Rand, bonds firmer as Ramaphosa wins

THE RAND rose yesterday and government bonds firmed as Deputy President Cyril Ramaphosa won the race to become the next leader of the ANC.

In stocks, the broader all share index lifted as the market priced in a win for Ramaphosa, lifting banking shares and weighing on rand hedge stocks.

Ramaphosa, who is favoured by markets emerged victorious against former chair of the Commission of the AU Nkosazana Dlamini Zuma – President Jacob Zuma’s preferred candidate and his ex-wife – as new party leader.

At 5pm, the rand bid R12.8275 to the dollar, about 1.9 percent firmer than its Friday close, after earlier racing to a three-and-a-half month high of R12.73 earlier. It was expected to strengthen further last night.

“The rand is considerably stronger than where it was last week,” said IG Markets currency strategist, Shaun Murison. “I think a Cyril Ramaphosa win is priced in.”

In fixed income, the yield for the benchmark government bond due in 2026 was down 22 basis points at 8.855 percent, reflecting firmer bond prices.

On the bourse, the benchmark JSE Top40 index ticked up 0.14 percent to 51 026.84 points, while the all share index lifted 0.51 percent to 57 707.42 points.

The banking sector rose 5.21 percent as the market priced in a Ramaphosa win, with Standard Bank up 4.38 percent to R185, FirstRand 6.93 percent higher at R59.89 and Barclays Africa Group up 5.97 percent to R171.50.

“Financials, industrials in general are the winners today (yesterday) ... it seems to be that the market is pricing in a market-friendly candidate,” said Independent Securities trader, Ryan Woods.

Further gains were curbed by rand-hedged stocks, which make the bulk of their revenue outside South Africa and tend to weaken as the currency strengthens.

Mediclinic retreated 4.23 percent to R102.87, Naspers lowered 2.11 percent to R3 240 and Richemont weakened 2.38 percent to close at R116.32.

Meanwhile, the major US stock indices hit record highs in a broad rally yesterday as the long-awaited bill to lower taxes looked set to be passed into law and buoyed by about $11 billion (about R143.6bn) in corporate dealmaking.