STOCKS AND MARKETS

THE RAND firmed in afternoon trade yesterday, as a rebasing of gross domestic product by the statistics agency showed the economy was 11 percent bigger in 2020 than in the previous estimate.

At 5pm, the rand traded at R14.96 against the dollar, roughly 0.3 percent firmer than its previous close.

StatsSA estimated the size of the economy at R5.52 trillion in 2020, up from R4.97 trillion previously.

Despite the increase, the size of South Africa’s economy still lags behind that of Nigeria, according to the West African nation’s National Bureau of Statistics.

“Nevertheless, this development has injected rand bulls with renewed confidence, pulling the USDZAR back below 15.00. Should the rand continue to strengthen, this may send the currency pair towards 14.80,” FXTM senior research analyst Lukman Otunuga said in a note.

The currency has this week also been supported by improved risk-taking in global markets, since the US Food and Drug Administration granted full approval to the Covid-19 vaccine developed by Pfizer and BioNTech.

Investors focus was also on the US Federal Reserve’s Jackson Hole symposium this week for cues on the timeline of monetary tapering.

Government bonds also firmed, with the yield on the 2030 instrument down 1.5 basis points to 8.845 percent.

Stocks stayed largely muted on the JSE, once again mirroring global stock markets, as investors stayed cautious ahead of the Fed’s meeting.

Almost 80 percent of the stocks on JSE have global links, especially the US, and hence worries around a spike in coronavirus cases led by the Delta variant and a potential US rate hike have kept local investors on the edge, fund managers have said.

The all share index was flat at 67452.86 points, while the blue-chip Top40 index inched up 0.05 percent at 61 212.12 points.