RAND FIRMER, STOCKS WEAKER

THE RAND firmed yesterday as a rally in the dollar stalled following a surprise hawkish shift from the US Federal Reserve (Fed) last week.

The rand lost more than 4 percent against the dollar last week as the Fed brought forward its projections for interest rate increases, prompting a sell-off in emerging market currencies.

At 5pm, the rand traded at R14.24 against the dollar, 0.89 percent firmer than its previous close as the dollar retreated from two-month highs.

“Markets likely overreacted somewhat to the FOMC (Federal Open Market Committee) members dot plot elevation last week, and it is quite possible the rand, and other EM currencies see some further strength in (third quarter) 2021, as the US certainly is not about to hike interest rates, or taper QE, yet,” Annabel Bishop, chief economist at Investec, said in a note.

In the equities market, stocks fell as investors of market heavy-weight Naspers trimmed their positions after a rally in morning trade.

The broader JSE all share index ended the day 0.11 percent weaker at 65 563.48 points while the Top40 index fell 0.05 percent.

Consumer internet company Naspers hit a session high of R3 088 in early trade after posting strong fullyear results, but closed 0.33 percent weaker at R3 040.

“In the afternoon it (Naspers) had a bit of some profit taking. The share has been weak for a long time so I think folks wanting to get out are selling on the bounces,” BP Bernstein portfolio manager Gerhard Parkiin said.

Naspers’ European tech company Prosus, however, held on to its gains, with the JSE-listed shares advancing 1.22 percent to R1429.75.

Government bonds weakened, with the yield on the 2030 bond up 12.5 basis point to 9.085 percent. I Reuters