Rand likely to retain its gains for rest of month
SOUTH African stocks closed in the green on Monday, buoyed by broadbased gains in banks and food retailers on the resumption of the Covid-19 vaccination programme.
The FTSE/JSE All Share Index rose 0.41 percent to 67 573 points, remaining high throughout the day after the government set the date to lift the ban on vaccinations.
The Sisonke implementation study was suspended earlier this month after some patients in the US developed a unique blood clot, but recent studies have shown this condition is a one-ina-million occurrence.
Health Minister Dr Zweli Mkhize said South Africa would resume use of the Johnson & Johnson Covid-19 vaccine today, following recommendations from the Cabinet and the health products regulator.
Mkhize said the number of vaccination sites would be expanded to 95.
Phase 1 of the roll-out is now scheduled to end on May 16, with the vaccination of about 1.2 million healthcare workers.
Investors have been betting on South African stocks following the rise of commodity prices and optimistic economic growth forecasts, despite an increase in Covid-19 cases in other emerging-market countries.
Old Mutual Wealth investment strategist Izak Odendaal said the world was experiencing a phase of rapid economic expansion.
Odendaal said this was particularly as the vaccine-aided reopening of economies was supported by substantial fiscal and monetary support.
“If the 6 percent global growth forecast of the International Monetary Fund is realised, it will be the best year in decades. However, there is also strong underlying momentum that should carry over into next year.”
Meanwhile, the rand remained steady at R14.27 to the dollar, as the dollar continued to underperform after an exceptional performance at the beginning of the year.
The rand has made solid gains in April, outperforming its emerging-market peers, with gains of about 3 percent against the dollar in the year to date against as higher commodity prices cushion demand for the currency against rising US Treasury yields.
Investec chief economist Annabel Bishop said the rand continued to maintain its gains, benefiting highly from being a commodity currency.
Bishop said the rand’s gains were assisted by the weakness of the dollar, the global recovery and ongoing vaccine roll-outs internationally.
She said the rand was likely to retain its gains for the rest of this month because of the support from commodity prices.
“The rand continues to benefit from the strong positive market sentiment created by improved domestic and international trade conditions in countries,” Bishop said.
“Given the rand’s strength over April, South Africa’s exports likely continued to see a strong performance, particularly those of metals.”