RISE IN RISK APPETITE HELPS RAND TO END WEEK ON HIGH

THE RAND ended last week on an 11-week high after breaking below R17 to the dollar on an increase in investors’ risk appetite. The rand closed on Friday at R16.86 to the dollar, R21.46 to the pound, and R19.07 to the euro, much stronger than on Wednesday, when it dipped below R17 for the first time since March 18. Old Mutual investment strategist Izak Odendaal said the rand’s gains had more to do with global factors than any domestic reasons. Odendaal said the global outlook was a bit more positive now compared to April and May. “The rand’s strength is mostly just a shift in global risk appetite, as is normally the case. We have seen global markets rallying quite a bit on the weakness in the dollar,” Odendaal said. The rand has appreciated by more than R2 to the dollar since it breached the R19 level twice in April after the country’s credit rating was downgraded to subinvestment grade and the economy entered a recession. Investec’s Kamilla Kaplan said the easing of the lockdown was positive for the markets. “The largescale monetary and fiscal programmes from the major global central banks and government, as well as expectations of improved economic conditions as economies open from lockdowns, have supported risk appetite and aided portfolio flows to emerging markets so far in June,” she said. “This has supported the strengthening of the rand to an average of R17.08 a dollar in June… from an average of R18.15 in May.” |

MTN FACES new allegations of aiding militant groups in Afghanistan, including paying protection money, in an amended lawsuit filed on behalf of hundreds of families of US soldiers. The original lawsuit was aimed at least at eight multinational companies – including MTN, security firm G4S, US infrastructure group Louis Berger and consultancy Janus Global – that operated in Afghanistan and Iran between 2009 and 2017. The suit, filed in December 2019 in the US District Court in the District of Columbia, alleges the companies violated the US Anti-Terrorism Act by paying protection money to al-Qaeda and the Taliban. The new, amended complaint, filed on Friday by Washington-based law firms, alleges MTN’s “conduct targeted the US” by executing a strategy reliant on dominating markets in unstable countries not allied with Washington. It alleges MTN violated the Anti-Terrorism Act by paying protection money of more than $100 million (R1.68 billion) to al-Qaeda and the Taliban so that its cellular towers would not be targeted for destruction. MTN deactivated those towers at night, preventing US intelligence operations, according to the suit. MTN, Africa’s largest mobile operator by subscribers, has denied the allegations. In April, it asked the court to dismiss the original suit because the court lacked jurisdiction over MTN. | Reuters