha.
On Friday, South Africa said it had suspended the implementation of new mining laws, which included raising the level of shares black people should own in mining firms, pending a court ruling on a challenge lodged by the Chamber of Mines.
The announcement of the laws in mid-June saw the rand slide 2 percent and mining shares plunge, and prompted a warning from ratings agency Moody’s that the new rules would deter investment, raise costs and diminish cashflow generation.
Meanwhile, stocks ticked up, led by buying coming back into Lonmin after it cut costs and boosted third quarter mining performance.
The benchmark JSE Top40 index ticked up 0.4 percent to 47 99.60 points, while the all share index gained 0.43 percent to 53 827.41 points.
Lonmin’s share price rose to its highest level in more than a month after buying came into the previously oversold platinum miner when it cut more costs and improved its mining performance in its third quarter.
Lonmin advanced 14.82 percent to close at R12.86.