RAND, BOURSE SCORE GAINS

Pretoria News - - BUSINESS REPORT -

THE RAND firmed a touch on Fri­day ahead of a de­ci­sion by S&P Global Rat­ings which could change the out­look on the coun­try’s sub-in­vest­ment grade rat­ing to neg­a­tive.

At 5pm, the rand bid at R14.6718 to the dol­lar, 1 cent stronger than at the ame time on Thurs­day, hav­ing ral­lied in the pre­vi­ous ses­sion when the cen­tral bank, cit­ing growth risks, kept lend­ing rates un­changed.

South Africa is ranked sub-in­vest­ment grade by S&P and Fitch, two of the three main rat­ings firms, and nar­rowly dodged a down­grade to junk by Moody’s ear­lier this month when the firm opted to only lower its out­look to neg­a­tive.

S&P said last month at a con­fer­ence there was no im­me­di­ate pres­sure to change the coun­try’s “BB” sov­er­eign rat­ing.

“We ex­pect the agency will de­liver a neg­a­tive out­look on (South Africa’s) lo­cal cur­rency rat­ing, and quite pos­si­bly on its...for­eign cur­rency rat­ing too,” said Annabel Bishop, chief econ­o­mist at In­vestec.

Bishop and other an­a­lysts be­lieve S&P will wait un­til Fe­bru­ary’s bud­get be­fore chang­ing the ac­tual rat­ing, with the rand gain­ing in the mean­time from rel­a­tively strong de­mand af­ter Thurs­day’s cen­tral bank de­ci­sion sup­ported the carry trade.

The yield on the bench­mark gov­ern­ment bond due in 2026 rose 5.5 ba­sis points to 8.385 per­cent.

Stocks rose slightly along­side emerg­ing mar­ket equities as the lat­est com­ments from China about find­ing a res­o­lu­tion to its tar­iff dis­pute with the US lifted hopes that the two sides would reach a trade agree­ment soon.

The bench­mark JSE Top40 in­dex was up 0.5 per­cent to 50 484.88 points while the broader all share in­dex rose by 0.39 per­cent to 56 759.62 points.

“I don’t think any­one ac­tu­ally knows what’s go­ing on with these dis­cus­sions on trade wars,” said Ni­lan Mo­rar, trader at GT247.

“We’re mov­ing from the po­ten­tial to re­lax­ing tar­iffs one day to in­creas­ing tar­iffs, to no change.”

Re­sources led the bourse higher, with en­ergy com­pa­nies Exxaro and BHP Group up 2.74 per­cent and 2.24 per­cent, re­spec­tively.

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