Rand recovers, emerging market shares up

EMERGING market shares saw their biggest rise in almost three weeks yesterday as a fresh high for world stocks and a pause in the dollar’s upward march helped halt a recent sell-off in the top performing asset class.

The main gains came in Russia, where firming oil prices lifted the rouble off a two-month low, in Turkey, where the lira also rebounded, and in Poland as its stock market climbed for a fourth straight session.

Central Europe’s Czech crown was also hovering near a 4-year high against the euro, maintaining its position as 2017’s top global FX performer, ahead of what is expected to be a second interest rate hike of the year on Thursday.

It wasn’t all one-way traffic, however. South Africa’s rand was back in reverse, having hit an 11-month low last week following jarring “mid-term” budget forecasts, which fanned fears about its remaining investment grade credit ratings.

Local data due this week include September trade figures and third-quarter unemployment numbers.

Yields on Chinese 10-year treasury bonds also rose to their highest level since October 2014, amid signs of a further clampdown by Beijing on riskier types of lending.

Shanghai stocks posted their biggest one-day slide in 11 weeks too, as expectations of a new wave of initial public offerings (IPOs) also weighed on traders’ sentiment. China’s securities regulator had approved nine IPOs on Friday that would raise a total of 9.5 billion yuan (R20.14bn), more than double the average funds raised in the past weeks.

A weaker dollar had helped most of the rest of Asia’s developing markets.

Thailand’s baht rode its biggest rise in almost three weeks and South Korea’s won was up 0.6 percent at its highest since September 1.

Taiwan shares were lifted by a gain of more than 1 percent in its semiconductor index. Apple said last week that pre-orders for iPhone X were “off the charts”.

Back in Africa, Kenya’s 2024 sovereign dollar bond was trading up 0.18 cents, at its highest since mid-September according to early morning Tradeweb prices.

Opposition leader Raila Odinga had called for calm on Sunday as he visited Nairobi. – Reuters