RAND AND BOURSE FIRMER

THE RAND rallied in afternoon trade yesterday as the European Central Bank’s (ECB)’s new stimulus measures and mutual concessions by the US and China in their trade dispute buoyed risk appetite, while stocks also gained.

At 5pm, the rand bid at R14.6057 to the dollar, 13 cents firmer than at the same time on Wednesday.

“It’s just a bout of risk on. Because the ECB cut their rates, it makes South Africa look like a more valued destination in terms of yield-seeking for other investors. I think the rand will enjoy this,” Andre Botha, senior dealer at TreasuryOne, said.

The ECB cut rates deeper into negative territory and restarted its programme of bond buying, known as quantitative easing, with a formulation that suggests purchases could go on for years.

The ECB news further buoyed riskier bets, already boosted by signs of easing in the US-China trade war.

Bonds firmed, with the yield on the benchmark instrument due in 2026 falling 5.5 basis points to 8.105 percent.

In equities, stocks jumped to a more than one-month high, with the JSE all share index was up 0.96 percent to 56 781.94 points, and the blue-chip Top40 index was 0.81 percent firmer to 50 768.84 points.

Leading stocks was drugmaker Aspen Pharmacare, which gained 10.97 percent to R94.25 after it lowered its fullyear debt, which had concerned investors as levels moved close to breaching debt covenants.

Resources also gained with the platinum index up 5.76 percent. I Reuters