JSE strength­ens as rand firms on new lead­er­ship


• The all share ex­pe­ri­ences its big­gest in­tra­day rally in more than three years and the rand strength­ens to a day’s best of R11.59 to the dol­lar

A surge in the JSE saw lo­cal banks ben­e­fit most on Thurs­day 15 Fe­bru­ary, cour­tesy of the swear­ing-in of Cyril Ramaphosa as pres­i­dent.

The all share ex­pe­ri­enced its big­gest in­tra­day rally in more than three years in what verged on eu­phoric trade at times. The rand strength­ened to a day’s best of R11.59 to the dol­lar, a level last seen in Fe­bru­ary 2015.

Af­ter ris­ing more than 4% at one stage, the all share closed 3.72% higher at 59,533.10 points, the big­gest one-day gain since De­cem­ber 2014, in the first day of trade af­ter the res­ig­na­tion of Ja­cob Zuma.

The bank­ing in­dex rose 5.78% and gen­eral re­tail­ers 4.17%. Lo­cal banks were the main gain­ers, as an in­flow of for­eign money boosted the sec­tor. Shares in all the four big banks reached record highs dur­ing the day. Over­all gains were broadly-based, with rand hedges and min­ers also ris­ing de­spite the rand’s good gains. The cur­rency is now up about 6% to the dol­lar so far in 2018.

Fi­nan­cials and plat­inum stocks rose more than 3%. An­a­lysts de­scribed the re­newed in­ter­est as un­prece­dented. "Zuma’s res­ig­na­tion ended the per­sis­tent po­lit­i­cal risk ele­ment that has clouded SA for a long time," said FXTM an­a­lyst Jameel Ah­mad said.

The in­ter­na­tional news me­dia’s re­ac­tion to Zuma’s de­ci­sion to step down saw the coun­try draw huge lev­els of ex­po­sure, global me­dia mon­i­tor­ing firm Melt­wa­ter said.

Ac­cord­ing to data, in the 24 hours be­fore Ramaphosa’s elec­tion as pres­i­dent, more than 20,000 ar­ti­cles cover­ing Zuma’s exit were pub­lished across the world. The US saw close to triple the num­ber of news sto­ries pub­lished than in SA, a third of which fore­cast the ap­point­ment of Ramaphosa as SA’s new pres­i­dent. "This may have con­trib­uted to­wards the strength in the rand," said Melt­wa­ter an­a­lyst Matthew Bar­clay.

Ramaphosa’s elec­tion was the main news among top me­dia out­lets, in­clud­ing the BBC, The Guardian and the Fi­nan­cial Times.

The rand close Fri­days trad­ing at R11.61/$. Bond yields fell to their best lev­els so far in 2018, with the R186 bid at 8.255%, from mainly off­shore buy­ing.

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