Rand, stocks firmer on vote de­ci­sion

The Star Early Edition - - PRICES -

SOUTH Africa’s as­sets gained yes­ter­day with the rand surg­ing as much as 1.7 per­cent in part be­cause a par­lia­men­tary speaker al­lowed a se­cret bal­lot in to­day’s vote of no-con­fi­dence against Pres­i­dent Ja­cob Zuma.

The prospect of a se­cret bal­lot raises the chances of the de­par­ture of Zuma, which traders see as a net pos­i­tive for the rand.

At 5.02pm, the rand firmed 1.17 per­cent to R13.2613 to the dol­lar, giv­ing up some of the gains af­ter strength­en­ing to R13.1825 shortly af­ter Na­tional As­sem­bly speaker Baleka Mbete an­nounced the de­ci­sion.

The de­ci­sion could em­bolden mem­bers of the ANC to vote against Zuma and puts him in a pre­car­i­ous po­si­tion as he strug­gles to fend off op­po­si­tion ac­cu­sa­tions of cor­rup­tion and mis­man­ag­ing the econ­omy.

“I still think the vote will fail, there is maybe a 30 per­cent chance of suc­cess, but it won’t be truly se­cret and there will be in­tense pres­sure on MPs. Ul­ti­mately a se­cret bal­lot wouldn’t have been of­fered un­less Zuma was con­fi­dent of win­ing,” said No­mura emerg­ing mar­kets economist, Peter At­tard Mon­talto.

On the bourse, bank­ing stocks rose, ex­tend­ing gains af­ter news that crit­ics hoped would pave way to oust Zuma – who is widely blamed for the coun­try’s loss of highly prized in­vest­ment grade sov­er­eign credit rat­ing.

The bank­ing in­dex rose 1.1 per­cent, out­pac­ing a 0.52 per­cent gain to 49 763.82 in the blue chip JSE Top40 in­dex, with Bar­clays Africa

Group up 1.82 per­cent at R149.17 and com­peti­tor Ned­bank ris­ing 1.69 per­cent to close at R229.71.

The broader all share in­dex gained 0.39 per­cent to end the ses­sion at 56 163.6 points.

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